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TMI Blog2019 (3) TMI 1763X X X X Extracts X X X X X X X X Extracts X X X X ..... n 33 of the Bihar Value Added Tax Act, 2005 with respect to the assessment year 2012-13 including the demand notice, dated 31.8.2018 (Annexure- 3/2, Page 64) by which the petitioner has been re-assessed for payment of total sum of Rs. 75,85,890.00 including interest for the assessment year 2012-13; ii) Pending final hearing and disposal of the writ application, stay operation of the impugned order both dated 2.8.2018 and demand notice dated 31.8.2018 and restrain the respondents from taking any coercive action in pursuance to the aforesaid impugned order; iii) To pass such other order (s) as your Lordships may deem fit and proper in the facts and circumstances of the case." Identical prayer for quashing the re-assessment order dated 2.8.2018 passed in purported exercise of powers vested under section 33 of the Bihar Value Added Tax Act, 2005, impugned at Annexure 3/1, in respect of the assessment year 2011- 12 together with the demand notice dated 31.8.2018, impugned at Annexure 3/2, for a sum of Rs. 90,72,831.00 which is inclusive of interest is questioned in C.W.J.C.No. 23880/2018 (hereinafter referred to as 'the second writ petition') which prayer also accompanies a prayer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt made by the Assessing Officer on the basis of returns so filed, it is taking note of objection raised by the Comptroller and Auditor General (hereinafter referred to as 'the CAG') vide IR No. 130/2014-15 regarding deduction wrongly availed as well as liability towards purchase tax, that a notice was issued on 3.11.2017 bearing process No. 2217 putting the petitioner on show cause as to why he be not reassessed. A copy of the notice dated 3.11.2017 together with undated 'CAG' report is enclosed at Annexures 2 and 2/1 respectively. A proceeding was initiated on the audit objection of 'the CAG', the order sheet of which is enclosed at Annexure 3. It is the case of the petitioner that the Assessing Officer simply proceeding on the audit objection made by 'the CAG' has reassessed the liability of the petitioner under 'the Act' for the assessment year 2012-13 on 2.8.2018 and which is followed by a demand notice dated 31.8.2018 impugned at Annexures 3/1 and 3/2 to the writ petition. Feeling aggrieved he is before this Court. Identical sequence of events follow in the second writ petition and on an identical 'CAG' objection impugned at Annexure 2/1 to the said writ petition which again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and which would deemed to have been noticed and acted upon while passing the assessment orders for the assessment years in question enclosed at Annexures 1 series to the respective writ petition. The second issue raised by Mr. Bharti is that even if it is presumed that the audit objection was raised post-assessment i.e. after the assessment orders were passed, even then, in absence of any satisfaction shown by the Assessing Authority as to its lawfulness, as mandated under section 33 of 'the Act' read alongside Rule 25 framed thereunder which casts an obligation on the assessing authority to be satisfied on the lawfulness of such objection before proceeding thereon and which essential discharge according to Mr. Bharti is missing in the present case, the orders put to challenge are unsustainable. Learned counsel in support has referred to the proceedings initiated on the basis of audit objection, a copy of which is enclosed at Annexure 3 to the writ petition, to submit that it is simply taking note of the audit objection that the notice was directed to be issued to the petitioner on 7.11.2017 initiating proceedings under section 33 of 'the Act'. In support of his submission th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfied the Assessing Authority has proceeded within the jurisdiction vested in him under section 33 of 'the Act' for reassessment of the liability after due notice and opportunity of representation to the petitioner. According to Mr. Vikash Kumar, taking note of the stipulations present in Section 33 of 'the Act' read alongside Rule 25 of the Rules, a notice of hearing was given to the petitioner and who has participated in the proceedings without any objection. According to Mr. Vikash Kumar, once the petitioner participated in the reassessment proceeding, in case the results has gone otherwise than to the satisfaction of the petitioner, if at all he is aggrieved then the proper course of remedy would be by way of appeal and not through a writ petition. According to Mr. Vikash Kumar, the moment the Assessing Officer proceeds on the audit objection, it would signify a satisfaction even if not recorded in words. In reference to the counter affidavit filed in the proceedings he submits that due opportunity of hearing was given to the petitioner and his representative who participated in the proceedings as manifest from the order sheet and in which proceeding the objections so made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad with Rule 24 and 25 of the Act, the assessing authority was obliged to record his satisfaction about the lawfulness of the audit objection before he proceeded to issue notice under section 33 of the Act to the petitioner for re-assessment? (d) Whether the participation of the petitioner in the reassessment proceedings, would amount to waiver and as well, substantial compliance of the obligation cast under the provisions by the assessing authority? (e) Whether in the circumstances, where audit objection records that no scrutiny or assessment/ re-assessment had taken place, the assurance given by the assessing authority recorded in the audit objection that the issues would be taken care-of, would mean that the assessment orders passed by the assessment authority thereafter was taking note of the objection so present in the audit note and in such circumstance the re-assessment order in absence of any fresh audit objection will have no sanction in law? Mr. Vikash Kumar is correct on his objection of alternative remedy because in case the issue raised by the petitioner in the two writ petitions requires an examination on merits of the assessment order, certainly we would refrain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der at Annexure 3/1 which is a subject matter of consideration herein. We straightway direct ourselves to the audit objection enclosed at Annexure 2/1, the opening words whereof clearly indicate that scrutiny/ assessment has yet not been finalized. Now Section 33 of 'the Act' has certain essential prerequisites to be satisfied before the CAG records his objection and it is where an assessment or reassessment has been made or scrutiny of any return has been filed under 'the Act', that the CAG can proceed to audit the same. In other words, the CAG is empowered to raise his objections on the assessment of tax only in case, an assessment or reassessment has been made or scrutiny of any return has been filed and in no other circumstance. In the present case where the CAG has itself accepted that neither assessment nor scrutiny has been finalized, in our opinion, the CAG had neither any business to record any objection nor the assessing authority was obliged to proceed thereon. The statement recorded at the footnote of the audit objection enclosed in the second writ petition at Annexure 2/1 reads that "after these were pointed out in audit the DCCT (Incharge) stated that the matter will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is already completed. Simply because the law empowers the CAG to raise audit objection and consequently gives jurisdiction to the assessing authority to reopen an assessment, it does not mean that on every audit objection the assessing authority is to mechanically proceed in the matter without applying his mind on its lawfulness and without drawing a satisfaction as to the correctness thereof. The taxing authorities are creatures of Statute and are bound by the provisions framed thereunder and thus, where the law prescribes a mode and manner of discharge of an obligation, these authorities cannot proceed in ignorance of the same and/ or in mechanical obedience of the objection raised by the CAG, on an implied satisfaction. There is nothing implied when it comes to adjudication on inter-party rights and where the situation deals with matter like reopening of an assessment etc., the issue demands more care and caution before a decision is taken on the same. The discussions above are sufficient indication that the entire decision making process leading to reassessment orders dated 2.8.2018 and the demand notice dated 31.8.2018 for the assessment orders 2012-13 and 2011-12 respective ..... X X X X Extracts X X X X X X X X Extracts X X X X
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