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TMI Blog2021 (10) TMI 1418X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment is made, that can be treated as an assessment, but before the deeming assessment is made or accepted, Section 22(4) of the TNVAT Act can very well be invoked and in that case the dealer can be assessed to the best of its judgment by the Assessing Officer and if anything is done under Section 22(4) of the TNVAT Act before 31st October of the succeeding year of the concerned assessment year, then the re-assessment order or the assessment order made under Section 22(4) of the TNVAT Act can be treated as assessment within the meaning of Section 2 (4-A) of the TNVAT Act and the limitation of six years under Section 27 (1) (a) of the TNVAT Act can also start from that assessment. Once a deeming provision comes into effect, for every assessment year, 31st October of the succeeding year is to be taken as a date where deeming provision comes into effect and every such return filed by the assessee within the time should be treated as a deemed assessment - before the expiry of the deeming assessment period, the revenue wanted to invoke the best judgment theory by invoking Section 22(4) of the TNVAT Act that would be possible for the revenue. However, once the deeming assessment i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the petitioner had stated that the petitioner had closed the business on 01.06.2016 itself and the registration number under TNVAT Act itself was cancelled. Hence, the petitioner requested to drop further proceedings pursuant to the notice, dated 22.02.2021. 7. However, the respondent, without taking into account of the said request made by the petitioner or by rejecting the said contention of the petitioner/dealer, has issued the impugned revised assessment order under Section 27 of the TNVAT Act on 30.03.2021, which is now been challenged by the petitioner in the present writ proceedings. 8. Assailing the said impugned order, dated 30.03.2021, among various other grounds on merits of the case, as a preliminary ground, Mr.N.Inbarajan, learned counsel appearing for the petitioner has raised a point that the impugned revised assessment under Section 27 of the TNVAT Act, is barred by limitation. 9. In this context, the learned counsel relied upon Section 27 (1)(a) of the TNVAT Act, which reads thus: Section 27. Assessment of escaped turnover and wrong availment of input tax credit .-(1)(a) Where, for any reason, the whole or any part of the turnover of business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. 13. Per contra, Mr.R.Sureshkumar, learned Government Advocate appearing for the respondent would contend that, under SubSection 4-A of Section 2 of the TNVAT Act, which has been amended or inserted subsequently, the word assessment has been defined that, assessment means an assessment made or deemed to have been made under this Act and includes a re-assessment or revision of assessment. 14. By relying upon this definition clause, the learned Government Advocate would contend that, the assessment within the meaning of Section 2 (4-A) is concerned, it is not confined only with the assessment made under Section 22(2) of the TNVAT Act by way of even the deemed assessment but also includes the re-assessment made under Section 22(4) of the TNVAT Act. 15. In this context, the learned Government Advocate would further contend that, insofar as the petitioner's case is concerned, such a re-assessment has been made on 30.09.2016. Therefore, if at all the limitation for invoking Section 27 of TNVAT Act to start, it should be started only from the said date i.e., 30.09.2016. In that case, the notice issued under Section 27(1) of the TNVAT Act, dated 22.02.2021, is saved by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 12-A of the Act and not the initial assessment orders. 8.In the case of J. Jagannathan Rao Vs. CIT and Excess Profits Tax, Andhra Pradesh this Court dealt with section 34 of the Indian Income- tax Act, 1922 which relates to reassessment in the case of income escaping assessment. It was held by this Court that once assessment is reopened, the previous underassessment is set aside and the whole proceedings star afresh. Ramaswami, J. speaking for the Court observed: Section 34 in terms states that once the Incometax Officer decides to reopen the assessment he could do so within the period prescribed by serving on the person liable to pay tax a notice containing all or any of the requirements which may be included in a notice under section 22(2) and may proceed to assess or reassess such income, profits or gains. It is, therefore, manifest that once assessment is reopened by issuing a notice under sub-section (2) of section 22 the previous underassessment is set aside and the whole assessment proceedings start afresh. When once valid proceedings are started under section 34(1)(b) the Income tax Officer had not only the jurisdiction but it was his duty to levy tax o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rectified order is also 'any order' which can be rectified under Rule 38. Although the above case related to an order which had been subsequently rectified, the principle laid down therein would, in our opinion, be also applicable in cases where reassessment is made on the ground that certain amounts of turnover had escaped assessment. 