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2015 (7) TMI 1038 - PUNJAB & HARYANA HIGH COURT

2015 (7) TMI 1038 - PUNJAB & HARYANA HIGH COURT - TMI - Review of order - Whether on the facts and circumstances of the case, it was a case fit for revision under Section 40 of the Haryana General Sales Tax Act, 1973 or a case fit for reassessment under Section 31 of the said Act - Held that:- Tribunal construed the assessment order in detail and came to a positive finding that the assessment order was passed on account of a mistake of law and that the Assessing Authority had, in fact, considere .....

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or instance, as we noted earlier, the assessment order was passed pursuant to the notice issued under Section 28(2) on account of the Assessing Authority not being satisfied with the returned sale version. Pursuant thereto, the appellant produced the account books and other relevant documents. The order expressly states that the same had been "examined in detail and found to be maintained in normal course of business". The issue, therefore, did not escape the Assessing Authority. The balance-she .....

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Mr Rohit Gupta, Adv. For the Respondent : Ms Mamta Singla Talawar, AAG JUDGMENT S J Vazifdar, Acting Chief Justice 1. This is an appeal under Section 36 of the Haryana Value Added Tax Act, 2003, against the order of the Special Bench of the Haryana Tax Tribunal dated 17.11.2009. The Special Bench was constituted as the members of the Division Bench had differed on the question as to whether the revisional authority had jurisdiction under Section 40 of the Haryana General Sales Tax Act, 1973 (her .....

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me into his possession, the assessing authority discovers that the turnover of the business of a dealer has been under assessed, or has escaped assessment in any year, the assessing authority may, at any time within three years from the date of final assessment order and after giving the dealer a reasonable opportunity, in the prescribed manner, of being heard, proceed to reassess the tax payable on the turnover which has been under assessed or has escaped assessment." "40. Revision- ( .....

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ter the expiry of a period of five years from the date of the order: Provided further that the aforesaid limitation of period shall not apply where the order in a similar case is revised as a result of the decision of the Tribunal or any court of law: Provided further that the assessee or any other person shall have no right to invoke the revisional powers under this sub-section. (2) The State Government may, by notification, confer on any officer the powers of the Commissioner under sub-section .....

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General Sales Tax Act, 1973 or a case fit for reassessment under Section 31 of the said Act." 4. The appellant carries on business inter alia of the export of medicines. The appellant returned an aggregate turn over of about ₹ 7.25 crores for the year 1998-99 in the quarterly returns filed with the Assessing Authority. At the time of assessment, the assessee contended that its true turnover as per books of accounts was only ₹ 4.94 crores. The appellant furnished the balance-shee .....

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s returns assessing the gross turnover to be towards export out of India and accordingly had not deposited any tax. The order further states as follows. Being not satisfied with the returned sale version, a statutory notice was issued under Section 28(2) of the HGST Act. In response to the notice, the appellant produced the books of accounts and other relevant documents. It is important to note that the order expressly states that these books and relevant documents had been examined in detail an .....

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The case was filed with a 'nil' demand as the Assessing Officer found the gross turnover to be almost entirely in respect of the exports. A similar order was passed by the Assessing Authority under the Central Sales Tax Act, 1956. The order records that after allowing for the export claim no taxable turnover was left for the purpose of assessment and the case was filed ending in 'nil' demand. 5. This brings us to the disputed action initiated and taken by the Deputy Excise Taxat .....

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th ₹ 53,05,167/- has escaped assessment as per information and ₹ 2278165 as per balance sheet." The notice stated that the assessment order, therefore, needed to be revised. By the notice, the appellant was given an opportunity to explain as to why the order be not revised. 6. The appellant filed a reply to the above notice. For the purpose of this appeal, it is necessary only to note the appellant's contention that the revisional authority had no jurisdiction to invoke the .....

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l. As we mentioned earlier, the members of the Division Bench of the Tribunal differed on the question as to whether the jurisdiction under Section 40 was rightly invoked or not. The matter was, therefore, referred to a special bench, which answered the question in the affirmative. 9. As noted by the Tribunal, when the assessment order was passed, it was a contentious issue. The DEPB was held to be goods by a Division Bench judgment of the Delhi High Court dated 24.07.2001 in Philco Exports vs. .....

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998-99 on 18.05.2000 and for 1999-2000 on 27.4.2001 and for 2000-01 on 10.06.2002. The assessment orders in respect of the first two years were passed even before the judgment of the Delhi High Court. The Tribunal noted that while passing the assessment order dated 10.6.2002 for the assessment year 2000-01, the Assessing Officer had obviously not noted the above judgments. On merits, it was admitted that in view of the judgment of the Supreme Court, which we will shortly refer to, the appellant .....

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ax Cases 18 (P&H). The Division Bench held:- "8. A conjoint reading of the provisions quoted above shows that while section 31 speaks of reassessment of tax, section 40 provides for revision. Under section 31, the Assessing Authority can reassess the tax payable on the turnover which has been underassessed or has escaped assessment. This power can be exercised within three years from the date of finalisation of assessment and subject to the giving of notice and reasonable opportunity of .....

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of power under this sub-section is five years from the date of the order. Sub-section (2) of section 40 empowers the State Government to issue notification conferring on any officer the powers of the Commissioner under sub-section (1). Sub-section (3) of section 40 represents embodiment of the rule of hearing. It provides that no order under section 40 can be passed adversely affecting any person unless such person is given a reasonable opportunity of being heard. 9. The above analysis of secti .....

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d of pending as well as decided cases to satisfy himself as to the legality and/or propriety of any proceedings or of any order and then pass appropriate order. In our opinion, the use of different phraseology in the two sections is clearly indicative of the Legislature's intention to confer powers upon different authorities to deal with different situation and, therefore, the power exercisable by one authority cannot be exercised by another authority. In other words, the power vested in the .....

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ground alone the impugned orders are liable to be quashed. ……. ……. …….. ……… 13. In Bidar Sahakar Sakkare Karkhane Ltd. v. State of Karnataka [1985] 58 STC 65, a division the Bench of Karnataka High Court interpreted sections 12-A and 21(2) of the Karnataka Sales Tax Act, 1957 and held as under: "The revisional power cannot be exercised in respect of a matter which falls within the power to reassess escaped turnover. The revisin .....

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by the assessing authority in respect of a part of the turnover, then it must be deemed to have escaped assessment. It would therefore be a clear case falling within the exclusive jurisdiction of the assessing authority for reassessment, no matter whether that part of the turnover was in or outside the record of assessment. If, on the other hand, the assessing authority has applied his mind and erroneously excluded any part of the turnover, then certainly it would be a case for the revisional au .....

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ng in the purchase turnover, the harvesting charges incurred by the assessee. Held, that since the assessing authority did not apply his mind to the disputed turnover, the revising authority could not have invoked the powers under section 21(2) of the Act." The argument of Shri Jaswant Singh that the expression "legality or propriety" used in section 40(1) of the Act should be liberally construed so as to include a case of escaped assessment sounds attractive but having regard to .....

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expression "legality or propriety" would take within its folds all types of illegalities and improprieties which may have crept in the proceedings pending before the Assessing Authority or which may have affected the final adjudication, but it cannot take within its sweep, the cases of escaped assessment because in such cases there is no assessment/adjudication by the Assessing Authority or Appellate Authority." Mr. Gupta also relied upon the notice in that case, which was extract .....

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