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TMI Blog2019 (8) TMI 667X X X X Extracts X X X X X X X X Extracts X X X X ..... ey provide for self-assessment; assessment of tax after examination of record and; assessment of tax of turnover escaped from assessment year appear. Section 28 of the Act provides for a full-fledged or regular assessment to be made. However, it departs from its predecessor enactment i.e. U.P. Trade Tax Act, 1948. The Act contemplates a regular assessment upon examination of records be made only in certain cases specified in sub-section (1) of Section 28 of the Act - Thus, though section 26 of the Act requires an assessment to be made in each case, as to tax payable and I.T.C. entitlement available, besides the legal fiction under section 27 of the Act the same may also arise as a consequence of an assessment after examination of records or upon reassessment order made under section 29 of the Act i.e. as a result of conscious application of mind by the assessing authority to the books of account, return of annual turnover, prescribed statements and replies etc. that may collectively form the record of the assessment case. In a case where the assessee files its revised return in response to a notice issued under Rule 45(13)(a) of the Rules, and the assessing officer feels sati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erits of assessment order, yet, this Court in exercise of its revision jurisdiction is constrained to answer the question in the affirmative i.e. against the assessee and in favour of the revenue in view of the fact that the assessee never raised such challenge on merits, before the appellate authorities. Revision dismissed. - Sales/Trade Tax Revision No. - 255 of 2018 - - - Dated:- 2-8-2019 - Saumitra Dayal Singh, J. For the Revisionist : Suyash Agarwal,Sri Rakesh Ranjan Agarwal For the Opposite Party : C.S.C. ORDER SAUMITRA DAYAL SINGH, J. 1. The present revision has been filed by the assessee against the order dated 14.08.2018 passed by the Commercial Tax Tribunal, Meerut in Second Appeal No.141 of 2018 for A.Y. 2014- 15 arising from an assessment made under Section 28(2)(ii) of the U.P. Value Added Tax Act, 2008 (hereinafter referred to as the Act). By that order, the Tribunal rejected the second appeal filed by the assessee and affirmed the first appellate order and the assessment order whereby the assessee was subjected to assessment to tax on a total turnover of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an ex parte assessment order was passed against him on 31 March, 2018. In the first appeal filed by the assessee therefrom, the assessee appears to have only raised the issue of lack of jurisdiction with the Assessing Authority to pass an assessment under Section 28 of the Act. That objection was rejected. In the further appeal to the Tribunal, again, the assessee appears to have raised solitary issue of lack of jurisdiction of the Assessing Authority. It was again rejected by the Tribunal, by the impugned order. 4. According to the Tribunal, the assessee's assessment proceedings had been taken up under the self assessment procedure prior to 31 March 2017, inasmuch as, undisputedly, the Assessing Authority had issued the notice under Rule 45(13)(a) of the Rules on 19 March, 2017. Then, the fact that the Assessing Authority did not allow for 15 days time to the assessee to file a revised return before the date 31.03.2017 was merely a technical defect, in view of the fact that despite sufficient time of 11 days granted or being available to the assessee, it did not make use of the same and did not file its revised return, before 31 March, 2017. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee mandatory minimum 15 days time to file its revised return. The notice was invalid. Consequently, a deemed order of assessment came into existence on 13 March, 2017. Also, for that reason, the Assessing Officer could not have assessed the assessee under Section 28 of the Act. 9. As to the prescription of time under Rule 45(13)(a) of the Rules, it has been submitted the legislature has not provided or permitted for curtailment or alteration of that period. A fixed period of limitation to do an Act having been prescribed, it was not for the Assessing Officer to curtail the same or to change the same. Reliance has been placed on the Division Bench decision of this Court in M/s. Sheo Prasad Vinod Kumar, Jhansi Vs Union of Inda Others, 2001 U.P.T.C.-329 ; decision of the Supreme Court in Commissioner of Customs And Central Excise Vs. Hongo India (P) Ltd. And Another, (2009) 315 ITR 449 (SC); a full Bench decision of this Court in the case of Commissioner of Income-tax, Kanpur Vs. Mohd. Farooq, (2009) 317 ITR 305 and; another decision of the Supreme Court in the case of Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 29(3) of the Act, it has been submitted, the period of limitation prescribed for the Assessing Authority to pass an assessment is three years from the end of the relevant assessment year. However, for the legal fiction of deemed assessment to come into play, a shorter period of two years is prescribed. It is therefore his submission, irrespective of the fate of the proceedings under Section 27 of the Act i.e. whether those were valid or not, the Assessing Authority would retain to itself full jurisdiction to make an assessment under Section 28 of the Act. 14. In the above regard, he has also referred to Rule 45(13) (a) of the Rules to submit, under that provision of law, the Assessing Officer has a very limited jurisdiction to examine the annual returns