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TMI Blog2024 (2) TMI 1246X X X X Extracts X X X X X X X X Extracts X X X X ..... in any of the exceptions carved out in the case of Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai [ 1998 (10) TMI 510 - SUPREME COURT] . There appears to be no dispute at bar that the power of assessment under Section 14 of the Nagaland (Sales of Petroleum and Petroleum Products, including Motor Spirit and Lubricants) Taxation Act, 1967 has been delegated to the Superintendent of Taxes by the Commissioner of Taxes under Section 45 of the said Act. In the instant case also, in all the writ petitions, the original assessment orders were passed by the Superintendent of Taxes. The petitioner s contention, in all three writ petitions, is that the powers to re-assess the escape turnover is primarily vested by Section 14 on the Assessing Officer and same is to be exercised subject to certain limitations and that in exercise of power under Section 20(1) of the Act, the Additional Commissioner does not have the power to re-assess the escape turnover which is outside the purview of the powers of suo-motu revision conferred on the Additional Commissioner. In the present bunch of writ petitions, the petitioner has challenged the very jurisdiction of the respondent authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent No. 3 cannot initiate proceedings with a view to start a fishing and roving inquiry in matters or orders which are already concluded unless there are materials available on records called for by him from which he arrives at a conclusion that the assessment orders are erroneous and prejudicial to the interest of revenue - the power under Section 20 of the Act cannot be exercised by the Commissioner without satisfying the two components mentioned in the Section 20(1) of the Act, the Commissioner does not have the power to reexamine the accounts and determine the turnover himself at a higher figure merely because he is of the opinion that the estimate made by the assessing authority was on the lower side. This Court is of considered opinion that the respondent No. 3 acted beyond jurisdiction in issuing show cause notices dated 28.04.2020 to the petitioner for the assessment years mentioned therein and also in issuing orders by which the assessment for the years 2012-2013, 2013-2014 and 2014-2015 were revised and turnover escaped assessment and short payment of notice taxes were determined. The respondent No. 4 has also acted beyond jurisdiction in issuing demand notices da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and under Central Sales Tax Act, 1956 having the certificate of registration bearing registration No. 13000024266 and 13010255140 respectively. 6. For the assessment year 2014-2015, 2012-2013, and 2013- 2014, the original assessment was completed by the Superintendent of Taxes, Ward-F, by order of assessment dated 19.01.2015, 16.01.2015 and 20.01.2015 respectively under the Nagaland (Sales of Petroleum and Petroleum Products, including Motor Spirit and Lubricants) Taxation Act, 1967 and under Central Sales Tax Act, 1956 in exercise of powers under Section 11 (3) of the Nagaland (Sales of Petroleum and Petroleum Products, including Motor Spirit and Lubricants) Taxation Act, 1967 read with Section 9 (2) of the Central Sales Tax Act, 1956. 7. The Additional Commissioner of Taxes (Respondent No. 3), issued a notice dated 28.04.2020 under Section 20 of the Nagaland (Sales of Petroleum and Petroleum Products, including Motor Spirit and Lubricants) Taxation Act, 1967 directing the petitioner to appear in-person or through a representative in writing before the said authority on 20.05.2020 in respect of the proceedings for assessment year 2013-2014 and 2014-2015 as well as on 19.05.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r scrutiny despite several notices 7. Cross examination of transaction records between IOC (AOD) and IOC (MD) for the period reveals the following inconsistencies in figures; items Inconsistencies between sales declared in Format III and Sales declared at the time of assessment by IOC (MD) Stock issued by MD to AOD ADD Sales Figures Difference in amount (1-3) Applicable rate of tax Remarks HS D 754019668 31760 741622607 12397061.52 @12.6% Value of K yet to be ascertained Tax Period 2012-13 1. Statutory Forms utilization statement shows that there was Purchase of LPG worth Rs. 425599462/- during the period. However, the Sales figures as per AOS (excluding tax) shows Rs. 274103366/- 2. IOC (MO) record shows that it has received 107.437 KL and 4372.958 of LPG (D$NS) and LPG (ND IND) respectively from IOC (ADD). Whether such stocks were issued inclusive of tax or not and why? No Tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of tax by Rs. 79999/- against the turnover of Rs. 329984754/- @2% (6599695- 6519696). 5. CST Sales declared including tax was Rs. 336504450/-. However, CST Sales supported by Form C was Rs. 330602310/-only. Consequently, there is possible evasion of tax by way of assessing sales turnover of Rs. 5902140/- at a lower rate of 2% instead of 12% resulting in short assessment and short payment of tax by Rs. 590214/-. 