TMI Blog2016 (7) TMI 1150X X X X Extracts X X X X X X X X Extracts X X X X ..... on where the original assessment and any scope by the Commissioner to revise the tax in terms of subsection (1) of section 35 has long pass, been barred by limitation, would expose the provision to vulnerability on the ground of virus. There is yet another strong reason why we cannot upheld the action of the respondent authorities. Clause( a) of subsection (8A) which empowers the prescribed authority to collect tax when it is found that tax has been evaded or sought to be evaded or tax liability has not been disclosed correctly or excess tax has been claimed, the same can be done during the course of any proceedings if the prescribed authority is so satisfied. The pendency of proceedings therefore, would be sinequanon for exercise of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Tax Officer, Jamnagar, issued a show cause notice to the petitioner company, why for the period between 01.04.2006 to 28.04.2006 instead of collecting tax at the rate of 4%, the same should not be charged at 12.5% with interest and penalty. In the notice, it was conveyed that the Government notification granting exemption from tax on excess of 4%, was issued only on 24.09.2016 and that therefore, till then, the tax had to be paid at the normal rate. Notice also suggested that the item in question was covered in the residuary clause. 3. The petitioner opposed such proposals by raising objections under letter dated 23.02.2016 and raised several legal contentions. It was contended that the assessment was over long back. The same cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation was correctly accepted under Entry 6 and would not fall within the residuary clause. 6. On the other hand, learned AGP Shri Vora opposed the petition contending that subsection (8A) of section 34 empowers the prescribed authority with ample powers to levy tax when it is found that the tax has been evaded. The legislature has not laid down any time limit for exercise of such power. The assessment of the petitioner was under scrutiny of the audit party. During such examination, it was noticed that the petitioner was wrongly given benefit of the reduced VAT at 4% when the exemption notification issued by the Government was effective from 29.04.2006 only. 7. Section 32 of the VAT Act pertains to return, scrutiny and provisional ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding in an incorrect manner, any transaction of sale or purchase, or that any claim has been incorrectly made, then in such a case notwithstanding any notice for assessment has been issued under other provisions of this section or any other section of this Act. The prescribed authority may, after giving such dealer a reasonable opportunity of being heard, initiate assessment of the dealer in respect of such transaction or claim: Provided that where such proceedings are under section 73 or section 75, the prescribed authority shall transfer the proceedings relating to such transaction or claim directing the concerned assessing authority to assess the dealer in respect of such transaction or claim: Provided further that the prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cribed authority , the said authority , such authority and any authority shall mean, the Commissioner or, as the case may be, the authorities appointed under section 16 and other officers or persons to whom the Commissioner has delegated his power in this behalf. ] 9. Section 35 pertains to turn over escaping assessment. Subsection (1) thereof provides that where after a dealer has been assessed under sections 32, 33, or 34 for any year or part thereof, the Commissioner has reason to believe that whole or any part of the taxable turnover in respect of any period has escaped assessment or has been under assessed or has been assessed at the lower rate or wrongly been allowed in deduction or wrongly allowed a credit, the Commissioner m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assed as provided under subsection (2) of section 35 only within five years from the end of the year in which such tax liability arose. 12. When the petitioner's assessment thus became final and by efflux of time, even exercise of powers by the Commissioner under section 35(1) became barred by limitation, subsection (8A) was not even yet introduced in the statute book. We have serious doubt whether this provision could be applied to the periods prior to the date when the provision was enacted. However, at any rate, to apply to such a situation where the original assessment and any scope by the Commissioner to revise the tax in terms of subsection (1) of section 35 has long pass, been barred by limitation, would expose the provision t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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