to see whether such return is incomplete or incorrect or contains wrong particulars or whether net tax had not been paid in accordance with law. Contrasting those provisions with Section 28 of the Act, it has been submitted, the power to make a regular assessment, is not limited or governed or controlled by Section 27 of the Act. In fact Rule 45(13)(c) only specifies a contingency when a regular assessment may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticulars or do not accompany declaration or certificate for exemption or reduction in the rate of tax, or (ii) dealer by whom tax return for one or more tax periods of the assessment year have not been submitted; or (iii) dealer in whose case assessing authority has passed provisional assessment order under section 25 in respect of one or more tax periods to the best of its judgment; or (iv) dealer in whose case, on the basis of material available on records, if the assessing authority is satisfied that the turnover of sales or purchases or both, as the case may be, and amount of tax shown payable as disclosed by the dealer in Annexures of Consolidated Details are not worthy of credence or tax shown payable in these Annexures has not been deposited by the dealer, or the amount of input tax credit claimed is wrong or the amount of tax payable shown is incorrect; or (v) dealer who has prevented or obstructed an officer empowered to make audit, survey, inspection, search or seizure under the provisions of this Act; or [(vi) ...............] omitted Provided that where the aggregate turnover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrectness of the turnover of sale or purchase or both, as the case may be, amount of tax, amount of input tax credit or amount of reverse input tax credit. (5) Order of assessment shall be in writing and copy of assessment order along with prescribed notice of demand of the balance amount of tax, if any, to be deposited by the dealer, shall be served on the dealer. (6) Dealer shall deposit amount of tax assessed in excess of amount of tax deposited by him for the assessment year, within a period of thirty days after the date of service of the assessment order and notice of demand. (7) Where the amount of tax deposited by the dealer is found in excess of tax assessed, the same shall be refunded to the dealer according to the provisions of this Act. (8) Assessing authority shall not be precluded from making assessment order under this section on the ground of passing of any provisional assessment order in respect of any tax period under section 25 and such provisional assessment order, if any, shall stand merged in the assessment order passed under this section. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 2(ak) of the Act, as a period for which a dealer is liable to submit tax return under Section 24 of the Act. Section 26 of the Act provides, every taxable dealer, for each assessment year shall be assessed to tax payable by him and to amount of Input Tax Credit (I.T.C.) admissible to him. Thus, it fixes the scope and purpose of an assessment to be made. It is in the above statutory context, provisions of Sections 27, 28 and 29 of the Act appear and they provide for self-assessment; assessment of tax after examination of record and; assessment of tax of turnover escaped from assessment year appear. 18. The scope of Section 27 of the Act has been dealt with by this court in the case of S/s Purwar Trading Co. (supra) , where it has been held as below: 12. Perusal of sub-section 1 of Section 27 of the Act, makes it clear that a deemed assessment arises by operation of law to the amount of tax admittedly payable on the disclosed turnover of sale or purchase or both, as the case may be, disclosed by the assessee. Thus, the Act does not contemplate any order to be passed by the assessing authority but it only contemplates th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etation prohibits any extension beyond the clearly visible legislative field, noted above. Reliance may be placed on that expression of law made by Justice S.R. Das (as his lordship then was), in his dissenting opinion in the Constitution bench decision of the Supreme Court in State of Travancore-Cochin Ors Vs. Shanmugha Vilas Cashewnut Factory, Quilon; AIR 1953 SC 333 (para 38), which principle was reiterated and applied by another Constitution bench of the Supreme Court in Bengal Immunity Co. Vs. State of Bihar; AIR 1953 SC 661 (para 31). Consequently, no assessment order can be assumed or imagined to exist in law, for any other purpose such as rectification of mistake etc. 16. Also, the powers of the assessing authority to pass any assessment order are contained in the later provisions being Sections 28 and 29 of the Act. A regular assessment order may be passed by the assessing officer under Section 28 of the Act. Also, in the event of any escapement of the turnover from assessment, the assessing authority has been given the power to make a re-assessment under Section 29 of the Act. While a regular assessment may be made in the normal per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted or Input Tax Credit (I.T.C.) has been wrongly claimed or tax payable has been incorrectly shown or; the dealer had prevented or obstructed the conduct of audit, survey, inspection, search or seizure under the Act, he may be subjected to assessment upon examination of record. 