17. Similarly, he also relied upon yet another decision of the Hon'ble Supreme Court reported in (1987) 1 SCC 684 in the matter of Kundan Lal Srikishan, Mathura (U.P) Vs. Commissioner of Sales Tax, U.P., where it has been held that, on re-assessment or rectification, period of limitation would run from the date of such order and not from the date of the original assessment order. By relying upon these two decisions, the learned Government Advocate would content that the law laid down by the Hon'ble Supreme Court in the said two cases cited supra would strengthen the argument of him that if the limitation point can be raised, it shall start only from the re-assessment that has been made only in the year 2019 and not from the original deemed assessment from 31.10.2013. Therefore the learned counsel would contend that the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling of returns by the dealers is being followed, so that, at any time, within the period of limitation, without loss of time, the escaped revenue is assessed by way of revision. It is further stated in the Statement of Objects and Reasons by the Legislature that, in tune with the general principles of the Value Added Tax and the provisions contained in the Value Added Tax Acts of other States, the Government have decided to dispense with the existing procedure of passing an assessment order by the assessing authority and to replace it with a system of deemed assessment. Under the proposed system of deemed assessment, a dealer shall be deemed to have been assessed if the returns are filed as prescribed. 23. If we take up the said Objects and Reasons given for such amendment into aid, the intention of Legislature to make an amendment of Section 22 (2) of the TNVAT Act is to close the chapter by giving a deeming provision and once the dealer filed return in the prescribed form and accompanied with the prescribed documents and proof of payment of tax, every such dealer shall be deemed to have been assessed for the year on the 31st day of October of the succeeding year. 24. Here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing clause come into effect i.e., on or before 31st day of October of the succeeding year. Otherwise, if we construed this provision in different manner to state that after the 31st day of October of the succeeding year, once the deeming assessment is made, then it is open to the Assessing Officer to invoke Section 22(4), then the ingredients made in Section 22(4) may not be available to the Assessing Officer, because the words the return filed is incomplete or incorrect or if not accompanied with any of the document prescribed or proof of payment of tax , cannot once again be restated, since the deeming assessment once comes into effect and accepted it is presumed that such deeming assessment has been made or accepted only after accepting the return submitted by the dealer accompanied with the prescribed documents and proof of payment of tax. 30. Therefore, once the deeming assessment is made, that can be treated as an assessment, but before the deeming assessment is made or accepted, Section 22(4) of the TNVAT Act can very well be invoked and in that case the dealer can be assessed to the best of its judgment by the Assessing Officer and if anything is done under Section 22(4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 27 of the TNVAT Act. 37. This position would have been possible prior to the amendment made in the year 2012 under which the deeming provision has been inserted in Sub-Section 2 of Section 22 of the TNVAT Act. 38. Once a deeming provision comes into effect, for every assessment year, 31st October of the succeeding year is to be taken as a date where deeming provision comes into effect and every such return filed by the assessee within the time should be treated as a deemed assessment. 39. But, before the expiry of the deeming assessment period, the revenue wanted to invoke the best judgment theory by invoking Section 22(4) of the TNVAT Act that would be possible for the revenue. However, once the deeming assessment is completed at the end of 31st October of the succeeding year, then that date shall be construed as an assessment date for the purpose of taking the limitation of six years for invoking the proceedings of revised assessment under Section 27 (1) (a) of the TNVAT Act. 40. In that view of the matter, this Court feels that there is every force in the said contention raised by the learned counsel appearing for the petitioner. However, the submission made by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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