TMI Blog2021 (2) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... a registered dealer, has to be first adjudicated by the Assessing Officer in the assessment proceedings. Clause (a) of sub-section (1) of Section 25 cannot be termed into an assessment which in the present case the Assessing Officer has done. According to him, the petitioner could not have excluded the discounts passed on to the dealers from his taxable turnover and to that extent the assessee had declared turnover less than the actual turnover. Even if the Assessing Officer is correct in so contending, it is not under Section 25(1)(a) of the Act that he can bring such turnover to tax. Allowing him to do so, would not only be expanding the boundaries of the powers under sub-section (1) of Section 25 of the TNVAT Act but also overriding the limitation provisions contained in the said chapter. The impugned orders of tax demands raised by the Assessing Officer under Section 25 of the TVAT Act are set aside - attachment or attachments on the petitioner s bank accounts are lifted - Petition allowed. - W.P(C) No.847/2020, W.P(C) No.848/2020 and W.P(C) No.851/2020 - - - Dated:- 8-2-2021 - HON BLE THE CHIEF JUSTICE MR. AKIL KURESHI HON BLE MR. JUSTICE S. G. CHATTOPADHYAY For Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter referring to various provisions contained in TVAT Act, and particularly Sections 24, 25 and 27 thereof, held and observed as under: 15. All these provisions noted above contained in Chapter V of the TVAT Act pertaining to returns and assessment thus provide for detailed procedure for requiring a dealer to file periodic returns of his turnover, for audit assessment of such returns if so desired and also to address the issues of turnover escaping assessments. The relevant provisions of Sections 24 and 27 need to be looked from the angle of the scheme contained in Chapter V of the TVAT Act concerning returns and assessments. 16. Sub-section (1) of Section 24 requires every registered dealer to furnish return in such form by such due dates as may be prescribed. A registered dealer thus is obliged to file his return as mandated under sub-section (1) of Section 24 of the TVAT Act. Subsection (2) of Section 24 on the other hand, refers to a case of a dealer in respect to whom the Commissioner has reason to believe that his turnover of sales has exceeded the taxable limit, the Commissioner would serve a notice in the prescribed manner requiring such dealer to furnish retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 27 of the TVAT Act. Any other view would defeat the very scheme of the said Chapter providing for audit assessment and limitation for completing in such assessment as provided under Section 33 of the Act. The respondent authorities cannot be allowed to circumvent the limitation provision for completing audit assessment by permitting resort to the powers of summary adjustments under Section 27 which are peculiar in nature and are available only in case where notice under sub-section (2) of Section 24 of the Act has been issued to a dealer. 21. In the result, impugned orders under Section 27 of the TVAT Act are set aside. Any demand notices consequent to such orders shall also stand invalidated. [3] After the said judgment of this Court, the department initiated fresh proceedings against the petitioner for the same period and issued a show cause notice dated 23.07.2020. The petitioner replied to the show cause notice under communication dated 3rd August, 2020. The Superintendent of Taxes in order to correct certain technical aspect withdrew the show cause notice and issued a fresh show cause notice on 27th August, 2020 in which he stated as under: And ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice is issued under Section 25 of the Act which is also wholly impermissible and would amount to circumventing the limitation provisions since all the assessments in the present case have long become time barred. With respect to contentious issue of short payment of tax, the petitioner contended as under: 18. That, it s reiterated that the applicant-dealer is liable to deposit sales tax/VAT amounting to ₹ 4,26,28,570/- for the financial periods 2010-11 but deposited amounting to ₹ 4,31,06,304.00 against the sale proceeds amounting to ₹ 14,42,94,836.00 after allowing discounts amounting to ₹ 23,88,657.00. Hence, the applicant-dealer is deposited excess sales tax/VAT amounting to ₹ 4,77,734.00(Taxable Sale proceeds ₹ 14,42,94,836.00 - Discount ₹ 23,88,657.00 = ₹ 14,19,06,179.00 + Excise Duty ₹ 7,12,36,669.00 =₹ 21,31,42,848.00). Accordingly, sales tax/VT was/is Payable @ 20% amounting to ₹ 4,26,28,570.00 but ₹ 4,31,06,304.00 was deposited. Hence, the applicant-dealer has already deposited excess amount of sales tax/VAT amounting to ₹ 4,77,734.00 yet the applicant-dealer has been harassing continuous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished in Form X of the TVAT Rules, 2005 and the difference amount of sales and balance tax due is not at all determined to the best of judgment of the Superintendent of Taxes. 10.6 The dealer totally failed to produce any documentary evidence with regard to the discount amounting to ₹ 23,88,657.00, ₹ 39,96,739.00 ₹ 63,23,680.00 as claimed to have been allowed by the dealer to its bonafide buyers under Section 2(26) of the TVAT Act, 2004. 