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TMI Blog2022 (8) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... omplied with. Hence, the notification under challenge is invalid. A fair understanding in taxation law as (a) audit (b) assessment (c) demand/recovery/collection are three different stages and are dealt by different and competent authorities under the statute. Originally under notification dated 01.04.2006, certain powers have been delegated in favour of Superintendent of Taxes. But in notification dated 04.06.2018, the powers under Section 63 are delegated to all Superintendent of Taxes posted in Tax Audit Cell. This power is enhancing the action of the authority in audit cell also as an authority under assessment and an authority for demand and collection of Taxes including imposition of Interest penalty. It is pertinent to mention that Section 28 has not been delegated. The entire action involving the 5th respondent-authority for issuing the impugned notices imposing the penalty and collecting of interest are the one without jurisdiction. Under Rule 41, the audit authority shall only communicate their finding to the assessing authority. A reading of Section 28 and Rule 45 clearly indicates that role of the audit assessment authorities under the Act are different. The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be exercised within the State of Tripura with effect from 31.03.2018. (iv) Notice No. F(1)/ST/TAX/AUDIT/UDP/2018/2723-24 dated 04.04.2018 issued by the Superintendent of Taxes, Tax Audit Cell, HQ, Gurkhabasti, Agartala in purported exercise of powers under section 31(1) of the Tripura VAT Act, 2004 directing the petitioner to produce or cause to be produced the accounts and documents relating to the turnover of sales and/or purchase for the period from 2013-2014 to 2017-2018 for scrutiny of the returns furnished by the petitioner. (v) Notice No.F(1)/ST/TAX/AUDIT/UDP/2018/2083 dated 22.02.2019 issued by the Superintendent of Taxes, Tax Audit Cell, HQ, Gurkhabasti, Agartala directing the petitioner to submit the segregated accounts of opening stock, closing stock, fright charge, import fee, bid money etc, in respect of imported and domestic goods for assessment years 2013-14 to 2016-17 for assessment. (vi) Notice No.F(1)/ST/TAX/AUDIT/UDP2018/2777 dated 26.02.2019 issued by the Superintendent of Taxes, Tax Audit Cell, HQ, Gurkhabasti, Agartala directing the petitioner to show cause as to why penalty @ Rs.100/- per day should not be imposed for the alleged delay in submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31st March itself. [2] The facts of the case are that the petitioner is carrying on the business of bonded ware house in the name style of M/s Udaipur Bonded Ware House, Udaipur, Gomati, Tripura under a valid license issued by the Competent Authority under the Tripura Excise Act 1987 Rules made under. Petitioner also has a valid registration TIN 16111128003 issued under Tripura VAT Act 2004. The nature of business of the petitioner is to purchase goods from local and also from various parts of India by duly paying taxes as applicable like Sales Tax, Excise Duties etc. [3] The respondent No.3 the Commissioner of Taxes, Government of Tripura has delegated respondent No.4, the Superintendent of Taxes, Agartala the powers including power of assessment under Section 31 of Assam VAT Act 2004 which has been adopted by State of Tripura under Section 85 of Tripura VAT Act vide notification dated 01.04.2006 and later another notification dated 04.06.2018 has also been issued delegating powers on respondent No.5. Both are extracted as under: NO.F.1-1(2)-TAX/92/5125-186 GOVERNMENT OF TIPURA OFFICE OF THE COMMISSIONER OF TAXES KAR BHAWAN: AGARTALA Dated, Agarta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tripura Gazette, 10 (ten) copies of the above Notification may please be sent to the Commissioner of Taxes, Tripura. 2. The Additional Commissioner of Taxes, Agartala for information. 3. The Asstt. Commissioner of Taxes, Agartala for information. 4. The Superintendent of Taxes, Charge-I/II/III/IV/V/VI/VII/VII/VIII/Tax Audit Cell/ Agartala Enforcement Wing/Udaipur Enforcement Wing/Choraibari Enforcement Wing/Udaipur/Belonia/Ambassa/Teliamura/Bishalgarh/Dharmanagar/Kailashar. 5. Statistical Section/General Section/Establishment Section/Guard File. (Nagesh Kumar, B, IAS) Commissioner of Taxes Government of Tripura [4] In pursuance of the powers delegated, the respondents No.5 for assessment year 2013-14 to 2016-17 issued demand notices in terms of the assessment orders dated 30.03.2019. The said orders were challenged by the petitioner by way of WP(C) 560 of 2019. Initially there was an interim order dated 30.03.2019 in favour of the petitioner directing the respondents not to take any coercive steps. Later in view of fresh facts placed by the respondents the said writ petition has been dismissed as withdrawn on 25.06.2019 with liberty to file a fresh wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is this lis is the point of jurisdiction. That the respondent No.3 cannot delegate the powers upon respondent No.5 and the action taken by respondent No.5 is not in consonance with the Act Rules. [7] Hence, this writ petition. [8] The Counter affidavit and written argument have been filed on behalf of the respondents wherein contending that no fundamental