TMI Blog2018 (2) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... submit Form-F declarations. The contention that intra-State sales were treated as inter-State sales is, therefore, not tenable. Are the assessments barred by limitation? - Held that: - The Andhra Pradesh Value Added Tax Act, 2005 came into force on 01.04.2005 and consequently, in view of Section 9(2) of the CST Act, it is the provisions of the A.P. VAT Act which is the applicable State law for the assessment year 2005-06. Section 21(4) of the AP VAT Act stipulates that the prescribed authority may, based on any information available or on any other basis, conduct a detailed scrutiny of the accounts of any dealer and where any assessment, as a result of such scrutiny, becomes necessary, such assessment shall be made within a period of four years from the end of the period for which the assessment is to be made - Even for the CST assessment year 2005-06, the assessment order was passed on 18.04.2009 well within the four year limitation period prescribed under Section 21(4) of the AP VAT Act - it is evident that the assessment orders, made for these four years, are within the period of limitation prescribed, for making assessment, both under the APGST Act and the AP VAT Act. Sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Constitution of India, as the assessing authority is entitled to pass an assessment order any time after the end of the assessment year/assessment period and before expiry of the period of limitation. Are the assessment orders void and liable to be ignored? - Held that: - As the assessment orders made under the CST Act, for the assessment years 2002-03 to 2005-06, do not bear the brand of invalidity upon its forehead, it is only if necessary proceedings are taken to challenge these orders can they be quashed. These assessment orders would remain as effective as the most impeccable of orders till then. While an order without jurisdiction can be subjected to challenge even in collateral proceedings, other orders, even if they be otherwise illegal, can only be questioned on a direct challenge thereto - the contention, that these assessment orders are liable to be ignored as a nullity, does not merit acceptance. The assessment orders would, unless and until they are declared as void by this Court, continue to remain in force. Can factual pleas, raised for the first time in the reply affidavit, be examined in writ proceedings - Held that: - the petitioner had copies of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Special Standing Counsel for Commercial Taxes (AP) ORDER: ( Per the Hon ble The Acting Chief Justice Ramesh Ranganathan ) The relief sought for, in this Writ Petition, is to declare the demand notice in Form No.IV dated 08.12.2014, for alleged arrears of Sales Tax for the years 2002-2003, 2003-2004, 2004-2005, 2005-2006, as arbitrary, illegal, unjustified and contrary to the provisions of the APGST Act, 1957. The petitioner, a proprietary concern hitherto engaged in the business of chillies, was registered as a dealer vide TIN No.28770102633. It is his case that he had paid taxes regularly till the year 2008 when the entire accounts, along with the original challans of sales tax paid by him, were gutted in the fire which broke out in Guntur Mirchi yard; he had, thereafter, discontinued his chilli business and was, as at present, not carrying on any other business; the first respondent suddenly issued a demand notice in Form No.IV on 08.12.2014 asking him to pay ₹ 1,86,84,620/- as arrears of sales tax for the years 2002-2003, 2003-2004, 2004-2005 and 2005-2006; he had, thereafter, made a representation to the 1st respondent on 22.01.2015 stating a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntil further orders. Subsequently, by its order dated 01.12.2015, a Division Bench of this Court directed that, as no one had appeared for the petitioner on 30.11.2015, the matter be listed under the caption for dismissal . As, even on 01.12.2015, neither was the Counsel for the petitioner present nor was there any representation on his behalf, the Writ Petition was dismissed for non-prosecution. Thereafter an application was filed in WPMP No.57714 of 2016 to restore W.P. No.13560 of 2015 to file by setting aside the order dated 01.12.2015. When the WPMP came up for hearing, we made it clear that we would consider the restoration application along with the main Writ Petition. We had, in our order dated 04.01.2018, recorded the submission of Sri C. Ramachandra Raju that the matter be taken up on the next date to enable him to put forth his submissions in the main Writ Petition. When the matter was listed the next day on 05.01.2018 we had, at the request of Sri C. Ramachandra Raju, Learned Counsel for the petitioner, directed the matter to be posted after Sankranthi Vacation. On 22.01.2018, both Sri C. Ramachandra Raju, Learned Counsel for the petitioner and Sri