6. No record of purchase of MS, HSD and SKD was made available to this Court despite several notices; No record of transactions effected to other OMC was disclosed. 7. Cross examination of transaction records between IOC (AOD) and IOC (MD) for the period reveals the following inconsistencies in figures; Item Inconsistencies between sales declared in Format III and Sales declared at the time of assessment by IOC (MD) Stock issued by MD to (AOD) (AOD) Sales Figures Difference in amount (1-3) Applicable rate of tax Remarks HSD 970886 33744 L 125 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e again call upon to appear in person or through representative duly authorized by you in writing before me on the date and time given below at my Office Chamber and to further show cause in writing and with all supporting documents as to why the returns filed by you for the period should not be rejected an incorrect and incomplete and necessary action including an order under Section 20 of the Nagaland (Sales of Petroleum Etc..) Taxation Act, 1967 should not be passed against you. Date Time Tax period 19.05.2020 11 am 2011-12 and 2012-13 20.05.2020 11 am 2013-14 and 2014-15 Take notice that in the event of your further failure to comply with the terms of this notice, I shall be at liberty to initiate appropriate action against you under the Act and also pass revision order under Section 20 of the Act ex-parte without any further reference to you. 8. Thereafter, the respondent No. 3 passed a final order in purported exercise of powers under Section 20 of the Nagaland (Sales of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 310456219 Rs. 27458533 MS 11943 KL x 54847.45 = 655043095/- 647600676 74,42,419 Nil Rs. 7442419 SKO 10284KL x 15968.93-16,42,24,570/- 14,19,04,134 2,23,20,436 Nil 223320436 4. Turnover escaped assessment and short payment of tax during the year; Item Turnover escaped assessment Applicable rate of tax Short payment of tax LPG Rs. 16151134/- 4% Rs. 646045/- CST Rs. 3678991/- 12% but assessed @ 2% Rs. 367899/- HSD Rs. 27458522/- 12% Rs. 3295022/- MS Rs. 7442419/- 20% Rs. 1488483/- SKO Rs. 22320436 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ADD) Sales Figures Diff. in value Less CST turnover Turnover escaped assessment 1 2 3(1-2) 4 5(1-3-4) HSD 33744 KL x 54550.31 = Rs. 184,07,45,660.64 125,83,28,794 58,24,16,866.64 32,61,26,632 25,62,90,234 MS 11677 KL x 565515.9 = Rs. 65,99,36,164.30 65,74,70,205 24,65,959.3 545064 1920895.3 SKO 10260 KL x 15968.93 = Rs. 163841221.80 14,22,32,090 21609131 Nil 21609131.80 4. Turnover escaped assessment and short payment of tax during the year; Item Turnover escaped assessment Applicable rate of tax Short payment of tax LPG Rs. 256290234.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m has received 35500 KL, 12948 KL and 10260 KL of HSD, MS and SKO respectively from MD. The value of the stocks received is calculated on the basis of sales declared by MD in Format III in respect of SKO and Ms HPCL in respect of HSD and MS during the same period. Item Stock received from MD by AOD Value as calculated on the basis of sales statement declared by MD in Format-III and for HPCL during the same period HSD 35500 KL 12948 x 51297.43= Rs 66,41,99,123.64 MS 12948 KL 3550 x 46072.61- Rs. 163,55,77,655 SKO 10260 KL 10260 x 24777.24= Rs. 254214482.40 3. Total turnover escaped assessment during the period item Stock value received from MD Purchases during period Total (stock the received and purchased) (AOD) sales Figures Less CST sales Turnover escaped assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 4,18,80,141/- in respect of assessment year 2013-2014 and to make payment of Rs. 19,72,50,326/- in respect of assessment year 2014- 2015 on or before 09.10.2020. No fresh assessment order was passed by the assessing authority i.e., the respondent No. 4. 13. In these writ petitions, the aforementioned show cause notice dated 28.04.2020, the orders passed by the respondent No. 3 determining the turnover escaping assessment and short payment of taxes for the aforementioned period, as well as notice of demand dated 09.09.2020 for the assessment years 2012-13, 2013-14 and 2014-15, issued against the petitioner by the respondents have been impugned. 14. Dr. A. Saraf, learned senior counsel for the petitioner has submitted that the impugned show cause notice dated 28.04.2020 and the orders passed by respondent No. 3 determining the turnover escaping assessment and short payment of taxes during the period under consideration and subsequent demand notice dated 09.09.2020 are prima facie illegal and without jurisdiction and contrary to the provision of Section 20 of the Nagaland (Sales of Petroleum and Petroleum Products, including Motor Spirit and Lubricants) Taxation Act, 1967. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment already completed by the assessing authorities. 