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TMI Blog2013 (5) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... on is filed. 2. Contention raised by the counsel for the petitioner is that Section 17(5)(A) was introduced by Finance Act 1998, with effect from 1.4.1998 and that therefore the penalty as provided under Section 17(5)(A) of the Act cannot be levied in respect of any assessment year prior to 1.4.1998. In my view, this contention is untenable. Section 17(5)(A) of the Act reads thus; "Where on reopening of an assessment completed under sub-section(4), in respect of any dealer, it is found that the amount of tax, if any, paid by such dealer is less than the amount of tax which he is liable to pay on such fresh assessment, the assessing authority shall direct such dealer to pay the difference between the amount of tax already paid by him and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er does not exceed rupees fifteen lakhs (2) assesses having dealings only in goods which are completely exempted from tax or assesses having dealings at non-taxable points of sale or purchase of goods coming under the First, Second or Fifth Schedule to the Act and (3) assessees whose tax liability does not exceed rupees five thousand in a year, irrespective of any limit in turnover. Even though the petitioners have a case that the Commissioner of Commercial Taxes though circulars issued compelled the assessing officers to complete the assessments under Section 17(4) of the Act, the procedure for assessment contemplated under the relevant KGS Rules is optional in nature and in order to avail the benefit, the assessees will have to comply wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s prior to 1998-99 also if those assessment were pending and assesses filed declarations in Form No.21CCC with documents accompanied thereto and opted for assessment under Section 17(4) after 1.4.1998 and when such assessments competed under Section 17 (4) are revised leading to levy of higher amount of tax. Though the petitioners contend that penalty under Section 17(5A) cannot be levied for any year prior to 1998-99 as it was introduced with effect from 1.4.1998, the said argument is not tenable because those who exercised option for assessment under Section 17(4) in pending assessments after 1.4.1998 and whose assessments are so completed will necessarily and inescapably take the consequence of penalty under Section 17(5A) if the origin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment notice, filing of reply and contesting the proposal for assessment made by the assessing officer. Section 17(4) only visualises completion of assessment in terms of the claim made by the assessees who are presumed to be honest in the declarations made by them in the returns filed and the statements accompanying thereto, namely Form No.21CC and the documents attached thereto. In sch cases it is mandatory for the assessing officer to complete the assessment without scrutiny, but after prima facie checking the returns and documents furnished by the petitioners. The accounts are not called for, for verification and the officer accepts the claims of the assessees made in the returns at the time of completion of assessment under Section 17( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h applicable to specific categories of assessees is not mandatory but only optional and those who exercise such option and deriving the benefit or advantage of assessment based on their own returns and statements without scrutiny are only subjected to a higher penalty under Section 17(5A). The petitioners contended that through circulars 28/95 and 30/99 issued by the Commissioner of commercial taxes (Old Board of Revenue) assessments under Section 17(4) were made mandatory for the categories of assessees covered under Section 17(4) and the Commissioner directed the assessing officers to complete the assessments under section 17(4) and for failure threatened them with disciplinary proceedings and therefore the officers completed the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circulars above referred are illegal and the assessing officers shall revoke such penalty orders. In the result I hold that the petitioners who have exercised option under Section 17 (4) that is assessment based on the returns and statements filed by them constitute a different class from the other assessees, whose assessments were completed after verification of accounts and after following the procedure prescribed under Section 17(2) or (3) of the Act. While in the case of those who opt for Section 17(4) assessments the assessees have to be careful in regard to their returns and statement filed in support thereof, because the assessing officer acts upon such declarations,while in the case of other assessees, it is for the officer to be ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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