21. On the other hand, the assessment of tax of turnover escaped from assessment may arise under Section 29 of the Act, if the assessing officer has reason to believe that the whole or any part of the turnover of the dealer has escaped the assessment. Those again are provisions, with which presently we are not concerned. At the same time, Section 29(3) of the Act clearly prescribes the normal period of limitation for making an assessment or reassessment as three years from the end of the assessment year in question. 22. Thus, in view of the first conclusion drawn, there never came into existence any order of deemed assessment. That legal fiction came into existence upon passage of two years time from the end of the relevant assessment year. Therefore, the limitation to pass an assessment order contained in Section 29(3) of the Act is referable only to an or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all proceed to make assessment of tax after examination of record under Section 28 of the Act. It does not and cannot override or restrict the plain applicability of the provisions contained in Section 28(1)(a) and (b) of the Act i.e. the principal legislation. In the first place, it is settled principle that the principal legislation would prevail over the delegated legislation. In Babaji Kondaji Garad v. Nasik Merchants Coop. Bank Ltd., (1984) 2 SCC 50 , (paragraph 15 of the report) it was observed - . .......................... Now if there is any conflict between a statute and the subordinate legislation, it does not require elaborate reasoning to firmly state that the statute prevails over subordinate legislation and the bye-law if not in conformity with the statute in order to give effect to the statutory provision the rule or bye-law has to be ignored. The statutory provision has precedence and must be complied with . Thus, as a principle, the subordinate legislation i.e. the Rules cannot be read so as to override the statute itself. 26. More so, in the present case, in view of the clear stipulations contained in Section 28(1)(b)(i) (iv) of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13)(a) of the Rules, do over lap and in either case regular assessment after examination of records may be passed and further in either case that resort may be had upon a detection being made by the assessing officer that the return filed is incomplete or incorrect or contains wrong particulars, the immediate consequence arising upon such detection would be different, depending upon the time when such defect is noticed and/or acted upon by the assessing authority. 29. If that defect or deficiency is noted by the assessing officer within the period prescribed under Section 27(2)(a) of the Act i.e. before commencement of last 15 days before the legal fiction (of deemed assessment) arises, the assessing officer shall first require the assessee to file a revised return to make necessary rectification. For that purpose, the asssessing authority must provide minimum 15 days time to the assessee to revise his return. In case, he files a revised return to the satisfaction of the assessing officer, the legal fiction of deemed assessment would arise. However, if despite time so granted, the assesee fails to file his revised return, he shall necessarily be visited with a regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. That position is unambiguously clear from the language of Rule 45(13)(c) of the Rules. Thus no deemed assessment may arise in that case. 34. Also, there may arise cases, where no notice may have been issued by the assessing authority to the assessee to file a revised return or such notice, if issued was invalid, as in this case. Such eventualities would give rise to the legal fiction of deemed assessment at the end of the time period contemplated under section 27(2)(b) of the Act. However, it would remain subject to section 28 of the Act for reason of plain statutory intent expressed by use of words subject to used in opening part of section 27 as also for reason of larger period of limitation of three years provided under section 29(3) of the Act, for making an assessment under section 28 of the Act. 35. Therefore, the fate of such deemed assessment, if any, would be governed by proceedings undertaken under section 28 of the Act. In that case, the legal fiction of deemed assessment, would not operate as an embargo or restraint on the power of the assessing authority to proceed to assess the assessee after examination of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat time limit was for the benefit of the assessee. Had it filed the revised return within the reduced time, the same would have been a valid revised return and the ground of invalidity in the notice would have stood waived. However, that was not done. 39. Perusal of the notice dated 27.02.2018 reveals it was a fresh notice issued under section 28 of the Act. At that stage, the assessing officer was not satisfied as to the completeness of the disclosure made by the assessee and in that regard, he had observed that the assessee had not complied with the notice issued under Rule 45(13) of the Rules. Even if that recital is considered to be relevant in view of the notice dated 19.03.2017 being found to be invalid, yet, it would not dilute the observation of the assessing officer or his satisfaction with the assessee's return being incomplete. That observation and that satisfaction reflect independent existence of the conditions mentioned under Section 28(1)(b)(i) and (iv) of the Act. Therefore, the assessment proceedings under Section 28 of the Act were validly initiated. 40. The further submission advanced by learned Senior Couns ..... X X X X Extracts X X X X X X X X Extracts X X X X
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