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TMI Blog2022 (8) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed acceptance of a return filed by way of self assessment if nothing is heard from the Department after it is filed. There has to be an overt act of communication of such acceptance by the Department to the dealer. This Court is of the considered view, therefore, that the decision of the Division Bench of this Court in M/S. NEELACHAL ISPAT NIGAM LTD. VERSUS STATE OF ORISSA AND OTHERS [ 2016 (12) TMI 1203 - ORISSA HIGH COURT ] which holds that if the authorities have not issued any notice under Section 7 (11) of the OET Act, then the self assessment of the dealer under Section 9 (2) of the OET Act should be taken to have been accepted does not set down the correct legal position and to that extent, the said decision is hereby overruled. The sum total of the discussion is that as far as a return filed by way of self assessment under Section 9 (1) read with Section 9 (2) of the OET Act is concerned, unless it is accepted W.P.(C) Nos.7458 of 2015 and 7296 of 2013 Page 30 of 30 by the Department by a formal communication to the dealer, it cannot be said to be an assessment that has been accepted and without such acceptance, it cannot trigger a notice for reassessment und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .(C) No.7458 of 2015 was at one stage adjourned awaiting the decision of the Supreme Court in the aforementioned SLP. Referral order 4. As regards the reference to this Full Bench, it was made by the order dated 31st March 2022 of the Division Bench of this Court in W.P.(C) No.7458 of 2015 (M/s. ECMAS Resins Pvt. Ltd. v. State of Orissa) by the following order: 1. One of the issues involved in the present case is whether the impugned order of reassessment for the period 1st April, 2008 to 31st March, 2014 is valid in view of the non-communication of the acceptance of the original return filed by the assessee by way of self-assessment under Section 9 (2) of the Orissa Entry Tax Act, 1999 (OET Act)? 2. Mr. Sahoo, learned Senior counsel for the Petitioner placed reliance on the decision of this Court in M/s. Keshab Automobiles v. State of Odisha (decision dated 1st December, 2021 in STREV No. 64 of 2016) which holds in the context of Section 43 read with Section 39 of the Odisha Value Added Tax Act, 2004 (OVAT Act) that unless such acceptance of the return filed by way of self-assessment is actually communicated to the assessee, there cannot be a re-opening of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Nilachal Ispat Nigam Ltd. v. State of Odisha) in the context of Section 9 (2) read with Section 10 of the OET Act require reconsideration? In other words, whether a formal communication of the acceptance of the return filed by way of self-assessment under Section 9 (2) of the OET Act is a pre-requisite to the reopening of an assessment under Section 10 (1) of the OET Act? 7. The interim order shall continue till the next date. 5. An identical question arises for consideration in the companion W.P.(C) No.7296 of 2013 (M/s Shyam Metalics Energy Ltd. v. The Commissioner of Commercial Taxes, Odisha) in which the following order was passed on 19th July, 2022: 1. One of the issues raised in the present petition is whether the Assessing Officer could have exercised jurisdiction under Section 10(3) of the OET Act, 1999 when there is no assessment order as such. It is pointed out that in the first instance there was a self assessment by the dealer in terms of Section 9(1) read with 9(2) of the OET Act, 1999 and there was no order as such was passed by the Assessing Officer in respect thereof. 2. It is pointed out that this very issue namely whether there can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. (ERPL) is concerned, the order under challenge is dated 19th February 2015, passed by the Deputy Commissioner of Sales Tax (DCST), Puri Circle, Puri re-opening the assessment for the period 1st April 2008 to 31st March, 2014. 10. The occasion for the issuance of the notice for reopening of the assessment is that ERPL is engaged in sale of products like polyester, resins, glass articles and other polypher and epoxide resins in primary forms. ERPL is stated to have its own manufacturing unit at Hyderabad and its depot at Puri. It is stated that ERPL s depot at Puri obtains stock of products from its manufacturing unit at Hyderabad for sale in Odisha. 11. On the basis of a tax evasion report of the DCST, Vigilance Division, notice in Form E-32 was issued stating that goods purchased/received by the ERPL were chemicals of different variety falling under Entry 73 of Part-I of the Entry Tax Rate Schedule which reads chemicals used for any purpose and therefore, was exigible to entry tax @1% on all the products except glass fiber. The assessment order dated 19th February 2015 was passed raising a demand of Rs.60,19,134/-. 