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Reckitt Benckiser (India) Limited and S.K. Agencies Versus State of Uttarakhand and another

2015 (7) TMI 1107 - UTTARAKHAND HIGH COURT

Validity of assessment order and challenge to the notification - By notification period of limitation for making assessment order extended - extraordinary circumstances - Alternative appellate remedy - Uttarakhand Value Added Tax, Act 2005 - According to the petitioner, the issue relating to the validity of the notification cannot be canvassed before the alternate forum.

Held that:- the learned Single Judge was in error in relegating the appellants to the alternate forum in regard to .....

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te at which goods are to be taxed, there are certainly matters which can be gone into by the statutory authorities in our view. No doubt, this is subject to the view that we would take on the validity of the notification.

If the Court views the matter in the context of the State of Uttarakhand having been born on 09.11.2000, with the obvious teething problems a new State would be confronted with which includes shortage of staff, number of cases to be dealt with, we cannot hold that it .....

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14 - Dated:- 6-7-2015 - K.M. Joseph and V.K. Bist, JJ. Mr. R. Jawahar Lal, Advocate with Mr. Ramji Srivastava, Advocate for the appellants. Mr. A.S. Rawat, Additional Advocate General with Mr. Raveendra Singh Bisht, Brief Holder for the State. JUDGMENT Appellants are the writ petitioners. The writ petitions, four in number, raise common issues. Hence, they are being disposed of by a common judgment. 2. The assessments were completed under the Uttarakhand Value Added Tax, Act 2005 (hereinafter re .....

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relegated the appellants to the alternate forum. Feeling aggrieved, they are before us. 5. We heard the learned counsel for the appellants and also the learned Additional Advocate General for the State. 6. The learned counsel for the appellants would assail the judgment of the learned Single Judge pointing out that the learned Single Judge was in error in finding that the issues, which are raised, can be taken up before the alternate forum. He points out that by virtue of the notification issue .....

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s to the rate at which the taxes are to be imposed on the products of the appellants. 7. Learned counsel for the appellants limited his submissions to the issue relating to the validity of the notification and, therefore, we are not called upon to decide the other issue, namely, the issue relating to the rate at which the products are to be taxed. 8. Expatiating on his contention that the impugned notification has no legs to stand on, learned counsel for the appellants would submit that there we .....

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o complete assessment or reassessment in any case or class of cases within the time prescribed under this section, it may , by notification in the Gazette extend the time limit prescribed under this section for making assessment or reassessment in such a case or class of cases. 9. Learned counsel for the appellants would contend that while there is no requirement that reasons must be provided in the notification; reasons must undoubtedly be given and in this case no reasons were given. After the .....

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sment Year 2007‐08 were decided by the cases pertains to the Assessment Year 2008‐09 could not be decided upto 31.03.2012, consequently vide notification dated 27.09.2012 the time for assessment was extended upto 30.09.2012, which was further extended till 30.11.2012, so it is not possible to decide the cases pertains to the Assessment Year 2009‐10 till 31.03.2013, therefore, the same may be extended for one year. The copy of letter dated 04.02.2013 submitted by the Joint Commi .....

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ch cannot be decided till 31.03.2013. Furthermore due to waving off the check post of Commercial Tax from 01.03.2013 and also due to shortage of Officers, the cases pertains to the Financial Year 2009‐10 cannot be decided within prescribed time, therefore, the same may be extended for one year. The copy of letter dated 06.02.2013 and 07.02.2013 submitted by the Commissioner, Commercial Tax, Uttarakhand are being filed herewith and marked as Annexure No.2 (Colly) to this affidavit. 5. That .....

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, therefore the time to decide the same my be extended for further period of one year. 6. That in view of the facts and circumstances stated above the State Government vide notification dated 07.03.2013 had extended the statutory period of limitation pertain to the Assessment Year 2009‐10 upto 31.03.2014. The copy of the notification dated 07.03.2013 issued by the State Government is being filed herewith and marked as Annexure No. 3 to this affidavit. 7. That since the assessment order was .....