10.7 As per Section 2(26) of the TVAT Act, 2004, Sales Price means the amount of valuable consideration received or receivable by a dealer for the sale of any goods less any sum allowed as cash discount, according to the practice normally prevailing in the trade; It is an undisputed as well as established fact that the dealer declared the total sales at Sl. No.(i) in Table 9 of the return after deducting the amount/sum towards discount allowed by him to its buyers under Section 2(26) of the TVAT Act, 2004, which resulted less payment of tax mounting to ₹ 5,38,383/-, ₹ 8,05,845/- ₹ 12,64,761/- according to the returns furnished for the periods 2010-2011, 2011-12 and 2012- 13 respecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed by the statute and none therefore, can be read into it. The Superintendent of Taxes found that the petitioner had made a misdeclaration with respect to the taxable turnover since the petitioner excluded the discount stated to have been given to the dealer from the taxable turnover. Firstly, the factum of such discount was not established and secondly, even otherwise the question whether such discount would form part of the taxable turnover or not was a disputed question. The declarations made in the return filed by the petitioner therefore, were inaccurate. When these aspects came to the notice of the Superintendent of Taxes, he raised the demands after hearing the petitioner, which needs no modifications. If the petitioner has any dispute about the correctness of the order, he must file an appeal as is provided under the Act. [8] In the present petitions, we are concerned with the jurisdictional aspect of the powers exercise by the Superintendent of Taxes. There are no disputed questions to be decided and we have proceed on admitted facts. When in such background jurisdictional question arises, it would not be necessary to relegate the petitioner to appellate remedy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 24 thus casts a duty on a registered dealer to furnish the return and to pay tax as per the declarations made in such return. If a dealer has taxable turnover but is not registered, the Commissioner may require him under Sub-section (2) of Section 24 to file the return as if he is a registered dealer. [12] Section 25 of the TVAT Act pertains to return defaults. Relevant portion of which reads as under: 25. Return defaults: (1) If a dealer required to file return under sub-section (1) or sub-section (2) of section 24 (a) fails without sufficient cause to pay the amount of tax due as per the return for any tax period; or (b) furnishes a revised return under sub-section (3) of section 24 showing a higher amount of tax to be due than was shown by him in the original return; or (c) fails to furnish return; Such dealer shall be liable to pay interest in respect of (i) the tax payable by him according to the return, or (ii) the difference of the amount of tax according to the revised return; or (iii) the tax payable for the period for which he has failed to furnish return; at the rate of one and half perce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f five years from the end of the tax period to which the assessment relates. Section 34 pertains to turnover escaping assessment. As per sub-section (1) of Section 34 where after a dealer is assessed under Section 29 or Section 30, the Commissioner has reason to believe that whole or any part of the turnover for any period has escaped assessment or has been under assessed or has been assessed at the lower rate or been wrongly allowed any deduction or allowed any wrong credit, it is open for the Commissioner to proceed to assess amount of tax due from the dealer. Here also sub-section (2) of Section 34 provides that no order of assessment shall be made under sub-section (1) after expiry of five years from the end of the year in respect of which or part of which the tax is assessable. [16] Chapter V of the TVAT Act thus provides for a complete mechanism for filing of the returns, their assessments and provisions for limitation for exercising such powers of assessment. Once a dealer files a return, it may be subjected to different kinds of treatment depending on the situation and the treatment that the Assessing Officer chooses to accord to it. He may either chose to scrutinize the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed on the basis that there is a bonafide genuine dispute between the assessee and the department with respect to an element of sale proceed whether would form part of the taxable turnover or not. Such a dispute can be resolved only through the assessment in terms of various provisions contained in Chapter-V. The same under any circumstances cannot be a subject matter of adjustments under Section 25 of the Act. [18] We may recall, under sub-section (1) of Section 25 the Assessing Officer can charge tax from a dealer at a prescribed rate if the dealer fails without sufficient cause to pay amount of tax as due as per the return or has furnished a revised return showing higher amount of tax as compared to the original return or has failed to furnish return. Obviously, in the present case the department does not argue that the case of the petitioner falls in the later of the two clauses of sub-section (1) of Section 25 of the TVAT Act. Even according to the department the case of the petitioner falls in Clause (a) namely that the dealer has failed without sufficient cause to pay the amount of tax due as per the return. [19] There is a clear misconception on part of the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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