S. Suribabu, L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,68,01,990/- to tax as the F declaration Forms were not filed by the petitioner; the said show cause notice was served on the petitioner on 13.08.2005; the same was received by Sri P. Masthan Rao, accountant of the petitioner Firm; as the petitioner had not filed any objections to the said show cause notice, and had not filed the F declaration Forms, the assessing authority had passed the assessment order on 10.03.2006 confirming the proposal contained in the show cause notice; the assessment order was served on Sri P. Masthan Rao, accountant of the petitioner s firm; a show-cause notice dated 09.01.2007, for the assessment year 2003-04 under the CST Act, was served on the petitioner on 19.02.2007 proposing to subject the consignment transfer of chillies, amounting to ₹ 10,62,66,911/-, to tax in the absence of F declaration forms; as the petitioner neither filed objections, nor sought time, nor did he file the F declaration Forms, the assessing authority completed the assessment by his proceedings dated 30.03.2007; the same was served by affixture on the business premises of the petitioner on 09.04.2007, as none were available at the said premises; and the demand, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Commercial Tax Officer, which was served on the petitioner on 30.07.2014, and was also sent by registered post with acknowledgment due on 18.07.2014; the notice was received by the petitioner on 21.07.2014; he filed a letter before the Commercial Tax Officer on 07.08.2014 stating that he had closed his business, and requested twenty days time to verify the same; he also requested that copies of the assessment orders be furnished; the same were handed over to the petitioner on 12.08.2014; the statement of encumbrance, on the property of the petitioner, was obtained on 29.11.2014; thereupon the Deputy Commissioner (CT), Guntur had, by his proceedings dated 04.12.2014, authorised them to proceed against the property of the petitioner under the A.P. Revenue Recovery Act, 1864; he had issued notice of attachment of property, in Form No.IV dated 08.12.2014, under Section 25 of the Revenue Recovery Act, followed by Form No.V under Section 27 of the said Act; on 22.01.2015, the petitioner filed a letter, before the respondent, stating that he had already paid the taxes due for the same years, and all the records were gutted in the fire accident; he enclosed his profit and loss fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d was not known to him; the respondents had his residential address; had they issued the show cause notice, and passed assessment orders for the said period, the respondents would have sent the alleged show cause notices, and assessment orders, to his residential address; the respondent did not choose to send them to his residential address; they were well aware that he was not doing any business since 2008; the allegation that they had affixed the show cause notices, and the assessment orders of the said period, to his business premises was totally false; when he was not available in the business premises, as stated by the respondent, the alleged show cause notices, and the assessment orders, should have been sent to his residential address, or should have been sent by registered post to his residential address; the respondents were aware that he had closed his business in the year 2008; the allegation that some of the show cause notices, and assessment orders, were affixed to his business premises were false and unbelievable; the very fact that the respondents did not choose to send the alleged show cause notices and assessment orders to his residential address, proved beyond dou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears 2002-03 to 2005-06 and, as such, he is not liable to pay central sales tax for those years; he had only sent consignments to other States, to be delivered to his agents, during the years 2002-03 to 2005-06, which is not inter-State sale under Section 6-A of the CST Act; the respondents were claiming central sales tax from the petitioner in respect of sales within the State for which, admittedly, the petitioner had already paid sales tax under the APGST Act; and treating sales within the State as inter-State sales, on the sole ground that the petitioner had not submitted Form-F declarations as required under Section 6-A of the CST Act, is illegal. While sale of goods within the State was taxable, for the assessment years 2002-03 to 2004-05, under the A.P.G.S.T. Act, and for the assessment year 2005-06 under the AP VAT Act, inter- State sale of goods i.e sale of goods from one State to another is alone taxable under the CST Act. Section 6A of the Central Sales Tax Act relates to burden of proof in case of transfer of goods claimed otherwise than by way of sale. Under sub-section (1) thereof, where any dealer claims that he is not liable to pay tax under the CST Act