TMI Blog2006 (7) TMI 584X X X X Extracts X X X X X X X X Extracts X X X X ..... t No. 28 being operated by the petitioner with the State Bank of India, Shah-e-alam Branch, Ahmedabad, is attached for non-payment of Rs. 7,48,94,727 recoverable under the above-referred four reassessment orders. In order to appreciate the points raised by the petitioner in these petitions, it is necessary to notice the facts emerging from the record of the case, which are as under: (1) The petitioner is a company registered under the provisions of the Companies Act, 1956. It manufactures industrial paints as well as household paints and allied products. In the State of Gujarat, the petitioner has its manufacturing plant at Ankleshwar and branches at Narol, Sarkhej, Surat, Rajkot and Halol. The head office of the petitioner-company is situated at Mumbai. The petitioner is registered as a dealer, both under the State Act and the Central Sales Tax Act, 1956 ("the Central Act", for short). The old number of its certificate of registration was 20105551-GUJ-1-J410, whereas the new number is 0750001437. The Commissioner of Sales Tax has permitted the petitioner to furnish a consolidated return relating to all the places of business of the petitioner in the State of Gujarat at Ahmedab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State Act vide orders dated July 26, 1999, and held that the amounts of following sales as indicated below were liable to tax. Year Amt. under the State Act Amt. under the Central Act Total 1997-98 Rs. 2,28,86,300 Rs. 5,23,00,657 Rs. 7,51,86,957 1998-99 Rs. 2,56,06,703 Rs. 2,10,04,519 Rs. 4,66,11,222 (3) The competent officer thereafter determined the liability of the petitioner to pay the tax with penalty and interest as under: Year Amt. under the State Act Amt. under the Central Act 1997-98 Rs. 79,30,105 Rs. 1,49,05,686 1998-99 Rs. 99,09,794 Rs. 1,74,04,093 (4) It may be mentioned that the provisional assessment orders dated July 26, 1999, under section 41-B of the State Act were passed in respect of Ankleshwar unit of the petitioner with reference to the old certificate of registration No. 20105551-GUJ-1-J410. (5) Though the petitioner was permitted to furnish consolidated return relating to all the places of its business in the State of Gujarat at Ahmedabad and was fully aware of the fact that it was subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return relating to all the places of business of the petitioner in the State of Gujarat for assessment years 1997-98 and 1998-99 and also claimed benefits relating to the branch transfers effected from Ankleshwar unit, which were not accepted and treated as sales while passing the provisional assessment orders under section 41-B of the State Act. To the returns, separate sheets were annexed but it was not mentioned therein by the petitioner that branch transfers effected from Ankleshwar unit were not accepted but were treated as sales or that Sales Tax Officer had passed provisional assessment orders dated July 26, 1999, under section 41-B of the State Act against the petitioner or that the petitioner had invoked the appellate jurisdiction of the Assistant Commissioner of Sales Tax (Appeal) 8, Surat, against the orders passed under section 41-B of the State Act or that pursuant to the conditional stay order, the petitioner had deposited in all a sum of rupees one crore or that the appeals were dismissed by an order dated February 2, 2000 and got the regular assessment completed under section 41(3) of the State Act for assessment year 1997-98, vide order dated June 30, 2001, and fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 44 of the State Act. Under the circumstances, the Sales Tax Officer addressed a detailed letter dated January 31, 2003, to the Commissioner of Sales Tax and sought his guidance whether action should be taken against the petitioner under section 44 or section 67 or section 72 of the State Act. The Commissioner of Sales Tax informed the Sales Tax Officer on February 14, 2003, through administrative officer discharging duties in the office of the Deputy Commissioner of Sales Tax, Division-2, Ahmedabad, that action against the petitioner should be taken under section 44 of the State Act. (9) After abovementioned clarification was made by the Commissioner of Sales Tax, the respondent issued notice dated February 18, 2003, calling upon the petitioner to show cause as to why the amounts covered by transactions of branch transfers accepted during the course of regular assessments be not subjected to tax. The petitioner gave reply and was afforded sufficient opportunity of being heard. The respondent, by four different orders dated February 16, 2006, has upheld the self-explanatory provisional assessment orders dated July 26, 1999, passed under section 41-B of the State A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioners has averred that the respondent did not decide the petitioner's objections to the assessment notices by a speaking order as required by the Supreme Court in the decision rendered in the case of G.K.N. Driveshafts (India) Ltd. v. Income-tax Officer reported in [2003] 259 ITR 19 and therefore, the respondent could not have passed the reassessment orders. The petitioner has asserted in paragraph 14 of the petition that though the appeals lie against the reassessment orders, the petitioner