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2017 (7) TMI 699 - HC - VAT and Sales TaxPrinciples of natural justice - method of selection for audit under Section 43 of the West Bengal Value Added Tax Act, 2003 - Is the Commissioner acting under the provisions of Section 43(1) of the West Bengal Value Added Tax Act, 2003 obliged to give notice, an opportunity of hearing to an assessee and pass a reasoned order prior to making a selection thereunder? - Held that: - Sub-section (1) of Section 43 enjoins a duty upon the Commissioner to select assessees for audit. The proviso thereto allows assessees specified therein, if selected under Sub-section (1) to be deemed not to be selected. At the time of selection, the sub-section does not in express words provide for a right of hearing. Sub-section (2) and (3) allows the assessee selected a right of hearing leading to the preparation of report enjoined under Sub-section (3). Sub-section (4) deals with the time frame to complete the audit. Sub-section (5) allows the Commissioner to assess the net tax payable by the assessee. Section 43AB relates to audit by a special team. It is different than Section 43. It operates at a different space. An assessee may have to undergo audit by a special team under Section 43AB, upon the satisfaction of the conditions required thereunder, notwithstanding such assessee not being selected under Section 43. It may have to undergo audit by a special team, even if, it is selected under Section 43. Section 43AB comes into play when the Commissioner has justifiable reasons to believe that the assessee is engaged in an activity detrimental to the State revenue. Section 142(2A) of the Act of 1961 and Section 43 of the Act of 2003 are not pari materia. Section 43 of the Act of 2003 allows a Commissioner to select on a random basis or upon information or otherwise, such percentage or such class or classes of assessees, as may be prescribed, for audit of accounts, registers of documents. The Commissioner, therefore, has to make a selection for the purpose of audit of accounts of an assessee in respect of a financial year. The vires of Section 43(1) of the Act of 2003 is not under challenge in the writ petition. Such sub-section enjoins and casts a duty upon the Commissioner to select a certain prescribed percentage of the assessees. Such percentage may be prescribed. Therefore, in a given financial year there will be a certain percentage of assessees who will be required to undergo an audit in terms of Section 43 of the Act of 2003. The petitioner is one of such assessees undergoing an audit under Section 43 for the financial year 2013-2014. Section 43 mandates a selection of the prescribed percentage. Acting under Section 43 of the Act of 2003 a Commissioner is obliged to select the prescribed percentage in the manner mandated. The petitioner has not substantiated that, the petitioner has been selected beyond the parameters of Section 43. Therefore, the question of giving him a hearing does not arise prior to his selection. Subsequent to the selection the assessee falls within the procedure prescribed in Section 43. It is not that the Commissioner has not understood the accounts and is requiring the assessee to undergo a special audit akin to Section 142(2A) of the Income Tax Act, 1961. There is a distinction between Section 43 and 43AB of the Act of 2003. Section 43AB of the Act of 2003 allows a Commissioner to call for audit of such accounts, records and documents of such assessee by a special team, or tax professional, to be nominated by him if the requirements prescribed under such section are fulfilled. Section 43AB is more akin to Section 142(2A) of the Income Tax Act, 1961. The petitioner is not entitled to any relief in the present writ petition. Petition dismissed - decided against petitioner.
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