12. Although on merits, it is the contention of ERP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. Self-assessment:- (1) Where a dealer files return for a tax period within the period specified in sub-rule (1) of Rule 10 and the return is found to be correctly and completely filled in, and there is no arithmetical mistake apparent on the face of such return, the said return shall be accepted as self-assessed. (2) Where there is any arithmetical mistake apparent on the face of such return, and such mistake can be reconciled without any reference to the dealer to whom the return relates, such return may accordingly be rectified and the rectification so made may be intimated to the dealer in Form E28 for information. (3) If the rectification as intimated to the dealer under sub-rule (2) is not accepted by the dealer, he may, within seven days from the date of receipt of such intimation, file an application stating therein the correct position along with reasons for occurrence of such mistake to the assessing authority, and if such authority is satisfied, the return referred to in sub-rule (2) shall be accepted as self-assessed. (4) Where the arithmetical mistake apparent on the face of the return furnished for a tax period remains un-reconciled, suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a period of three years from the date of the judgment or order. Rule 15B of the OET Rules: 15B. Audit assessment.- (1) If the tax audit conducted under Section 9B of the Act results in findings, which the assessing authority considers to be affecting the tax liability of a dealer for a tax period or tax periods, such authority shall serve a notice in Form E30 along with a copy of the Audit Visit Report, upon such dealer, directing him to appear in person or through his authorized representative on such date, time and place, as specified in the said notice for compliance of the requirements of sub-rules (2) and (3). (2) The assessing authority may, in the notice referred to in sub-rule (1), require the dealer- (i) to produce the books of accounts maintained under the provisions of the Act and these Rules; (ii) to furnish records and documents required to be maintained under the Act and these Rules claiming deductions or concessions, as may be applicable; (iii) to furnish any other information relating to assessment of tax, levy of interest, imposition of penalty; and (iv) to explain the books of account, other accounts, records, documents o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment.- xxx xxx xxx (2) If a registered dealer furnishes the return in respect of any tax period within the prescribed time and the return so furnished is found to be in order, it shall be accepted as self assessed subject to adjustment of any arithmetical error apparent on the face of the said return. Rule 48 of the OVAT Rules: 48. Self-assessment:- (1) Where a dealer files return for a tax period within the period specified in Rule 34 and the return is found to be correctly and completely filled in, and there is no arithmetical mistake apparent on the face of such return, the said return shall be accepted as self-assessed. (2) Where there is any arithmetical mistake apparent on the face of such return and such mistake can be reconciled without any reference to the dealer to whom the return relates, such return may accordingly be rectified and the rectification so made may be intimated to that dealer in Form VAT- 305 for information. (3) If the rectification as intimated to the dealer under sub-rule (2) is not accepted by the dealer, he may, within seven days from the date of receipt of such intimation, file an application stating therein th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he dealer to pay, by way of penalty, a sum equal to twice the amount of tax additionally assessed under this section. (3) No order of assessment shall be made under subsection (1) after the expiry of seven years from the end of the tax period or tax periods in respect of which the tax is assessable. Rule 50 of the OVAT Rules: 50. Assessment of escaped turnover. (1) Where a dealer has already been assessed under section 39, 40, 42 or 44 and it is required to reopen the assessment under subsection (1) of section 43 for occurrence of any or more of the events specified in that subsection, the assessing authority shall serve a notice in Form VAT -307 upon the dealer. (2) The hearing of the dealer shall be concluded in accordance with the provisions of sub-rules (2), (3), (4) and (5) of rule 49. (3) The assessing authority shall, after hearing the dealer in the manner specified in sub-rule (2), assess to the best of judgment, the amount of tax payable by the dealer in respect of a tax period or tax periods, for which assessment proceeding has been initiated, and impose penalty under sub-section (2) of section 43. (4) In the event of default by a de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d unamended Section 43 (1) of the OVAT Act, this Court in M/s. Keshab Automobiles (supra) observed as under: 13. It is significant that prior to its amendment with effect from 1st October, 2015 the trigger for invoking Section 43 (1) of the OVAT Act required a dealer to be assessed under Sections 39, 40, 42 and 44 for any tax period. The words where, after a dealer is assessed at the beginning of Section 43 (1) prior to 1st October, 2015 pre-supposes that there has to be an initial assessment which should have been formally accepted for the periods in question i.e. before 1st October, 2015 before the Department could form an opinion regarding escaped assessment or under assessment or the accused taking the benefit of a lower rate or being wrongly allowed deduction from his turnover or input tax credit to which he is not eligible. 