is entitled to invoke extraordinary jurisdiction of this court under article 226 of the Constitution as reassessment notices were issued without jurisdiction and the respondent had failed to decide the petitioner's objections to the assessment notices by a speaking order whereas the assessment orders have been passed in total disregard of the decision of the Supreme Court in Ashok Leyland Ltd. v. State of Tamil Nadu [2004] 134 STC 473. Under the circumstances, the petitioner has filed the instant petitions and claimed reliefs to which reference is made earlier. On service of notice, Mr. Anilkumar Harilal Thakker, who is now designated as Deputy Commissioner of Commercial Tax and who wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l assessment orders passed under section 41-B of the State Act or it having filed appeals under section 65 of the State Act before the appellate authority at Surat or it having made necessary part payment to the tune of rupees one crore, etc., and as regular assessments under section 41(3) of the State Act were got completed by keeping the assessing officer in the dark about the earlier proceedings for the same assessment years, and by suppressing material facts, the reassessment orders should not be regarded as having been passed without jurisdiction. It is mentioned in the reply that the petitioner had produced regular assessment orders before the Gujarat State Sales Tax Tribunal and persuaded the Tribunal to dispose of the second appeals pending before it as having become infructuous after which, the petitioner had claimed refund and as fraud committed by the petitioner came to the knowledge of the assessing officer only then, reassessment orders should not be regarded as illegal or contrary to the provisions laid down by the Supreme Court in Ashok Leyland Ltd. v. State of Tamil Nadu [2004] 134 STC 473. In the reply, it is averred that no breach of principles laid down in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uary 17, 2006, after making necessary entry in the assessment register and dispatch register. What is highlighted in the additional reply is that the notices for reassessment were not issued at the behest of higher authority but a detailed note prepared was submitted before the higher authority in exercise of better governance and good practice. After asserting that at no point of time has the higher authority influenced the appropriate authority, it is maintained in the reply that letter dated March 14, 2003, cannot be construed as higher authority having influenced the decision of the appropriate authority. By filing additional reply, the respondent has prayed that the petitions, which have no merit, should be dismissed. Mr. K.H. Kaji, learned counsel for the petitioner, contended that "F" forms produced in the original were scrutinised and accepted during the course of regular assessment proceedings as branch transfers and therefore, in view of the decision of the Supreme Court in Ashok Leyland Ltd. v. State of Tamil Nadu [2004] 134 STC 473, the reassessment orders which are passed without jurisdiction should be set aside. According to the learned counsel for the petitioner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, the instant petitions should not be entertained by the court. The learned Government Pleader further contended that during the course of regular assessment proceedings, it was never disclosed by the petitioner that the premises of the petitioner situated at Ankleshwar were subjected to surprise check by the Sales Tax Officer of Flying Squad or that the provisional orders of assessment were passed under section 41-B of the State Act or that against those orders, the petitioner had filed appeals invoking appellate jurisdiction of the Assistant Commissioner of Sales Tax at Surat or that the petitioner was asked to make payment of rupees one crore as a condition precedent for entertaining the appeals or that the petitioner had deposited a sum of rupees one crore pursuant to the conditional order passed by the first appellate authority or that the appeals were dismissed by the first appellate authority against which second appeals were filed before the Tribunal which were pending and as the petitioner had failed to disclose material and relevant facts and suppressed them, the respondent was justified in passing the reassessment orders notwithstanding the scrutiny and acceptance of " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Act, but it was also noticed by the respondent that regular assessment orders could be revised under section 67 of the Act and therefore, by addressing a letter dated February 1, 2003, the respondent had tried to know whether the Commissioner of Sales Tax would like to exercise powers under section 67 of the Act or the powers of reassessment under section 44 of the State Act should be exercised, which can, in no circumstances, be termed as exercise of powers by the respondent at the behest of his superior, and therefore, reassessment orders are not liable to be set aside. It was argued that "reason to believe" of the respondent and application of mind to the facts of the case by the respondent is evident from the contents of letter dated February 1, 2003, and it is wrong to argue that the respondent had issued reassessment notices at the behest of his superior. According to the