17. In support of his submission learned Senior Counsel has cited a ruling of a division bench of this Court in Sri Rajendra Singh and others Vs. Superintendent of Taxes and others reported in (1990) 1 GLR 449, in which this court was dealing with the power of suo-motu revision of the Commissioner under Section 21 of the Tripura Sales Tax Act, 1976, which is in pari-materia with the Section 20 of the Nagaland (Sales of Petroleum and Petroleum Products, including Motor Spirit and Lubricants) Taxation Act, 1967, wherein it was observed as follows: 7. From a reading of Sub-section (1) of Section 21 it is clear that the power of suo motu revision can be exercised by the Commissioner only if, on examination of the records of any proceedings under this Act, he considers that any order passed therein by any person appointed to assist him is erroneous in so far as it is prejudicial to the interest of the revenue . It is, therefore, not an arbitrary or unchartered power. It can be exercised only on fulfilment of the requirements laid down in Sub-section (1). The consideration of the Commissioner as to whether an ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in Rajendra Singh Vs. Superintendent of Taxes (Supra), wherein it was observed as follows: 10. From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an officer acting in accordance with law makes certain assessment and determines the turnover of a dealer, the same cannot be branded as erroneous by the Commissioner simply because according to him the order should have been written more elaborately. This section does not visualise a case of substitution of judgment of the Commissioner for that of the officer, who passed the order, unless the decision of the subordinate officer is held to be erroneous. Cases may be visualised where assessing officer while making an assessment examines the accounts, makes his enquiries, applies his mind to the facts and circumstances of the case and determines the turnover either by accepting the accounts or by making some estimates himself. The Commissioner on perusal of the records may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the turnover at a higher figure than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same are maintainable even if alternative remedies are provided in some form by the said statute. In support of his submission, learned Senior Counsel for the petitioner has cited a ruling of the Supreme Court of India in the case of Godrej Sara Lee Limited Vs. Excise and Taxation Officers-cum-Assessing Authority and Others reported in 2023 SCC online SC 95. 23. Learned Senior Counsel for the petitioner has also cited a ruling of the Supreme Court of India in the case of Commissioner of Income Tax, Mumbai Vs. Amitabh Bachchan reported in (2016) 11 SCC 748 , wherein it was observed that when the Act provides different shades of power on different authority to deal with the orders of assessment passed by the primary authority, the said powers are to be exercised within the areas specifically delineated by the Act, and the exercise of power under one provision cannot trench upon the powers available under another provision of the Act. 24. Learned Senior Counsel for the petitioner has submitted that in the instant case, the Commissioner has himself by calling for documents from the assessee and conducting further inquiries to find out as to whether the assessee has sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of assessment himself the Additional Commissioner has in this case exceeded the powers which were conferred on him by the statute, and therefore, it is submitted that the impugned notices, orders of determining the turnover, escaping assessment and short payment of taxes during the period under consideration and subsequent demand notice dated 09.09.2020 are illegal and without jurisdiction and therefore liable to be set aside. 28. Learned Senior Counsel for the petitioner has also submitted that the impugned notices dated 28/04/2020 were issued under Section 20 of the Nagaland (Sales of Petroleum and Petroleum Products, including Motor Spirit and Lubricants) Taxation Act, 1967, whereas the impugned orders determined the alleged escape turnover not only under the Nagaland Act of 1967 but also under the Central Sales Tax Act, 1956. Similarly, the demand notice included the demand not only under Nagaland Act of 1967 but also under the Central Sales Tax Act, 1956. Hence, it is submitted by the learned Senior Counsel for the petitioner that the said orders determining the alleged escape turnover and subsequent demand notices are without jurisdiction and not tenable in law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09.09.2020, which has been impugned in this case. 34. It is submitted that the petitioner, instead of clarifying the assessment and the entries in the returns before the concerned authorities and instead of availing the remedies available to it under the statutes has approached this Court by invoking its writ jurisdiction, which according to learned Senior Government Counsel, same is not available to the petitioner under the facts and circumstances of the case, and therefore, he has prayed for dismissing the writ petitions. 35. I have considered the submissions of learned counsel for both sides and have gone through the materials on record very carefully, including the pleadings of the parties supported by affidavits. 