9911796707
TMI Blog2008 (9) TMI 884X X X X Extracts X X X X X X X X Extracts X X X X ..... a retailer of stationery and allied goods and runs his business in Municipal Market Complex, Talcher. He is registered under the OVAT Act having TIN No. 212713031452. Prior to issuance of the impugned notice dated July 16, 2008 under annexure 1 in form VAT 301, notices under sub-rule (1) of rule 49 of the OVAT Rules (vide annexure 2 series) in form VAT 306 for audit assessment for the periods 2005-06 and April 1, 2006 to October 31, 2006 had been served on the petitioner. In response to such notices, the petitioner produced books of account for the said periods before the assessing officer. The assessing officer vide his order dated December 2, 2006 completed the audit assessment for the periods from April 1, 2005 to March 31, 2006 and from April 1, 2006 to October 31, 2006 under section 42 of the OVAT Act raising demand of Rs. 22,143 and Rs. 6,966, respectively, including penalty under section 42(5) of the OVAT Act vide annexure 3 series. Thus, according to the petitioner the subsequent notice under rule 44(2) of the OVAT Rules in form 301 for the purpose of conducting tax audit for the period from April 1, 2005 till the date of audit visit vide annexure 1 issued to the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The relevant provisions of section 41, section 42 and section 43 of the OVAT Act are quoted below: "Section 41. Identification of tax-payers for tax audit.-(1) The Commissioner may select such individual dealers or class of dealers for tax audit on random basis or on the basis of risk analysis or on the basis of any other objective criteria, at such intervals or in such audit cycle, as may be prescribed. (2) After identification of individual dealers or class of dealers for tax audit under sub-section (1), the Commissioner shall direct that tax audit in respect of such individual dealers or class of dealers be conducted in accordance with the audit programme approved by him: Provided that the Commissioner may direct tax audit in respect of any individual dealer or class of dealers on out-of-turn basis or for more than once in an audit cycle to prevent evasion of tax and ensure proper tax compliance. (3) Tax audit shall ordinarily be conducted in the prescribed manner in the business premises or office or godown or warehouse or any other place, where the business is normally carried on by the dealer or stock-in-trade or books of account of the business are kept or lodged tempor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced by the dealer and after causing such other enquiry as he deems necessary, assess the tax due from that dealer accordingly. (5) Without prejudice to any penalty or interest that may have been levied under any provision of this Act, an amount equal to twice the amount of tax assessed under sub-section (3) or sub-section (4) shall be imposed by way of penalty in respect of any assessment completed under the said sub-sections. (6) Notwithstanding anything contained to the contrary in any provision under this Act, an assessment under this section shall be completed within a period of six months from the date of receipt of the audit visit report: Provided that if, for any reason, the assessment is not completed within the time specified in this sub-section, the Commissioner may, on the merit of each such case, allow such further time not exceeding six months for completion of the assessment proceeding. (7) No order of assessment shall be made under sub-section (3) or sub-section (4) after the expiry of one year from the date of receipt of the audit visit report. Section 43. Turnover escaping assessment.-(1) Where, after a dealer is assessed under section 39, 40, or 44 for any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lculation of output tax charged, physical verification of stock-in-trade, collection of sample goods and examination of such other records and documents as may be required to determine the actual tax liability of the dealer. In course of tax audit, dealer is required to render all necessary assistance to produce all accounts, documents, records and also allow access to the accounts, if any, maintained electronically, as may be required by the officer conducting the audit. [See rules 44(1) and 45(1)]. After completion of tax audit, the officer in-charge of the audit shall submit the audit visit report in form VAT-303 within seven days to the assessing authority along with the statements recorded and documents obtained evidencing suppression of purchase or sale or both, erroneous claims of deduction including input credit, and evasion of tax, if any, relevant for the purpose of investigation, assessment or such other purpose [see section 41(4) and rule 45(3)]. "Audit assessment" means an audit assessment made under section 42 of the OVAT Act. If any tax audit results in the deduction or suppression of purchase or sale or both and erroneous claim of detection including inputtax credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the audit visit report. If for any reason the assessment is not completed within the time specified, the Commissioner may, on the merits of each such case, allow such further time not exceeding six months for completion of assessment proceeding. Section 42(7) provides that no order or assessment shall be made after the expiry of one year from the date of receipt of the audit visit report. Section 43 read with rule 50 deals with turnover escaping assessment. Where after a dealer is assessed under sections 39, 40 and 42 for any tax period, the assessing authority on the basis of any information in his possession is of the opinion that the whole or any part of the turnover of the dealer in respect of such tax period or periods has (a) escaped assessment, or (b) under-assessed, or (c) been assessed at a rate lower than the rate at which it is assessable or that the dealer has been allowed wrongly any deduction from his turnover or input-tax credit to which he is not eligible he (the assessing authority) may proceed to assess the amount of tax due from the dealer. To make such assessment the assessing authority shall serve a notice on the dealer in VAT-307 and after giving the dea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... framed thereunder have taken care of the situation where a dealer is under-assessed or its turnover has escaped assessment while making audit assessment under section 42 of the Act. The interest of the Revenue is well protected under section 43 which provides longer period of limitation of five years to take action under that section, in respect of the period(s) where audit assessment under section 42 of the OVAT Act had been completed. Thus, there being adequate safeguard provided in the statute for assessing the undisclosed/escaped turnover/under-assessments for different reasons as contained in section 43, resorting to section 41 for repeated tax audits and audit assessments is wholly unjustified, arbitrary and illegal and thereby provision of section 43 in relation to assessment made under section 42 would be rendered redundant. Sections 41 and 42 of the OVAT Act should not be interpreted so as to circumvent section 43 of the said Act. When the statute provides for a particular procedure, the authority has to follow the same and cannot be permitted to act in contravention of the same. It is well-settled legal position that where a statute requires to do a certain thing in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingh, the respondent, as a Minister with effect from November 23, 1996, after his resignation from the Council of Ministers on March 8, 1996, during the term of the same Legislative Assembly, without getting elected in the meanwhile, was improper, undemocratic, invalid and unconstitutional. His reappointment is accordingly set aside though at this point of time, it is of no consequence. It would be subverting the Constitution to permit an individual, who is not a Member of the Legislature, to be appointed a Minister repeatedly for a term of "six consecutive months", without getting himself elected in the meanwhile. The practice would be clearly derogatory to the Constitutional scheme, improper, undemocratic and invalid. Article 164(4) is at best only in the nature of an exception to the normal rule of only Members of the Legislature being Ministers, restricted to a short period of six consecutive months. This exception is essentially required to be used to meet a very extraordinary situation and must be strictly construed and sparingly used. The clear mandate of article 164(4) that if an individual concerned is not able to get elected to the Legislature within the grace period of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