learned counsel for the respondent, the letter dated February 1, 2003, was addressed by the respondent to his superior officer for better governance and good practice to which reply dated February 18, 2003, was given which can never be construed as direction by a superior officer of the respondent to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an assessment is permissible only on limited grounds, such as fraud, collusion, misrepresentation or suppression of material facts or giving or furnishing of false particulars, since in such cases, the order would be vitiated in law. The Supreme Court has further explained that when the order passed in terms of sub-section (2) of section 6-A is found to be illegal or void ab initio or otherwise voidable, the assessing officer derives jurisdiction to direct reopening of the proceedings. It is further ruled by the Supreme Court in the said decision that mere change in the opinion of the assessing officer or to have a relook at the matter would not confer any jurisdiction upon him to get the proceedings reopened. In the light of above-referred principles, the question posed for consideration of this court, whether the respondent was justified in passing the reassessment orders, will have to be considered. It is well-settled that if an order is obtained by misrepresentation of facts or fraud, it cannot be said that there was true and fair disclosure of facts. The contention that as books of account and other evidence including form F, were produced, there was no duty on the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed under section 41-B of the State Act by filing four appeals. It is not in dispute that the petitioner was called upon to make part payment of its liability towards tax as condition precedent for entertaining the appeals and that the petitioner had complied with the said order. It is also not in dispute that the appeals were ultimately dismissed by the first appellate authority and therefore, the petitioner had approached the Gujarat State Sales Tax Tribunal by way of filing second appeals. All these relevant facts were never brought to the notice of the assessing officer when proceedings for regular assessments were undertaken by the officer. If these facts had been brought to the notice of the assessing officer, the assessing officer would not have accepted "F" forms submitted by the petitioner indicating branch transfers and would have been put on his guard. However, keeping the assessing officer in complete dark, the petitioner got regular assessment completed under section 41(3) of the State Act. When the provisional assessment takes place under section 41B of the State Act, the provisional assessment has to be taken into consideration while passing regular assessment ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant and material facts were not brought to the notice of the assessing officer at the time of completing regular assessments and therefore, a case was made out for exercising powers under section 44 of the State Act. However, it was noticed by the respondent that the regular assessment orders passed under section 41(3) of the Act were also revisable by the Commissioner of Sales Tax under section 67 of the State Act and if the Commissioner of Sales Tax was inclined to exercise his powers under section 67 of the State Act, there was no point in his exercising powers under section 44 of the State Act. Therefore, the respondent addressed a letter dated February 1, 2003, to the Commissioner of Sales Tax pointing out that the regular assessment orders passed under section 41(3) of the State Act could be dealt with either under section 44 of the State Act or under section 67 of the State Act or under section 72 of the State Act and sought his guidance as to which course should be adopted. The averments made in the affidavit-in-reply of the respondent read with relevant documents produced therewith indicate that the Commissioner of Sales Tax applied mind and thereafter informed the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tentions raised by the learned counsel for the petitioner, the petitions, which lack merits, are liable to be dismissed. It may be mentioned that while disposing of the petitions, this court has taken into consideration only the points of jurisdiction which were raised by the petitioner for consideration of this court and has not gone into the merits of the case, namely, whether in fact branch transfers were effected by the petitioner or not, etc., and the points on merits will have to be gone into by the appellate authority, if appeals are filed against the reassessment orders passed under section 44 of the State Act which are impugned in the instant petitions. Mr. Sunit S. Shah, learned Government Pleader, on instructions from Mr. Anilkumar Harilal Thakker, Deputy Commissioner of Commercial Tax, who is personally present in the court, states at the Bar that if appeals are filed against the reassessment orders passed under section 44 of the State Act within four weeks from today, the respondent shall not resist the applications for condonation of delay which may be filed by the petitioner. For the foregoing reasons, all the four petitions fail and are dismissed. Notices are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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