right of the petition has been violated, writ is not maintainable as no cause of action is made out, the impugned orders are appealable under Section 69 of the Act before Appellate Authority and a revision under Section 72 before High Court. Further, contended that respondent No.3 is having power under Section 85 to delegate to persons appointed under Section 18(1) of the Act. The audit wing is delinked with tax collection wing as per proviso to Section 28(1). Thus, the orders of imposition of interest, penalty, determining tax demand are as per Law. [9] Heard both sides. [10] Learned senior counsel for the petitioner Mr. A.K. Saraf, filed written argument and apart from other submissions contended mainly on the point of jurisdiction and the delegation of power by respondent No.3 to respondent No.5 is contrary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment by apex court in The Barium Chemicals Limited vs. The Company Law Board, reported in AIR 1967 SC 295 held as under: Delegatus Non Potest Delegare means that a delegate has no power to delegate. The said maxim indicates a rule of construction of a statute or other instrument conferring an authority. Ordinarily, a discretion conferred by a statute on instrument conferring an authority. Ordinarily, a discretion conferred by a statute on any authority in intended to be exercised by that authority, and by no other. But the intention may be negative by any contrary indication in the language, scope or object of the Statute. [14] In Mohd Naved vs. State of Uttarakhand Ors reported in 2020 SCC Online Utt 236 with regard to power of delegation in paragraph 38 held as under: 38. In practice government demands a great deal of delegation. This has to be authorized by statute, either expressly or impliedly. Statutory delegation of powers must be construed in the same way as other powers, and will not therefore extend to sub-delegation in the absence of some express or implied provision to that effect. The delegate, must also keep within the bounds of the power actually delegated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g input tax credit and evasion of tax, if any, relevant for the purpose of investigation, assessment or such other purposes. 16. Thus, under the OVAT Act the officer undertaking the audit has to forward the report to the assessing officer who then, in terms of Section 42 of the OVAT Act, makes an audit assessment. The position under Section 58 of the DVAT Act is very different. [17] Reliance has also been placed on another judgment of the apex court in Kerala Trade Links, Adichira vs. Commercial Tax Officer and Ors (order passed on 05.02.2009) where the apex court has observed that the contention of counsel for the appellant that the Audit officer s main function is to make audit assessment under Section 24 is certainly correct. However, while scrutinizing the accounts or other materials, if he notices that assessment under Section 24 is barred by limitation and if the assessment is otherwise tenable under Section 25, then certainly he is entitled to invoke section 25 and make assessment as an Assessing officer, if he is authorized by Commissioner under Section 2(v) of the Act. Since in this case the first respondent is authorized by the Commissioner to function as an Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of dealer a Superintendent of Taxes referred to in Rule 8 or) any person appointed as such by the State Government under Section 18 and within whose jurisdiction the dealer‟s place of business is situated or if the dealer has more than one such place, the Superintendent within whose jurisdiction the general branch or Head office in Tripura of such business is situated, or if the dealer has no place of business within the State of Tripura, the Superintendent who has been so notified by the Commissioner under Rule. 8. Section 18. (1) The State Government may, for carrying out the purposes of this Act, appoint a Commissioner of Taxes, and such other persons to assist him as it thinks fit. (2) Persons appointed under sub-section (1) shall exercise such powers as may be conferred, and perform such duties as may be required, by or under this Act. (3) The State Government may, instead of appointing any person under sub-section (1), invest, by notification, any officer to exercise any power under this Act and also specify therein the area, in which, power is to be exercised and thereupon such officer or officers shall be deemed to have been appointed under sub-section (1). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted by the Commissioner in the manner as may be prescribed for the purpose. Provided that the audit wing shall be delinked from tax collection wing as may be prescribed. (2) The tax audit shall be generally taken up in the office, business premises or warehouse of the dealer. (3) For the purpose of tax audit under sub-section (1) the Commissioner or any other tax officer directed by him shall examine the correctness of return or returns filed and admissibility of various claims including input tax credit. Section 29. Self assessment :- (1) (2) Not with standing anything contained in this section, if a registered dealer has failed to furnish return or returns under sub-section (1) of section 25 in respect of any tax period or periods, the Commissioner shall proceed to make provisional assessment