in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a dealer from his place of business in one State to his own place of business in another State, or from one State to his agent in another State, is not by way of sale and is, therefore, exempt from tax on fulfillment of the conditions stipulated in Section 6-A of the CST Act. As proof that the despatch of goods, from one State to another, is not by way of inter-State sale, but is either a branch transfer, or a mere consignment of goods, the dealer, who has transferred the goods, is required to submit, to his assessing authority, the declaration in Form-F. It is only if such a declaration is submitted would the dealer be entitled to claim exemption from tax, under the CST Act, on such transfer of goods. Failure to furnish the declaration in Form-F would result in such transfer of goods, from one State to another, being treated as an inter-State sale liable to tax, at the prescribed rate, under the CST Act. As is evident from the assertions in the counter-affidavit, the petitioner has been separately subjected to tax both under the APGST Act and the CST Act. The demand notice, impugned in the Writ Petition, was issued for non-payment of tax under the CST Act for the four year p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey have under the general sales tax law of the State; the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax, registration of the transferee of any business, imposition of tax liability on a person carrying on business or the transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family, to pay tax in the event of the dissolution of such firm or partition of such family, recovery of tax from third parties, appeals, reviews, revisions, references, refunds, rebates, penalties, charging or payment of interest, compounding of offences and treatment of documents furnished by a dealer as confidential, shall apply accordingly. In so far as the CST assessment orders, passed with respect to the years 2002-04 to 2004-05, are concerned it is the provisions of the State Law i.e the Andhra Pradesh General Sales Tax Act, 1957 which would apply in determining whether the assessment orders, for these years, are barred by limitation. Section 14 of the APGST Act relates to assessment of tax and under sub-section (1) thereof, if the assessing authority is satisfied that any return submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year limitation period prescribed under Section 21(4) of the AP VAT Act. From the copies of the assessment orders for the years 2002- 03 to 2005-06, filed by the respondents along with their counteraffidavit, it is evident that the assessment orders, made for these four years, are within the period of limitation prescribed, for making assessment, both under the APGST Act and the AP VAT Act. III. SHOULD THE PERIOD OF LIMITATION BE COMPUTED TILL THE DATE OF PASSING THE ASSESSMENT ORDER OR TILL THE DATE THEY ARE SERVED ON THE DEALER? Sri C. Ramachandra Raju, Learned Counsel for the petitioner, would submit that an assessment order is made and completed only after service of the assessment order on the assessee, and not merely by writing the assessment order and keeping it in the file of the assessing authority; the assessment orders were not served on the petitioner as required under law; and, in so far as the assessment orders, of the years 2002-03 and 2004-05 are concerned, even though the assessment orders are dated within the period of three years, they are also barred by limitation as they were never served on the petitioner, much less within a period of three years. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the judgments of this Court and the Apex Court, the affidavit filed in support of the Writ Petition makes no mention of the assessment orders not having been served on the petitioner, or of its having been served on him belatedly. In the absence of any such plea, in the writ affidavit, it would be wholly inappropriate for us to undertake an examination of whether or not service of the assessment orders on the petitioner was belated, as the respondents could not have rebutted these contentions, in the counter-affidavit filed by them earlier. In this context, it is necessary to note that there is a distinction between a pleading under the Code of Civil Procedure and a Writ Petition. While in a plaint, the facts and not evidence are required to be pleaded, in a Writ Petition not only the facts but also the evidence in proof of such facts have to be pleaded and annexed to it. When a point, which is ostensibly a point of law, is required to be substantiated by facts, the party raising the point, if he is the writ petitioner, must plead and prove such facts by evidence which must appear from the writ petition. If the facts are not pleaded, or the evidence in support of such facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se assessment orders were passed