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Shalimar Chemical Works Limited Versus The State of Assam And Others

2015 (4) TMI 170 - GAUHATI HIGH COURT

Classification of goods - Classification of shalimar oil - Oil partly used as edible oil partly as hair oil - Rate of tax @ 12% or 4% - Bar of limitation - Held that:- no assessment could be made under section 17 of the AGST Act after expiry of 3 years from the end of the year in respect of which or part of which the assessment is made. In other words, under section 19(1) of the AGST Act, for the assessment year 1999-2000, the limitation period would expire on 31.03.2003 and for the assessment y .....

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re is another aspect. Limitation period prescribed for completion of assessment or re-assessment is for a definite purpose. An assessee cannot be subjected to assessment or re-assessment proceeding for an indefinite period. If the contention of the respondents, as advanced, is accepted, it would lead to a situation where an Assessing Officer would have the liberty to seek clarification from the Commissioner in the garb of reference thereby extending the limitation for framing assessment for an i .....

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eriod of limitation and are accordingly adjudged void ab initio. Consequently, those are set aside and quashed. - Decided in favour of assessee. - WP(C) No. 708 of 2009, WP(C) No. 709 of 2009 - Dated:- 4-3-2015 - Hon ble The Chief Justice (ACTG.) And Ujjal Bhuyan,JJ. For the Petitioner : Dr. Ashok Saraf, Sr. Advocate. Mr. D Baruah, Advocate. Mr. S Chetia, Advocate. Mr. A Goyal, Advocate. For the Respondents : Mr. D. Saikia, Sr. Advocate. Mr. S Saikia, SC, Finance (Taxation). Date of Judgment : J .....

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ction of books of accounts etc. for purpose of assessment for the assessment years under consideration. WP(C) No. 708/2009 is concerned with the assessment year 1999-2000 and WP(C) No.709/2009 is concerned with the assessment year 2000-2001. 03. Since both the writ petitions are identical, for the sake of convenience, facts of WP(C) No.708/2009 are briefly referred to hereunder. 04. Petitioner is a company incorporated under the provisions of the Companies Act, 1956, having its registered office .....

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by it, is suitable for consumption and is certified as an edible grade oil. Petitioner submitted representation before respondent No. 2 on 11.04.2000, seeking clarification regarding taxability on coconut oil, since it is partly used as edible oil and partly used as hail oil. Request was made to the respondent No. 2 to treat it as an edible oil for the purpose of taxation under the AGST Act. This was followed by reminder dated 27.02.2001. 06. However, a notice dated 28.02.2001 was issued to the .....

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be levied. 07. At that stage, petitioner moved this Court by filing WP(C) No.1989/2001, which was disposed of vide order dated 23.03.2001 by directing the respondents, particularly, respondent Nos. 2 & 3 of the present petition, to dispose of the representation submitted by the petitioner after giving an opportunity of hearing. It was further held that after the decision was taken about exigibility of the item to taxation, the authority should proceed as per such decision and in accordance w .....

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te is not used for cooking and hence should not be treated as edible oil as it is mainly used as hair oil; therefore, it is taxable at the rate of 12.5% under 5th Schedule of the Assam Value Added Tax Act, 2003. 10. Following the same, notice dated 16.11.2007 was issued by the respondent No. 3 to the petitioner for depositing tax at the rate of 12.5% on sales of coconut oil instead of 4%. The above notice was in respect of assessment for the periods 2005-2006 and 2006-2007. Petitioner then filed .....

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, documents and evidence in support of the return submitted in respect of the assessment years 1999-2000, 2000-2001 and 2001-2002. It was stated that in case of non-compliance, summary assessment would be carried out. 12. Petitioner submitted reply dated 17.02.2009 contending that the notice issued for the years 1999-2000 and 2000-2001 was without jurisdiction being barred by limitation. It was pointed out that under section 19 of the AGST Act, no assessment could be made after expiry of 3 years .....

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P(C) No. 1989/2001. Respondent No.2 vide his clarification dated 21.11.2006 clarified that Shalimar Coconut Oil should be treated as hair oil for the purpose of levying tax under Entry No. 22 of Schedule-II of the AGST Act. Referring to section 19(3) of the AGST Act, it was stated that notwithstanding anything contained in sub-section (1) or sub-section (2) of section 19, an assessment, re-assessment or re-computation to give effect to any order or direction in appeal, revision or reference may .....

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st judgment assessment would be made under section 17(5) of the AGST Act, read with section 108 of the Assam Value Added Tax Act, 2003. 14. It was at this stage that the present two writ petitions came to be filed by the petitioner. 15. This Court by order dated 20.02.2009 issued notice and passed an interim order suspending the impugned notices dated 10.02.2009 and 17.02.2009. 16. Respondent No. 2 has filed affidavit. Referring to the sequence of events which ultimately led to issuance of the n .....

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ht to expire on 31.03.2009 i.e. 2 years from the end of the year in which the reference order was communicated to the Assessing Officer i.e., 2 years from 31.03.2007. Reference has also been made to section 73A of the AGST Act to contend that under the AGST Act, the Commissioner was empowered to determine certain disputes. Therefore, it is contended that submission of petitioner that the impugned notices are time barred is clearly unsustainable and the writ petitions should be dismissed. 17. In .....

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to first refer to the relevant documents placed on record. 21. From the clarification of respondent No. 2, dated 21.11.2006, addressed to the respondent No. 3, it is seen that the said clarification was issued on the letter of respondent No. 3, dated 17.03.2003. It was clarified by respondent No. 2 that coconut oil is generally used in the State of Assam as hair oil and, therefore, Shalimar Coconut Oil would be treated as hair oil for the purpose of levying tax under Entry No. 22 of Schedule-II .....

