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2015 (4) TMI 494 - HC - VAT and Sales TaxValidity of assessment order passed - Jurisdiction of Assessing Authority to pass the said order - Whether the Taxing authority has jurisdiction to make audit assessment under Section 42 of the OVAT Act after completion of the assessment under Section 43 of the said Act for the self-same tax period - Held that:- Where the tax audit conducted under subsection (3) of Section 41 results in detection of suppression of purchase or sale or both, erroneous claims of deduction including input tax audit, evasion of tax or contravention of any provision of the Act affecting the tax liability of the dealer, the assessing authority may notwithstanding the fact that the dealer may have been assessed under Section 39 or 40, serve on such dealer a notice as prescribed under the Rules along with a copy of the audit visit report for making an audit assessment. Therefore, if audit assessment has to be made after completion of any other assessment provided under the OVAT Act, the same is restricted to assessment made under Section 39 or Section 40 of the OVAT Act and all other types of assessment provided under the said Act are impliedly excluded. If the Legislature in its wisdom has taken away assessment as contemplated under Section 43 from Section 42 for the purpose of making audit assessment, after completion of any other assessment under the OVAT Act, Section 43 cannot be read into Section 42 by the State. Section 41(2) of the OVAT Act read with Rule 41(2) of the OVAT Rules empowers the Commissioner to direct audit on any specific issue or issues relating to any dealer or class or classes of dealers on being referred to by subordinate officers to check tax evasion. - Therefore, in case of an assessee, if the Revenue authorities decide not to exercise the power conferred under Section 41(2) of the OVAT Act read with Rule 41(2) of the OVAT Rules to make audit assessment for particular tax period and choose to proceed to complete the assessment under Section 43 of the OAVT Act, it is thereafter not permissible to assess the petitioner under Section 42 of the OVAT Act. Audit assessment under Section 42 cannot be made after completion of the assessment of escaped turnover under Section 43 of the OVAT Act read with Rule 50 of the OVAT Rules for the self-same tax period(s). - order of assessment passed under Section 42 of the OVAT Act for the period 29.03.2006 to 30.11.2008 under Annexure-1 is hereby set aside. However, it is open to the Assessing Authority to assess the petitioner under Section 42 of the OVAT Act excluding the period from 24.01.2006 to 31.07.2006 for which the dealer has already been assessed under Section 43 of the OVAT Act. - Decided in favour of assessee.
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