immediately after the end of the assessment year/assessment period, or at the fag end before expiry of the period of limitation. Since the assessing authority is empowered by law to make an assessment even at the fag end of the period of limitation, and before its expiry, the question whether he should have passed the assessment order immediately after the end of the assessment year, or at the fag end of the period of limitation, are not matters for examination in proceedings under Article 226 of the Constitution of India, as the assessing authority is entitled to pass an assessment order any time after the end of the assessment year/assessment period and before expiry of the period of limitation. Even otherwise, any explanation which the respondents could have given for not having passed the assessment orders earlier was only if any such a contention had been raised in the Writ Petition (affidavit filed in support of the Writ Petition) and, since no such contention has been urged in the Writ affidavit, this Court would not be justified in interfering with the impugned demand notice, based on such a contention urged for the first time in the reply a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Ordinarily, such an order will, in fact, be effective inter-parties until it is successfully avoided or challenged in a higher forum. Mere use of the word void is not determinative of its legal impact. The word void has a relative rather than an absolute meaning. It only conveys the idea that the order is invalid or illegal, and can be avoided. ( State of Kerala v. M.K. Kunhikannan Nambiar Manjeri Manikoth (1996) 1 SCC 435 ). The court will invalidate an order only if the right remedy is sought by the right person in the right proceedings and circumstances. ( Administrative Law , Wade and Forsyth, 8th Edn., 2000, p. 308; Vasudev Dhanjibhai Modi v. Rajabhai Abdul Rehman (1970) 1 SCC 670 ; Rafique Bibi v. Sayed Waliuddin (2004) 1 SCC 287 ; Balvant N. Viswamitra v. Yadav Sadashiv Mule (2004) 8 SCC 706 ). The only way to resist unlawful action is by recourse to the law. An order, even if not made in good faith, is still capable of legal consequences. It bears no brand of invalidity upon its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity, and to get it quashed or otherwise upset, it will remain as effective for its ost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dity of the demand notice, issued for recovery of tax determined in these assessment orders, is alone under challenge. In the absence of any challenge thereto, the contention, that these assessment orders are liable to be ignored as a nullity, does not merit acceptance. The assessment orders would, unless and until they are declared as void by this Court, continue to remain in force. VI. CAN FACTUAL PLEAS, RAISED FOR THE FIRST TIME IN THE REPLY AFFIDAVIT, BE EXAMINED IN WRIT PROCEEDINGS? Sri C. Ramachandra Raju, Learned Counsel for the petitioners, would submit that the petitioner had submitted Form- F declarations to the assessing authority, as required under Section 6-A of the CST Act, to the effect that the consignments sent by him to other States, during those years, was mere transfer of goods to his agents, without there being any inter-State sale; satisfied with the Form-F declarations submitted by the petitioner, the assessing authority did not pass any assessment orders for payment of central sales tax for those years; because of the fire accident, which took place in his business premises in the year 2008, the petitioner had closed his business to the knowledge of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled to produce any evidence to establish that he is the employee of the petitioner; and, in the absence of any such proof, service of the show-cause notices, and the assessment orders, of the year 2002-03 on Sri P. Masthan Rao is not a valid service on the petitioner in the eye of law. Sri S. Suribabu, Learned Special Standing Counsel for Commercial Taxes, would submit that the petitioner had never, at any time before filing the reply affidavit on 22.01.2018, contended that the show cause notices, and the subsequent assessment orders, were not properly served; in his letter dated 07.08.2014, the petitioner had sought twenty days time to verify, and had requested for copies of the assessment orders to be furnished to him; the same were handed over to him on 12.08.2014; even in his letter dated 22.01.2015, except stating that he had already paid the taxes due, for the years 2002-2003 to 2005-2006, the petitioner has not stated that the assessment orders were not served on him earlier or that Sri P. Masthan Rao was not known to him; and no such contention has been urged in the affidavit filed in support of the Writ Petition. The contentions that the petitioner had submitted F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment order has also been urged for the first time in the reply