14. However, under Section 43(1) of the OVAT Act, after its amendment with effect from 1st October, 2015 the Assessing Authority can form an opinion about the whole or part of the turnover of the dealer escaping assessment or being under assessed on the basis of any information in his possession . In other words, it is not necessary after 1st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the dealer has escaped assessment of tax and as such communication regarding acceptance of the assessment made under the provisions of Section 9 of the Act is not required to be communicated to the petitioner and the communication can only go in a situation when on scrutiny it will be found that the same is not in order or there is arithmetical error. Under the Taxation Rule the assessee is required to furnish self assessment and the authority is required to assess the same and there is no provision provided under the Act to communicate in case of acceptance of the assessment. Although under the provision of Orissa Value Added Tax Act under Section 38 read with Section 7(10) each and every return in relation to any tax period furnished by a registered dealer shall be subject to scrutiny by the assessing authority to verify the correctness of the calculation, application of correct rate of tax and interest etc and in case of any mistake, detected in course of scrutiny, the assessing authority shall serve a notice in the prescribed form as we find even from the provision of section 7 or sub-section (11) and as such, if the authorities have not issued any notice under Section 7(11), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame result would be reached from a collective reading of Section 39 of the OVAT Act with Rule 48 of the OVAT Rules as they stood prior to 1st October, 2015. The long and short of this discussion is that under the OET Act there is no concept of a deemed acceptance of a return filed by way of self assessment if nothing is heard from the Department after it is filed. There has to be an overt act of communication of such acceptance by the Department to the dealer. 33. Even in the context of the OVAT Act to which reference was made by the Bench in M/s. Nilachal Ispat Nigam Limited (supra), the position after 1st October 2015 where the concept of deemed acceptance was introduced for the first time, made it plain that prior to such amendment there was no such concept of deemed acceptance. This was noticed by this Court in M/s. Keshab Automobiles (supra) where it was concluded in para 21 to 23 as under: 21. A comparison of the language used in the amended Section 43 (1) of the OVAT Act with its version prior to 1st October, 2015 makes it clear that a new system has been put in place as far as reopening of returns filed as self-assessment is concerned. Now such reopening is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change to the OVAT Act and therefore had a direct bearing on the issues discussed in the said decision. Consequently, this Court finds that the decision in Nilachal Ispat Nigam Ltd. is per incuriam inasmuch as it fails to discuss the amended provisions of the OVAT Act which have a direct bearing on the issues adjudicated by this Court. 35. The decision of this Court in M/s. Keshab Automobiles (supra) has, as already noted, been affirmed by the Supreme Court of India in its order in Deputy Commissioner of Sales Tax v. M/s. Rathi Steel and Power Ltd. etc. and batch (supra). This Court, therefore, is unable to agree with the conclusion reached by the Division Bench of this Court in M/s. Nilachal Ispat Nigam Limited (supra) since it is not consistent with the legal position that emerges on the reading of Section 9 (2) of the OET Act with its corresponding provision of the OVAT Act viz., Section 39 (2) of the OVAT Act as it stood prior to 1st October 2015 and which has been interpreted in the above manner by this Court in M/s. Keshab Automobiles (supra). 36. Further, the decision in M/s. Keshab Automobiles (supra) also noticed earlier decisions of the Supreme Court in Ghanshya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he statute 40. Mr. Mishra, learned Standing counsel for the Department then submitted that the above interpretation which exposes a gap in the provisions of the OET might result in several similar cases of reopening of assessments being challenged by the Assessees or might prevent the Department from issuing notices for re-opening assessments. 41. It is not the task of this Court, while interpreting a taxing statute, to fill the lacunae. In Ransom (Inspector of Taxes) v Higgs [1974] 3 All ER 949, it was explained by Lord Simon that: It may seem hard that a cunningly advised taxpayer should be able to avoid what appears to be his equitable share of the general fiscal burden and cast it on the shoulders of his fellow citizens. But for the courts to try to stretch the law to meet hard cases (whether the hardship appears to bear on the individual tax-payer or on the general body of taxpayers as represented by the Inland Revenue) is not merely to make bad law but to run the risk of subverting the rule of law itself. 42. Referring to the above decision, Justice G.P. Singh in his Interpretation of Statutes (13th Edn., 2012) p. 829 states: The same rule applies e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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