9911796707
TMI Blog2011 (12) TMI 495X X X X Extracts X X X X X X X X Extracts X X X X ..... the statute for completing assessment of escaped turnover cannot be restricted to one year as provided in case of audit assessment - when the statute requires to do certain thing in certain way, the thing must be done in that way or not at all - other methods or mode of performance are impliedly and necessarily forbidden - the settled legal proposition is based on a legal maxim "expression unius est exclusio alterius", meaning thereby that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner and following other course is not permissible - the assessing authority is not justified in utilizing the fraud report dated May 2, 2011 against the petitioner-dealer while making audit assessment on the basis of audit visit report dated September 30, 2010. Violation of principles of natural justice – Held that:- Giving eight days’ time to explain the allegations raised against the dealer-petitioner in the report dated May 2, 2011 which is in 20 volumes covering more than 4,000 pages cannot be said that reasonable opportunity of being heard has been afforded to the petitioner before passing the impugned order of ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isit report provided if for any reason the assessment is not completed within six months the Commissioner may on the merit of each case allow such further time not exceeding six months for completion of the assessment proceedings. The petitioner believed that the assessment order would be passed by the opposite party No. 3 before April 6, 2011, i.e., within the period of limitation of six months as provided under rule 12(3) of the CST(O) Rules. However, the assessing authority did not pass any assessment order by that date. While the matter stood thus, the petitioner was served with a notice on June 25, 2011, for the first time, informing that the opposite party No. 3 would also be relying on another report dated May 2, 2011 to complete the assessment proceedings. Pursuant to the said letter, the petitioner appeared on July 14, 2011 and sought for copies of the aforementioned report and reiterated its request again on July 22, 2011. Since the copy of the said report dated May 2, 2011 was not supplied to the peti- tioner, it approached this court in W.P.(C) No. 21697 of 2011 which was disposed of on August 29, 2011 (Bhushan Power Steel Ltd. v. Deputy Commissioner of Sales Tax) wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im that is to be brought to his notice for rebuttal. This is the requirement of natural justice. The impugned order of assessment has been passed in gross violation of principles of natural justice as the learned assessing authority supplied the report dated May 2, 2011 on September 14, 2011 in 20 volumes containing 4,000 pages and completed the assessment within eight days, i.e., on September 22, 2011. The impugned assessment order has not been passed on the basis of the audit visit report dated September 30, 2010 but on the basis of the vigilance report dated May 2, 2011 and thus the assessment order is one falling under rule 12(4) of the CST (O) Rules read with section 43 of the OVATAct. In that event, the period of limitation is five years and it is not six months or one year as applicable to audit assessment. The order of assessment passed under rule 12(3) of the CST (O) Rules is ab initio void as the same has not been passed exclusively on the basis of the audit visit report dated May 2, 2011. The assessment order suffers from the vice of arbitrariness inasmuch as the same has been made by generalizing the entire claim of stock transfer on the strength of some transactions in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Orissa, the petitioner had paid local VAT in all States across the country and there is no loss to the Government exchequers in any manner. On the contrary, there is surplus contribution of revenue by the petitioner-company. 5. M. R.P. Kar, learned counsel appearing for the Revenue, supporting the order of the assessment passed by the assessing authority vehemently argued that there is no infirmity or illegality in the impugned assessment order. The assessment having been completed under rule 12(3) of the CST (O) Rules read with section 42 of the OVATAct, the assessing authority has no option but to complete the assessment during the period of limitation provided in rule 12(3) of the CST (O) Rules. The assessing authority has not committed any illegality in utilizing the fraud reports submitted by the vigilance wing in the audit assessment proceedings. With the above submissions, Mr. Kar vehemently urges for dismissal of the writ petition. 6. In the alternative, Mr. Kar makes a prayer that in case the court comes to the conclusion that reasonable opportunity of hearing has not been afforded to the petitioner-company and/or that the assessing authority has no power/auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order by generalizing the entire claim of stock transfer on the strength of findings arrived at on scrutinizing some transactions of stock transfer? 