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llants would submit that a perusal of the reasons which have been disclosed in the affidavit clearly do not suffice to make out a case for exercising powers issued under sub‐section (12) of Section 32 of the Act, be it administrative or a species of subordinate legislation. The requirement of law has not been met in this case as clearly no extraordinary circumstances existed. He would submit that as per the actual date under law, the assessment should have been completed for the Assessment .....

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ended in terms of the statute after the expiry of three years on 31.03.2014, whereas the date of the order of the assessment is 31.05.2014. 12. Learned counsel for the appellants would also point out that for the year 2008‐09, respondent no. 2 issued an ex parte assessment order on 30.11.2012. Thereafter, the appellant filed an application for re‐opening on the ground that no show cause notice was served; respondent no. 2 withdrew the ex parte order and passed assessment order on 26. .....

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2008‐09. It is pointed out that the period of limitation is three years. It is submitted that monthly returns are filed which are gone into by the authorities and by the end of the year the annual returns are filed and the work is essentially ministerial and it is too much to say that there were extraordinary circumstances. It is submitted further that, in fact, since formation of the State on 09.11.2000, from 2001 onwards the power has been exercised under sub‐ section (12) of Sect .....

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11, it is submitted that no reasons are given. Learned counsel for the appellants would point out that the words extraordinary circumstances have been referred to in Black s Law Dictionary (Seventh Edition 1999; Bryan A. Garner; West Group; Page 236) and it is stated as follows:‐ Extraordinary circumstances. A highly unusual set of facts that are not commonly associated with a particular thing or event. 14. Learned counsel also refers to P. Ramanatha Aiyar s Advanced Law Lexicon (Third Edi .....

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xtraordinary pressing need for immediate federal equitable relief, not merely in the sense of presenting a highly unusual factual situation. Kugler v. Halfanit, NJ 421 US 117, 95 S. Ct. 1524, 1531, 44 L.Ed. 2d 15. 15. We may also incidentally notice the reference given of the word extraordinarily as also extraordinary in the Dictionary of P. Ramanatha Aiyar s Advanced Law Lexicon (Third Edition; 2005; Volume 2 Page 1744). The same is as follows :‐ Extraordinarily. It was dangerous and extr .....

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xtraordinary jurisdiction of High Court. The word does not mean what has never been previously heard of, or within former experience, but only what is beyond the ordinary, usual or common. (The Titania 19 Feb. 101, 105). Outside the usual or ordinary. [S. 57(e), T.P. Act (4 of 1882)]. Describing additional items, expenditure, etc. acquired or incurred in addition to normal business. (Banking) EXTRAORDINAY, REMARKABLE, are epithets both opposed to the ordinary, but things may be extraordinary whi .....

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aordinary circumstances in P. Ramanatha Aiyars book, we also refer the words extenuating circumstances explained in the said dictionary as follows:‐ Extenuating Circumstances. Such as render a delict or crime less aggravates, heinous, or reprehensible than it would otherwise be, or tend to palliate or lessen its guilt. Such circumstances may ordinarily be shown in order to reduce the punishment or damages. In contract law, unusual or extraordinary events that prevent performance within spe .....

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Government. Explanation.‐ For the purpose of this section, the expression extraordinary circumstances means circumstances arising out of threat to security of the State, public order or a natural calamity or such other circumstances arising in the public interest. (2) The Appropriate Commission may offset the adverse financial impact of the directions referred to in sub‐section (1) on any generating company in such manner as it considers appropriate. 18. Learned counsel for the appe .....

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ordinate legislation can be challenged under any of the following grounds: (a) Lack of legislative competence to make the subordinate legislation. (b)Violation of fundamental rights guaranteed under the Constitution. (c) Violation of any provision of the constitution. (d) Failure to conform to the statute under which it is made or exceeding the limits of authority conferred by the enabling act. (e) Repugnancy to the laws of the land, that is, any enactment. (f) Manifest arbitrariness/ unreasonab .....

