TMI Blog2019 (7) TMI 1666X X X X Extracts X X X X X X X X Extracts X X X X ..... legislative intent. Having observed thus, there is no infirmity in so far as the issue of limitation raised by Mr. Ranjan is concerned and the proceedings are within time. The assessing authority has completely failed on his discharge and which is confirmed from the order dated 23.10.2017 whereby proceeding has been mechanically initiated by the assessing authority on a simple consideration of the departmental audit objection and on receipt of the report. Though Mr. Chiranjiva Ranjan advocates for putting a quietus to the matter on lapse but since the initiation is within the time frame and indulgence is invited on account of procedural irregularity in the proceeding, we are persuaded to remit the matter to the assessing authority, who shall consider the audit objection and proceed in the matter in accordance with law bearing in mind the legal position settled, within a maximum period of three months from the date of receipt/production of a copy of this judgment. The assessment order dated 31.03.2018 together with the demand notice of the same date, impugned at Annexures 1 and 1/2 to the writ petition, along with the attachment notice dated 24.1.2019, impugned at Annexure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself and which has since been allowed by us as recorded above. We thus have proceeded to consider the validity of assessment proceeding itself on its exercise under Section 31 of the Act read alongside Rule 22 of the Rules framed thereunder and Section 27 of the Act . The matter in contest relates to assessment year 2012-13 ending on 31.03.2013. The petitioner filed his returns on 31.08.2013 disclosing particulars in terms of the provision underlying Section 24 of the Act . Since no scrutiny or assessment was carried out before the due date within the meaning of the explanation attached to Section 24 of the Act i.e. by 31.12.2013 relatable to the financial year 2012-13, that in terms of the provisions underlying Section 26(1) of the Act the returns were deemed assessed. A departmental audit followed under Section 26(3) of the Act on the returns filed by the petitioner in the light of order no. 14 dated 10.03.2015 when notice was issued to the petitioner to co-operate. The petitioner responded to the notice and participated in the audit as manifest from the order recorded on 28.04.2016 in the file relating to the proceedings in question produced by Mr. Vikash Kuma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) Whether the time limit prescribed under Section 31 of the Act has been followed in the present case, and; (b) Whether the exercise under Section 31 of the Act alongside Rule 22 of the Rules is in tune with the stipulations. While Mr. Chiranjiva Ranjan, learned counsel appearing for the petitioner has reiterated the position as we have already noted above to question the proceedings on limitation, Mr. Vikash Kumar, learned SC-11 has taken us through the provisions of Section 31 of the Act to submit that the period prescribed thereunder requires the assessing authority to initiate action for reassessment but the outer limit to conclude such proceeding so initiated is provided under Section 27 and which allows the assessing authority to complete the proceeding within a period of two years of such initiation. Placing reliance on the order dated 23.10.2017 of the assessing authority as present in the order-sheet, he submits that a notice under Section 31 of the Act was issued on 23.10.2017 and which confirms that the proceeding initiated was within a period of four years from the due date which in the present case would be 31.12.2013 and expiring only on 31.12.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to not only record its opinion on the correctness of the audit objection but also to record satisfaction thereon before he proceeds to issue a notice thereunder. It is in compliance of our order dated 11.07.2019 that the records have been produced and we have gone through the orders passed in the proceedings. In our considered opinion, the assessing authority has completely failed on his discharge and which is confirmed from the order dated 23.10.2017 whereby proceeding has been mechanically initiated by the assessing authority on a simple consideration of the departmental audit objection and on receipt of the report. For the sake of convenience we reproduce the relevant extracts of Section 31 as well as Rule 22(8)(c) of the Rules which are self eloquent of discharge expected of an assessing authority: based upon a departmental audit. Sec.31. Assessment or re-assessment of tax of escaped turnover - (1) if the prescribed authority is satisfied, either on the basis of audit conducted under sub-section (3) of Section 26 or otherwise, that reasonable ground exist to believe that, in respect of any assessment under this Act or un der the Bihar Finance Act, 1981, (Bihar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding formation of opinion as well as of recording satisfaction on the default warranting re-opening of assessment. Though Mr. Vikash Kumar, learned SC-11 has tried to justify the action but the records fail the justification because there is complete absence of either opinion expressed by the assessing authority or any satisfaction drawn as mandated under Section 31(1) and Rule 22(8) of the Rules which is an essential prerequisite to be satisfied before he proceeds to initiate any such proceeding to reopen the assessment. The issue of re-opening of assessment resting on the audit objection by the Comptroller Audit General under Section 33 of the Act was a subject matter of a judgment rendered by this Court reported in 2019 (3) BLJ 414 ( Molson Coors Cobra India Pvt. Ltd. v. the State of Bihar ors. ), to conclude that a reopening of assessment based on audit objection is not a mechanical exercise because a concluded exercise under the Act in respect of a dealer, is sought to be questioned by the audit and thus before the assessing authority proceeds to act thereupon, he has to record his satisfaction as to the objection recorded and whether it warrants any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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