8. Question Nos. (i) to (iii) being interlinked, they are dealt with together. The scheme of the VATAct provides various types of assessment for the purpose of determination of tax liability under the OVATAct. Such assessments are self-assessment (section 39), provisional assessment (section 40), audit assessment (section 42), escaped assessment (section 43), assessment of dealer who being liable to pay tax fails to register (section 44), assessment of casual dealer (section 45). Similarly, in rule 12 of the CST (O) Rules provides various types of assessment including audit assessment and assessment of escaped turnover. In the present case, we are concerned with the audit assessment and assessment of escaped turnover. 9. Section 2(6) of the OVATAct defines audit assessment which means an audit assessment made under section 42. Under the CST (O) Rules, audit assessment is provided in rule 12(3) of the CST (O) Rules. According to rule 12(3)(a), where the tax audit conducted under rule 10 results in detection of suppression of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heme of assessment, audit assessment under rule 12(3) of the CST (O) Rules read with section 42 of the OVATAct and escaped assessment under rule 12(4) of the CST (O) Rules read with section 43 of the OVATAct are separate and distinct. So far as assessment of escaped turnover is concerned, it is only where, after a dealer is assessed under sub-rule (1), (2) or (3) of rule 12 for any tax period, the assessing authority, on the basis of any information in his possession is of the opinion that the whole or any part of the turnover of the dealer in respect of any period or periods has escaped assessment or has been under-assessed or has been assessed at a rate lower than the rate at which it is assessable or that the dealer has been allowed wrongly any deduction from his turnover or exemption under the Act or has been wrongly allowed to set off of input tax credit in excess of the amount admissible in clause (c) of the sub-rule (3) of rule 7 of these Rules, he shall serve a notice in form IV(a) on the dealer for the purpose of making assessment on escaped turnover. Sub-rule (e) of rule 12(4) of the CST (O) Rules provides that no order of assessment shall be made under rule 12(4) afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment was completed on September 22, 2011, i.e., within eight days from the date of supply of copy of the report. It is stated by the learned Senior Advocate for the petitioner that the said report comprises of 20 volumes covering more than 4,000 pages. There is no denial by the Revenue to such statement. From the assessment order we also find that one of the reasons given by the assessing authority to complete the assessment hurriedly is that since the extended period of assessment allowed under rule 12(3)(h) of the CST (O) Rules by the C.C. T. (O), Cuttack vide Memo No. 4940 dated March 23, 2011 was going to be expired on September 30, 2011, he did not find any alternative but to complete the assessment ex parte to the best of his judgment. This being the position, it is difficult to accept that reasonable opportunity was afforded to the petitioner to rebut the charges raised against him in the report dated May 2, 2011. Further, this court vide order dated August 29, 2011 passed in W.P.(C) No. 21697 of 2011 (Bhushan Power Steel Ltd. v. Deputy Commissioner of Sales Tax) has categorically observed that the assessing authority shall provide reasonable opportunity of hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be brought to tax only if the movement of vehicles from Jamshedpur had been occasioned under a covenant or incident of that contract the Assistant Commissioner based his order on mere generalities. It has been suggested that all the transactions were of similar nature and the appellant's representative had himself submitted that a specimen transaction alone need be examined. In our judgment this was a wholly wrong procedure to follow and the Assistant Commissioner, on whom the duty lay of assessing the tax in accordance with law, was bound to examine each individual transaction and then decide whether it constituted an inter-State sale exigible to tax under the provisions of the Act. 18. In view of the above legal position and our observations made hereinabove supra, we set aside the impugned order of assessment dated September 22, 2011 passed for the period from July 6, 2006 to March 31, 2009 with a direction to the assessing authority to pass the audit assessment order afresh exclusively on the basis of audit visit report within a period of four weeks from the date of appearance of the petitioner-dealer before him for this purpose which is fixed to December 20, 2011. If ..... X X X X Extracts X X X X X X X X Extracts X X X X
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