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n, of course, the task of the court is simple and easy. But where the contention is that the inconsistency or non‐conformity of the rule is not with reference to any specific provision of the enabling Act, but with the object and scheme of the parent Act, the court should proceed with caution before declaring invalidity. 19. Per contra, the learned Additional Advocate General would submit that there were indeed extraordinary circumstances. He would submit that there was shortage of staff. .....

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sons which have been given, there is no basis for the challenge to the notification. 20. We are of the view that the learned Single Judge was in error in relegating the appellants to the alternate forum in regard to the prayer to quash the notification. We are of the view that the appellate forum constituted under the Act and the further statutory authorities could not have possibly sat in judgment over the legality of the notification issued by the State. To that extent, we would think that the .....

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ink that the notification, which has been issued under sub‐section (12) of Section 32 of the Act, is a species of subordinate legislation. The principles on which the validity of subordinate legislation can be questioned, has already been adverted to. The question which pointedly, therefore, arises for our consideration on the basis of submissions made is what is the import of the words extraordinary circumstances . If there was no extraordinary circumstance, there will be no basis for the .....

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to extend the period of limitation. On the one hand, it is the requirement of law that assessments are completed at the earliest and, at any rate, within the normal period which is fixed. Whether, it is from the view point of the assessee or from the view point of the revenue, it is imperative that assessments are completed at the earliest. As far as the interest of the revenue is concerned, it is of paramount importance for the upkeep of the State that the State is able to expend money for vari .....

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b‐section (12) of Section 32 of the Act has been enacted; that is to say, the lawgiver foresaw situations, where assessments could not be completed within the stipulated period. It would be clearly opposed to public interest, if for reasons which are extraordinary assessments become barred and the recovery of public revenue also consequently become impermissible. It is in the context of this situation that we must appreciate the import of the words extraordinary circumstances under subR .....

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eyond the ordinary, usual or common. No doubt, under the heading extraordinary circumstances what is stated is factors of time, place, etc., which are not usually associated with a particular thing or event. Therefore, we would think it that extraordinary would be something which is not usual, but it need not be something which is completely unheard of or beyond the scope of the previous experience of society. In the conspectus of this appreciation of the words extraordinary circumstances , we m .....

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vious year, namely, 2007‐08 stood extended till November 2011. The appellants are obviously not concerned with the Assessment Year 2007‐08. We are not called upon to pronounce on the validity of the notification extending the period in regard to the Assessment Year 2007‐08. But what is important is the circumstance that we must proceed on the basis that there were indeed extraordinary circumstances which justified the extension of the period of the limitation for the Assessment .....

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ary, as we have already noted, must be read in the context. There is a case for the State, as advanced to the arguments of the learned Additional Advocate General, that the State inherited 30 officers and there were shortage of officers; apparently that necessitated the extension granted for the year 2007‐08. Therefore, in the matter of completing the assessment for realizing the tax lawfully due, the authority decided to exercise its power and extend the period for the year 2008‐09, .....

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rd to the earlier year if the power is exercised; we would refrain from sitting in judgment over the same and holding that there were no extraordinary circumstances. 23. As far as Assessment Year 2009‐2010 goes, it is stated that there was also the election of the local bodies. No doubt learned counsel for the appellants would submit that the election cannot be pointed out as a reason in respect of the Assessment Year 2009‐10, as the assessment need be completed only within a period .....

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ers. We also notice that there is a case that the Joint Commissioner, requested the Commissioner, Commercial Tax, by the letter dated 14.02.2013 that due to state‐wide strike of the employees against the reservation policy, abolition of check posts and due to the Computer Module training of the employees, the cases pertaining to Assessment Year 2009‐10 could not be decided by 31.03.2013, and, therefore, the period was extended. We notice the fairly staggering amount of cases, as also .....

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