9911796707
TMI Blog2024 (8) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... er. Sub-section (4) of Section 28 provides that if a dealer, having furnished returns in respect of a period, fails to comply with the terms of notice issued under sub-section (2), the Assessing Authority shall, within five years after the expiry of such period, proceed to assess to the best of his judgment, the amount of tax due from the dealer. It is apt to notice here that Section 28 (4) of 1973 Act provides that Assessing Authority shall, within five years after the expiry of such period proceed to assess to the best of his judgment. The Supreme Court in Indian Aluminium Cables Limited [ 1976 (9) TMI 144 - SUPREME COURT] interpreting Section 11 (4) of 1948 Act which was para materia with Section 28 (4) of 1973 Act has held that Assessing Authority shall take effective steps after serving notice under sub-section (2) in case of best judgment assessment. The Court further clarified that effective steps include notice to dealer intimating him that he is proceeding to assess to the best of his judgment and opportunity of personal hearing. From the conjoint reading of Section 28A of 1973 Act and judgment of Supreme Court in Indian Aluminium Cables Limited, it is evident that Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary for the Assessing Authority to issue the notice for best judgement assessment under section 28 (4) of the Act within the period of five years? 3. The brief facts which are necessary to have a hang over the issue involved are hereby noticed. The applicant-assessee-Food Corporation of India (for short- FCI ) is a Central Government Undertaking which is engaged in the procurement and distribution of foodgrain across the country. It was registered in the State of Haryana under 1973 Act as well as Central Sales Tax Act, 1956. FCI filed its quarterly returns during the financial years 1977-78 and 1978-79. It disclosed its turnover Rs. 59,16,20,598.48/- for the year 1978-79. The Assessing Authority, in terms of Sections 28 of 1973 Act, issued notice dated 02.06.1986 for the assessment of financial year 1978-79 whereby FCI was directed to appear before Assessing Authority on 20.06.1986. 4. The FCI filed its objection dated 17.06.1986 stating that notice is barred by limitation so the same be withdrawn. The Assessing Authority framed ex-parte assessment vide order dated 28.11.1986 whereby declared turnover was rejected and re-determined to the tune of Rs. 16562435/-. 5. The appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Supreme Court in Indian Aluminium Cables Limited and another vs. The Excise and Taxation Officer and another (1977) 1 Supreme Court Cases 120, if legislature has not prescribed limitation period, the concept of reasonable period cannot be imported. Section 36 of 1973 Act does not come to rescue of the applicant-dealer because best judgment assessment is framed without books of account. The period of five years prescribed under Section 36 of 1973 Act to maintain books of account is applicable where assessment is made on the basis of books of account produced by dealer. In Madan Lal Arora vs. The Excise and Taxation Officer, Amritsar 1961 SCC OnLine SC 113, Supreme Court has considered Section 11 (4) of Punjab General Sales Tax Act, 1948 (for short 1948 Act ) and observed that authority could proceed to make best judgment assessment within three years. 9. We have heard counsel for the parties and perused the records with their able assistance. 10. The question of law to be answered centres around reading of Sections 28 and 28A of 1973 Act which are reproduced hereunder:- 28. Assessment of Registered Dealer: (1) If the assessing authority is satisfied without requiring the presence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of sales tax so paid to be adjusted against his liability to pay tax. 28A. Dispensing with the second notice, etc. Notwithstanding anything to the contrary contained in this Act or any other law or judgment or order of any court or any authority, in respect of cases relating to assessment for the period prior to the First April, 1979, - (i) no second notice shall be required to be issued. (a) under sub-section (4) or (5) of section 28; (b) under sub-section (4) or (5) of section 11 of the Punjab General Sales Tax Act, 1948 and (ii) it shall not be necessary, to intimate the basis for arriving at best of judgment assessment or to take any other step for proceeding to assess to the best of judgement within the period of five years as specified in the provisions mentioned in sub-clauses (a) and (b) above. [Emphasis supplied] 11. Section 28 prescribes procedure of assessment to be framed by Assessing Authority. As per 1973 Act, every dealer has to file quarterly returns which are followed by annual return. If the Assessing Officer finds that returns furnished in respect of any period are not correct and complete, he shall serve on such dealer a notice in the prescribed manner either ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be followed by an Assessing Authority while framing best judgment assessment. Section 28 of 1973 Act was para materia with Section 11 (4) of 1948 Act. While interpreting Section 11 (4) of 1948 Act, the Supreme Court held that in case, assessee having furnished a return fails to comply with terms of a notice issued under sub-section (2), the Assessing Authority has to take some effective steps such as issuance of a notice to the dealer intimating to him that he is proceeding to assess to the best of his judgment. He has to further give to the dealer a reasonable opportunity of being heard. The relevant extracts of the judgment are reproduced hereunder:- 7. Sub-section (4) of Section 11 is attracted in a case where a dealer having furnished a return in respect of a period fails to comply with the terms of a notice issued under sub-section (2). In such a case the assessing authority has to take some effective step, such as issuance of a notice to the assessee intimating to him that he is proceeding to assess to the best of his judgment the amount of tax due from the dealer. On failure of a dealer to furnish a return in respect of any period by the prescribed date the assessing aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d failure of the dealer as not a real failure on his part. [emphasis supplied] 13. The aforesaid judgment was delivered on 23.09.1976 and Section 28A of 1973 Act came to be inserted by Act No. 5 of 1982. The said Section is applicable only to assessments relating to the period prior to 01.04.1979 meaning thereby rigour of Section 28A of 1973 Act is not applicable to the assessments for the period from 01.04.1979 onwards. 14. Section 28 (4) of 1973 Act provides that if a dealer having furnished returns in respect of a period, fails to comply with the terms of a notice issued under sub-section (2), the Assessing Authority shall within five years, proceed to assess to the best of his judgment. Section 28 (4) of 1973 Act carries following ingredients:- (i) The dealer must have furnished returns for the period in question; (ii) The Assessing Authority must issue a notice under sub-section (2). The said notice should be in the prescribed manner and require the dealer to produce evidence, on a specified date and place, in support of his returns; (iii) The dealer has failed to comply with terms of the notice e.g. he does not appear or appears but does not submit documents in support of his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t clear that if anything in the Act is contrary to Section 28A, should be ignored. The Revenue has attempted to say that period of five years prescribed under Section 28 (4) of 1973 Act is contrary to mandate of Section 28A, thus, it should be ignored. We are in agreement with Revenue that anything contrary to Section 28A of 1973 Act should be ignored but it is necessary to find out whether period prescribed under Section 28 (4) of 1973 Act is contrary to Section 28A or it is in consonance with Section 28A of 1973 Act. 18. There are two clauses of Section 28A of 1973 Act i.e. Clause (i) and (ii). Clause (i) provides that no second notice shall be required to be issued under sub-sections (4) and (5) of Section 28 of 1973 Act. Section 28 (4) of 1973 Act does not provide for second notice. The requirement of second notice arose because of law laid down by Supreme Court in Indian Aluminium Cables Limited (supra). It was the judgment of Supreme Court which created requirement of second notice whereas sub-section (4) of Section 28 of 1973 Act was silent about second notice. Thus, Clause (i) has inserted provision in Section 28 (4) of 1973 Act to the effect that for making best judgment a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 973 Act. The aforesaid clause is not mandating that it shall not be necessary to proceed within five years as specified in Section 28 (4) of 1973 Act. Section 28A of 1973 Act has dispensed with requirement of second notice, opportunity of hearing, disclosure of basis for arriving at best of judgment assessment, however, it has not dispensed with requirement of proceeding within five years period as prescribed under Section 28 (4) of 1973 Act. Any other reading would amount to violence to aforesaid Section. The language of Section is clear and unambiguous. The intent and purport of legislature to insert aforesaid Section was to dispense with requirement of second notice as well as opportunity of hearing. There was no intention of legislature to dispense with requirement to proceed within five years period as prescribed under Section 28 (4) of 1973 Act. If contention of State is accepted, it would amount to substitution of word for used in between the words step and proceeding by expression or . If word for is substituted by word or , the stand of Revenue would be vindicated. The legislature has used word for which makes it clear that for proceeding to assess to the best of judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