36. First of all, let me discuss the question of maintainability of the present writ petitions. The Supreme Court of India in the case of Godrej Sara Lee Limited Vs. Excise and Taxation Officers-cum-Assessing Authority and Others (Supra) has observed as follows: 4. Before answering the questions, we feel the urge to say a few words on the exercise of writ powers conferred by Article 226 of the Constitution having come across certain orders passed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e matter and if such objection were found to be of substance, the courts would be rendered incapable of even receiving the lis for adjudication. On the other hand, the question of entertainability is entirely within the realm of discretion of the high courts, writ remedy being discretionary. A writ petition despite being maintainable may not be entertained by a high court for very many reasons or relief could even be refused to the petitioner, despite setting up a sound legal point, if grant of the claimed relief would not further public interest. Hence, dismissal of a writ petition by a high court on the ground that the petitioner has not availed the alternative remedy without, however, examining whether an exceptional case has been made out for such entertainment would not be proper. 6. At the end of the last century, this Court in paragraph 15 of the its decision reported in (1998) 8 SCC 1 (Whirlpool Corporation v. Registrar of Trade Marks, Mumbai) carved out the exceptions on the existence whereof a Writ Court would be justified in entertaining a writ petition despite the party approaching it not having availed the alternative remedy provided by the statute. The same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, this court is of considered opinion that the present case falls within the exception No.(iii) carved out in the case of Whirlpool Corporation Vs. Registrar of Trademarks, Mumbai (Supra), therefore, the present bunch of writ petitions are maintainable. 39. Relevant provision of Section 20 of the Nagaland (Sales of Petroleum and Petroleum Products, including Motor Spirit and Lubricants) Taxation Rules, 1967 are quoted herein below. Section 20 (1)- The Commissioner may call for and examine the records of any proceeding under this Act, and if he considers that any order passed therein by any person appointed under Section 5 to assist him, is erroneous in so far as it is prejudicial to the interests of revenue, he may, after giving the dealer an opportunity of being heard, and after making or causing to be made such inquiry as he deems necessary to pass such orders thereon as the circumstances of the case justify including an order enhancing or modifying the assessment and directing a fresh assessment. (2) In the case of any order other than the order to which subsection(1) applies, passed by any person appointed under Section 5 to assist him, the Commissioner may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Superintendent of Taxes, who is a person appointed under Section 5 of the Nagaland (Sales of Petroleum and Petroleum Products, including Motor Spirit and Lubricants) Taxation Act, 1967 to assist the Commissioner. 42. We have seen herein before that for exercising powers under Section 20 of the Nagaland (Sales of Petroleum and Petroleum Products, including Motor Spirit and Lubricants) Taxation Act , 1967, the Commissioner must come to a conclusion that the orders passed by the person appointed under Section 5 of the Act to assist him is erroneous, however, in the instant case, bare perusal of the orders dated 09.09.2020 passed in connection with the Assessment year 2014-2015, 2012-2013 and 2013-2014, it appears that though it is observed therein that the assessment orders are erroneous so far as it is prejudicial to interest of revenue, however, it is also mentioned therein that it requires further inquiry and verification, which itself shows that the respondent No. 3 had not arrive at a conclusion that the order of assessment passed by the Assessing Officer were erroneous, rather, it appears that the respondent No. 3 had embarked upon reverification and recalculation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t No. 3 cannot initiate proceedings with a view to start a fishing and roving inquiry in matters or orders which are already concluded unless there are materials available on records called for by him from which he arrives at a conclusion that the assessment orders are erroneous and prejudicial to the interest of revenue. 44. The power under Section 20 of the Act cannot be exercised by the Commissioner without satisfying the two components mentioned in the Section 20(1) of the Act, the Commissioner does not have the power to reexamine the accounts and determine the turnover himself at a higher figure merely because he is of the opinion that the estimate made by the assessing authority was on the lower side. Further, even if we consider that the Act bestows the Commissioner all powers available under the Act, still the respondent No. 3 cannot exercise the power which is available under a different provision of the Act in purported exercise of power available in another provision of the Act, i.e., in the instant case, by initiating proceedings under Section 20 of the Act, the respondent No. 3 cannot exercise the powers vested in him under Section 14 and 13 of the Act, as in case o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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