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STATE OF GUJARAT Versus MODI OIL INDUSTRIES

2016 (7) TMI 439 - GUJARAT HIGH COURT

Validity of assessment order - period of limitation - Section 41(3) of the Gujarat Sales Tax Act, 1969 - Held that:- it is clear that this court has already answered the said question of law by way of Sales Tax Reference No. 2 of 2004. This Court has held that it cannot be said that merely because a mode was undertaken under Section 41(7) of the Act, the limitation provided under Section 42(1) of the Act for completing the assessment would not be applicable. The reference is therefore required t .....

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tor Engineering Products. 2. The applicant - State of Gujarat under Section 69 of the Gujarat Sales Tax Act, 1969 made an application before the Tribunal to refer to this Court a question of law arising out of Tribunal s judgement and order dated 24.11.1993 in Second Appeal Nos. 304 to 307 of 1990 and 227 of 1991. Accordingly, a statement of case was drawn on 17.02.1995 referring the following question of law by way of Reference Application No. 11 of 1995: Whether on the facts and in the circums .....

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he Sales Tax Officer issued a notice in Form 36 and passed assessment order on 31.03.1990 imposing tax as applicable to entry 13 in Schedule III to the Act on sales of Paver Machine. Accordingly an extra demand of tax in addition to the tax paid with the return was raised. Interest was also imposed by the assessing officer. Being aggrieved by the said order an appeal was filed before the Assistant Commissioner of Sales Tax who confirmed the order of the assessment passed by Sales Tax Officer. Th .....

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ion 41(3) of the Act read with Section 42(1) of the Act. He submitted that the service of notice is a procedural requirement and that the Tribunal has erred in setting aside the notice. 5. Learned advocate appearing for respondent supported the impugned order and submitted that the same having been passed in accordance with law does not call for any interference by this Court. 6. Having heard learned advocates for both the sides we are of the opinion that identical issue came for consideration b .....

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pplication by any such dealer to that effect, for such period exceeding one year during which he is so liable as is specified in the application ; Provided that when such dealer fails to furnish any declaration or return relating to any period of any year by the prescribed date, the Commissioner may, if he thinks fit, assess the tax due from such dealer separately for different parts of such year. Provided further that the Commissioner may, subject so such conditions as may be prescribed, and fo .....

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e the presence of the dealer or the production of further evidence; he shall serve on such dealer in the prescribed manner a notice requiring him on a date and at a place specified therein, either to attend and produce or cause to be produced all evidence on which such dealer relies in support of his declarations or returns, or to produce such evidence as is specified in the notice. On the date specified in the notice, or as soon as may be thereafter, the Commissioner shall, after considering al .....

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t to year referred to in clause (a). the dealer shall be deemed to have been assessed on the basis of and for the year for which quarterly returns or, as the case may be, annual return is furnished by the dealer. Provided further that nothing in the preceding proviso shall apply - (a) to a dealer whose turnover of purchases or turnover of specified sales or turnover of sales during a year exceeds [ten lakhs] rupees or the tax payable in respect of that year exceeds 3 [ten thousand rupees; (b) to .....

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nditions as may be prescribed, including those relating to condonation of delay in payment of tax or filing of return, allow the deemed assessment in respect of such a dealer]. (4) If a dealer fails to comply with the terms of any notice issued under subsection (3), the Commissioner shall assess, to the best of his judgment, the amount of tax due from him. (5) If a dealer does not furnish declarations or returns in respect of any period, by prescribed date, the Commissioner shall, after giving t .....

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from the dealer in respect of such period, any any period subsequent thereto. (7) Notwithstanding anything contained in this section, if a dealer liable to pay tax has not employed regularly any method of accounting or if in the opinion of the Commissioner, assessment cannot be made properly on the basis of the accounts maintained by a dealer, the Commissioner shall assess to the best of his judgment, the amount of tax due from such dealer. (8) Any assessment made under this section shall be wit .....

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ch the last monthly, quarterly or, as the case may be, annual return is filed. (2) Where the Commissioner issues a notice under sub-section (6) of section 41, to any dealer for assessment of tax in respect of any period, no order of assessment shall be made for such part of the period, if any, as is prior to - (a) a period of eight years ending on the last date of the year immediately preceding the year in which such notice is issued, in a case where the Commissioner has reason to believe that s .....

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pecified in subsection (1) : Provided further that where a fresh assessment is required to be made in pursuance of any order under section 65, 67 or 69 or in pursuance of any order of any court or authority, such fresh assessment shall be made at any time within three years from the date of such order : Provided also that in computing the period of limitation for the purpose of this section, any period by which the period of limitation is extended under the first proviso or any period during whi .....

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evidence and then may make the assessment in a case where the material is available and produced by the assessee, the assessment will be made under Section 41(3) of the Act but in a case where the dealer / assessee fails to comply with any notice issued under Subsection 3 of section 41 of the Act, the Assessing Officer may assess the amount of tax as per his best judgment. Further, in a case where the dealer has not furnished any declaration or return by the prescribed date, the Assessing Office .....

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care of by Section 41(7) of the Act. But be it recorded that principal assessment, in cases where subsection 7 of Section 41 of the Act is applied and the dealer is having registration, would be under Section 41(3) read with 41(4) of the Act if the returns are filed but the assessment may be under Section 41(5) of the Act if the returns are not filed. However, in cases where the assessee or the Dealer, has not obtained any registration as required, a separate procedure under subsection 6 of the .....

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where the dealer is registered with the Sales Tax authority, two situations are separately considered, one in a case where the return is filed but not found to be complete or correct and another in a case where the return is not at all filed or not filed within the prescribed time limit. In a case, where the registration of dealer is there, Revenue is aware about the existence of the business and, therefore, it is very convenient to enforce the provisions of the Sales Tax Act including filing of .....

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od shall be three years from the end of the year, in which last monthly or quarterly return may be filed whereas in case of proceedings under subsection 6 of Section 41, the period provided is of 8 years on the last date of the year immediately preceding year in which such notice is issued and further in any other case 4 years ending on the last date as aforesaid, barring the period during which there was stay of any competent court against the assessment. 8. As per the above referred discussion .....

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ent Pleader to contend that in a case where no annual return is filed, such would be an assessment under Section 41(7) independently for which no limitation has been provided or if considered under Section 41(6), the assessment order can be said as within the outer limit either eight years or four years as the case may be. 10. We cannot countenance the submission made by learned Assistant Government Pleader for two reasons, one is that for applying the time limit as provided under Section 42(2) .....

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sment has to be completed. The second reason is that subsection 6 of Section 41 of the Act does not include the contingency of non filing of the return, but rather the basic requirement is that the registration is not obtained or the person who has failed to apply the registration within the time prescribed. In any event as observed by us herein above, Section 41(7) is no independent mode of assessment but rather a step in furtherance to the assessment which is applicable to both type of assessm .....

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