TMI Blog2021 (3) TMI 960X X X X Extracts X X X X X X X X Extracts X X X X ..... VAT Act. The pre-condition for invoking the provision of Section 34 (8A) of the Act is that, there must be a pendency of proceedings under the Act, which does not fulfill in the present case. The case of the writ applicants does not fall under Section 34 (8A) of the Act and the action of the authority is in excess of jurisdiction - Application allowed. - R/SPECIAL CIVIL APPLICATION NO. 22472 of 2019 - - - Dated:- 5-3-2021 - HONOURABLE MR. JUSTICE J.B.PARDIWALA AND HONOURABLE MR. JUSTICE ILESH J. VORA KUNTAL A PARIKH FOR THE PETITIONER MR UTKARSH SHARMA, AGP FOR THE RESPONDENT ORDER PER: HONOURABLE MR. JUSTICE ILESH J. VORA 1. By filing this writ application under Article 226 of the Constitution of India, the writ applicants seek to challenge the legality and validity of the impugned order dated 28.11.2019 passed under Section 34(8A) of the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as the Act for short) by the respondent No.2. 2. The brief facts can be summarized as under : 2.1 The writ applicant No.1 M/s. Oceanic Foods Ltd., is engaged in the business of manufacturing dehydrated vegetables and it was registered under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ong with the demand notice of ₹ 37,23,216/- and thereafter, reduced input tax credit and demanded total amount of ₹ 32,23,216/- including interest and 150 % penalty of tax amount. 3. Being aggrieved and dissatisfied with the impugned order dated 28.11.2019 passed under Section 34 (8A) of the Act, the writ applicants have preferred present writ application invoking writ jurisdiction under Article 226 of the Constitution of India. 4. We have heard Mr. Kuntal A. Parikh, the learned counsel appearing for the writ applicants and Mr. Utkarsh Sharma, the learned AGP appearing for the respondents State. 5. Mr. Kuntal Parikh, the learned counsel appearing for the writ applicants has vehemently submitted that, the impugned order is illegal, without jurisdiction, unreasonable and arbitrary which deserves to be quashed and set aside. In this regard, he submitted that, there was no basis for the respondent authority to invoke the provisions of Section 34(8A) of the Act as it can only be invoked when any proceedings with respect to the subject matter of the show-cause notice is pending. He further submitted that, in the present case, no such proceedings were pending at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in, the identical question of law similar to the facts of the present case was dealt with and finally the impugned order passed under Section 34 (8A) of the Act was quashed and set aside. The relevant observations made in the judgment, more particularly in para 7 to 13 reads thus: 7. Section 32 of the VAT Act pertains to return, scrutiny and provisional assessment. Subsection (1)of section 32 provides that returns or revised returns furnished by the dealers in accordance with section 39 shall be subject to scrutiny by the Commissioner. 8. The said section provides for the assessment of returns by the Commissioner. Section 33 pertains to self assessment. Section 34, on the other hand pertains to audit assessment. Subsection (1) of section 34 provides that subject to the provisions of subsection (2), the amount of tax due from a registered dealer shall be assessed in the manner provided hereafter separately for each year, during which he is liable to pay tax. Subsection (9) of section 34 provides that no assessment under subsections (2), (5), (6) or (7) shall be made after the expiry of four years from the end of year in respect of which the tax is assessable. Subsection (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be assessed separately under the other provisions of this section in respect of the said period or periods: Provided that, once the dealer is assessed under this subsection, no tax from such transaction or claim and penalty and interest, if any, shall be levied or demanded from such dealer, at the time of assessment to tax under the other provisions of this section in respect of the said period or periods relating to such transaction or claim. Explanation For the purpose of this subsection, prescribed 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 such powers. Admitted facts are that no proceedings for assessment of the petitioner were pending on that day. The return filed by the petitioner for the relevant year was long past assessed and closed. We are not inclined to accept the contention of the counsel for the petitioner that the proceedings referred to in clause(a) of subsection (8A) must relate to the assessment of that period alone. Nevertheless, when the legislature has used the expression during the course of any proceedings under this Act ... it must have reference to proceedings for assessment of liability of dealer for the tax at any stage that may be pending. Mere internal scrutiny or examination of file cannot be said to be pendency of pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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