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n parlance Coconut Oil , it is clarified that the item Shalimar Coconut Oil will be treated as Hair Oil , for the purpose of levying tax under entry at Sl. No. 22 of Schedule-II of the Assam General Sales Tax Act, 1993. Commissioner of Taxes (i/c), Assam, Dispur, Guwahati-6. 22. This was followed by the impugned notice dated 10.02.2009 asking the petitioner to produce books of accounts, documents and evidence in support of the returns filed for the three assessment years. When the petitioner fil .....

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t a reference was made to the Commissioner of Taxes, Assam vide this office No. 6047 dated 28.02.2003 to clarify as to rate of taxes on coconut oil alongwith the copy of judgment of Hon ble Gauhati High Court in WP(C) No.1989/2001 (M/s. Shalimar Chemical Works Ltd. Vs. The State of Assam & Ors.). The Commissioner of Taxes, Assam vide his clarification communicated to this office under Memo No. CTCA-51/ 2001/(71)/23 dated 21.11.2006 clarified that Shalimar Coconut Oil should be treated as hai .....

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f two years from the end of the year in which the order in appeal, revision or reference is communicated to the Assessing Officer. Since the Commissioner of Taxes, Assam order was communicated to this office on 21st Nov, 2006, the assessment for the year 1999-2000, 2000-01 & 2001-02 will become time barred on 31.03.2009. So, you are hereby asked to produce books of accounts of the above mentioned years on or before 26.02.2009 failing which the assessment would be done u/s 17(5) of AGST Act, .....

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icer. Since the reference order was communicated on 21.11.2006, the assessment would become time barred on 31.03.2009 i.e., 2 years from the end of the year in which the reference order was communicated which was 31.03.2007. Though there is some discrepancy regarding the date of the letter of respondent No. 3 to respondent No.2 seeking clarification - in the clarification of respondent No. 2 dated 21.11.2006 the date of the letter is given as 17.03.2003 whereas in the impugned notice the date of .....

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d of the year in respect of which or part of which the assessment is made or, in a case where the dealer has furnished a return or a revised return under sub-section (4) of section 16 after the expiry of two years (from the end of the year) in which such return or revised return is received by the Assessing Officer, whichever is later: Provided that in a case under sub-section (6) of section 17, the assessment may be made at any time before the expiry of eight years from the end of the year in r .....

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sment or re-computation to give effect to any order or direction in appeal, revision or reference, may be made at any time before the expiry of two years from the end of the year in which the order in appeal, revision or reference is communicated to the Assessing Officer. Explanation : In computing the period of limitation for the purposes of sub-section (1) or sub-section (2), the period during which the assessment proceeding is stayed by an order or injunction of any court or other authority, .....

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on period would expire on 31.03.2003 and for the assessment year 2000-2001, the limitation period would expire on 31.03.2004. It is not necessary to delve into the other part of sub-section (1) or the proviso thereto or sub-section (2), since no defence has been put up by the respondents on the basis of the said provisions. We may now deal with sub-section (3) of section 19. As per sub-section (3), the limitation period of 3 years under section 19(1) would stand extended by a period of 2 years t .....

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would continue upto 31.03.2009. Therefore, it is contended that the two impugned notices dated 10.02.2009 and 17.02.2009 are within the period of limitation. 26. Before we examine the contention of the respondents as to whether the letter written by respondent No. 3 to the respondent No. 2, whether on 28.02.2003 or on 17.03.2003, seeking clarification regarding taxability of coconut oil and the clarification given by respondent No.2 on 21.11.2006 can be treated to be a reference within the meani .....

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in which case, mere initiating proceeding is not enough, but final order has to be passed within the prescribed time. Therefore, the assessment has to be completed within the limitation period subject of course to any stay order of Court or other authority in which case the Explanation to Section 19 will come into play. 27. If we go through the provisions of the AGST Act, we find that Chapter-VIII thereof deals with appeal, revision, determination and rectification. Section 33 provides for fili .....

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rs of the Commissioner to issue orders, instructions, directions and clarifications not inconsistent with the provisions of the AGST Act for the purpose of bringing about uniformity in the classification of goods, if it is considered necessary or expedient. Thus, under the AGST Act, there is statutory provision for appeal and revision. But there is no such provision for reference. Can an internal letter of an Assessing Officer to the Commissioner seeking clarification on exigibility of a good to .....

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ode, section 113 read with Order 43 thereof, provides for reference to the High Court. By invoking this provision, a Sub-ordinate Court may make a reference to the High Court for its opinion. The essential conditions for making a reference under section 113, which may not be necessary to be gone into in the present proceeding, has been set out in section 113 itself. Therefore, a Sub-ordinate Civil Court gets the jurisdiction to make a reference to the High Court under section 113 read with Order .....

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reference to the High Court on any question of law arising out of the order of the Tribunal. On refusal by the Tribunal to make such a reference, the assessee or the Commissioner could approach the High Court under sub-section (2) to require the Tribunal to make a reference. Thus the Income Tax Act, 1961 recognised separate provisions of appeal, revision and reference. In fact, most statutes dealing with revenue matters provide for reference to be made to higher authorities, including to the Hi .....

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rious aspects of compensation. Therefore, procedural law recognises the separateness of these jurisdictions - appellate jurisdiction, revisional jurisdiction, review jurisdiction and reference jurisdiction. There is clear distinction between each of the above jurisdictions. Without delving into the contours of the respective jurisdictions, it can safely be said that each of these jurisdictions operate in separate and distinct spheres. But despite the distinctiveness of each of the above jurisdic .....

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