under section 30. Section 30. Provisional assessment:- (1) Where a registered dealer fails to furnish the return in respect of any tax period within the prescribed time, the Commissioner shall, not withstanding anything contained in section proceed to assess the dealer provisionally for the period of such default. (2) The provisional assessment under sub-section (1) shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business premises of the dealer and it is found that the dealer or his authorized representative is not available or not functioning from such premises, the Commissioner shall assess to the best of his judgement the amount of tax due from him. (4) If the Commissioner, after considering all the evidences produced in course of the proceedings or collected by him, is satisfied that any dealer (a) has not furnished return in respect of any period by the prescribed date; or (b) has furnished incomplete and incorrect return for any period; or (c) has failed to comply with any notice under sub-section (1) or sub-section (3); or (d) has failed to maintain accounts in accordance with the provisions of this Act or has not regularly followed any method of accounting; the Commissioner shall assess to the best of his judgement the amount of tax due from such dealer. (5) If the Commissioner is satisfied that the dealer, in order to evade or avoid payment of tax (a) has failed to furnish without reasonable cause, returns in respect of any period by the prescribed date; or (b) has furnished incomplete and incorrect returns for any period;or (c) has availed himself o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest, if any, required to be paid and the penalty, if any, imposed to be paid under sub-section (5) of section 31 or subsection (2) of section 32. (b) the amount of penalty imposed under any provision of this Act not covered under sub-chause ii) of clause (a); or (c) any other dues under this Act. shall be paid by the dealer into Government Treasury by such date as specified in the demand notice. (5) Where a dealer fails to make payment of the tax assessed or interest levied or penalty imposed on him or any other amount due from him under this Act within thirty days of the date of service of the notice of demand, the Commissioner may, after giving the dealer reasonable opportunity of being heard, direct that such dealer shall, in addition to the amount due pay, by way of penalty, a sum equal to 2% of such amount of tax, penalty, interest or any other amount due, for every month, for the period for which payment has been delayed by him after the date on which such amount was due to be paid. (6) The amount that remains unpaid after the due date of payment in pursuance of the notice issued under sub-section (4) and sub-section (5) shall be recoverable as arrears of land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, and with the approval of Secretary, in-charge of Finance Department in the Government delegate the power to be exercised by any officer not below the rank of Joint Commissioner of Taxes with certain terms, and he may alter or withdraw such power delegated to any such officer(s), as it seems fit, from time to time. Rule 27: Notice of Demand: The notice of demand shall be in Form-XV. Rule 45. Selection of dealers for audit :- (1) The Commissioner shall, under sub-section (I) of Section 28, of the Tripura Value Added Tax Act, 2004 select the dealers for audit. (4) Audit of selected dealers : (i) For the purpose of audit, an audit team may consist of the following persons: (a) Superintendent of Taxes and Inspector of Taxes with the Superintendent of Taxes as its head; (b) Asstt. Commissioner of Taxes, Superintendent of Taxes and Inspector of Taxes with Asstt. Commissioner of Taxes as its head; (c) Deputy Commissioner of Taxes, Asstt. Commissioner of Taxes, Superintendent of Taxes and Inspector of Taxes with Deputy Commissioner of Taxes as its head; Provided that the members of the Audit team shall not be entrusted with the responsibility of collection of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A fair understanding in taxation law as (a) audit (b) assessment (c) demand/recovery/collection are three different stages and are dealt by different and competent authorities under the statute. Originally under notification dated 01.04.2006, certain powers have been delegated in favour of Superintendent of Taxes. But in notification dated 04.06.2018, the powers under Section 63 are delegated to all Superintendent of Taxes posted in Tax Audit Cell. This power is enhancing the action of the authority in audit cell also as an authority under assessment and an authority for demand and collection of Taxes including imposition of Interest penalty. It is pertinent to mention that Section 28 has not been delegated. [22] The entire action involving the 5th respondent-authority for issuing the impugned notices imposing the penalty and collecting of interest are the one without jurisdiction. Under Rule 41, the audit authority shall only communicate their finding to the assessing authority. A reading of Section 28 and Rule 45 clearly indicates that role of the audit assessment authorities under the Act are different. The powers of assessment under the statute are not vested on the aud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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