affidavit. Rule 54(3) of the A.P.G.S.T. Rules, 1957 stipulated that, every dealer liable to tax under the Act, shall send to the assessing authority a declaration in Form-XXIX, specifying the name or names of the person or persons who are authorized to receive notices, orders etc, on their behalf under the Act; and all notices, orders etc. received by such person or persons shall be binding on the dealer. Form-XXIX is the declaration notifying the persons authorised to receive notices, orders etc. under the A.P.G.S.T. Act and requires the name of the person, his status and relationship with the dealer and his specimen signature to be furnished in the said Form and the said Form is required to be signed by the dealer. Both the writ affidavit and the reply affidavit make no reference as to the name of the person, whom the petitioner had intimated the assessing authority, as being authorized to receive the assessment order in his behalf. In the counter-affidavit, filed on behalf of the respondents, it is stated that, in reply to the final notice issued by the Commercial Tax Officer dated 14.07.2014, the petitioner had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cable for such recovery. The contention that since the respondents are seeking to recover arrears of sales tax by way of a demand notice, eleven years after the expiry of the assessment years 2005-2006, the said demand notice is vitiated by malafides is not tenable. Neither the assessing authorities, nor any officer or employee of the Commercial Taxes Department, have been arrayed as a respondent eo nominee in the Writ Petition. As held by the Supreme Court, in State of Bihar v. P.P. Sharma AIR 1991 SC 1260 , a plea of malice can only be examined when the person, against whom malice is alleged, is arrayed as a respondent eo nominee in the writ petition and, in his absence, it would be wholly inappropriate for the Court to record any finding as to whether or not the order, impugned in the writ petition, was vitiated by malafides. This contention, regarding the assessment order being vitiated by malafides, is only to be noted to be rejected. The charge of malafide is more easily made than established. It is the last refuge of a losing litigant ( E.P. Royappa v. State of T.N (1974) 4 SCC 3 ; Gulam Mustafa v. State of Maharashtra AIR 1977 SC 448 ; Ajit Kumar Nag v. G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he alleged assessment orders were passed; inordinate delay in issuing the demand notice, non-issuance of demand notice for each year immediately after the assessment orders of each year was passed, and issuance of a single demand notice for recovery of CST for all the four years with inordinate delay, creates a strong suspicion that the assessing authority did not make the assessment orders, for the assessment years 2002-03 to 2005-06, on the dates alleged to have been made; all the four assessment orders were written by the assessing authority only in the year 2014, in which year he had issued the demand notice; all the assessment orders were ante-dated; there is no explanation for not issuing the demand notices separately for each assessment order, and for the inordinate delay of 11 years in issuing the demand notice for recovery of CST for all the four years; and, in the absence of any explanation in this regard, this Court should draw adverse inference, against the respondents, that the assessment orders were ante-dated with a malafide intention to recover time barred CST from the petitioner. Section 16(1) of the APGST Act requires the assessed tax to be paid by the dealer i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of any statutory requirement in this regard, the contention that a common demand notice, for four assessment years, cannot be issued, does not merit acceptance. It is only on an assessment being made, and the tax liability determined, can a demand be raised for payment of the assessed tax. As no demand could have been raised even without an assessment order being passed, the contention that the period of four years should be computed from the end of the assessment year, and the demand notice was issued 11 years thereafter, is not tenable. The contentions that, since the demand notice was issued in 2014 for the tax due for the assessment years 2002-03 to 2005-06, the assessment orders are ante-dated, there is no explanation for not issuing the demand notices separately for each assessment year and for the inordinate delay of 11 years in issuing the demand notice for recovery of CST, are urged for the first time in the reply affidavit dated 22.01.2018 filed by the petitioner, and since these contentions, which are not pleaded in the writ affidavit, could not have been rebutted by the respondents in their counter-affidavit filed earlier, these contentions cannot be examined in thes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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