TMI Blog2023 (5) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... ers of a Civil Court. It may be noted that by virtue of Maharashtra Act XLII of 2017 Chapter XI-A and Sections 152A to 152O of the Act of 1949 have been deleted with effect from 01.07.2017. On the Commissioner being satisfied with the returns furnished by a registered dealer for the relevant period he is required to assess the amount of cess due from the dealer on the basis of such returns. Under Rule 25(3) of the Rules of 1996, if the Commissioner is not satisfied with the returns furnished by a registered dealer and he thinks it necessary to require the presence of the dealer or the production of further evidence, he is required to serve on such dealer a notice requiring the dealer to attend and produce or cause to be produced all evidence on which the dealer relies in support of its returns or to produce such evidence specified in the notice - Under Rule 25(11) of the Rules of 1996 the Commissioner is required to issue notice in Form-H to a dealer to show cause why it should not be so assessed. The date for compliance with notice cannot be earlier than fifteen days from the date of service thereof. Once it is shown that sufficient opportunity was given to a dealer to produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that since the Commissioner failed to complete the assessment for the relevant years within a period of ten years of issuing the initial notice in Form-H, the notice dated 24.09.2019 is quashed. Since the period of ten years from issuance of notice in Form-H on 30.10.2014 for the year 01.04.2012 to 31.03.2013 is yet to expire, it is held that the Commissioner is free to proceed to complete the assessment expeditiously and in accordance with law. Petition dismissed. - WRIT PETITION NO. 3124/2020 WITH WRIT PETITION NO. 9635/2021,WRIT PETITION NO. 9636/2021,WRIT PETITION NO. 9637/2021,WRIT PETITION NO. 9638/2021 - - - Dated:- 3-5-2023 - A S. CHANDURKAR AND M.W. CHANDWANI, JJ. For the Petitioner : Shri Gopal Mundhra with Ms Ankita Vashistha i/b Economic Law Practice. For the Respondent nos.2 and 3 : Shri A.A. Alaspurkar, Assistant Government Pleader for the respondent no.1. Shri Sandip D. Ghaterao, counsel. JUDGMENT (PER : A.S. CHANDURKAR, J.) Since similar challenges have been raised in these writ petitions, they are being decided together by this common judgment. RULE. Rule made returnable forthwith and heard the learned counsel for the parties. 2. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... belatedly was contrary to the provisions of the Act of 1949 read with the Rules of 1996. 3. Shri Gopal Mundhra, learned counsel for the petitioner-Dealer referred to the provisions of Section 152A of the Act of 1996 alongwith Rule 25 of the Rules of 1996 and submitted that though the Municipal Corporation initiated the process of assessment within the time prescribed by Rule 25 of the Rules of 1996, the failure to complete the assessment process within reasonable time rendered the continuation of the process of assessment to be bad in law. It was submitted that under Rule 25(3) of the Rules of 1996 when notice under Form-H was issued, the Dealer was required to produce such evidence that was in possession of the Dealer on which it sought to rely in support of the returns or produce such evidence that was mentioned in the notice. The Commissioner under Rule 25(3) of the Rules of 1996 is required to consider all such evidence that is produced on the date specified in the notice or as soon as may be thereafter so as to assess the amount of cess due from the Dealer. Under Rule 25(4) of the Rules of 1996, if a registered Dealer fails to comply with the terms of any notice issued und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n [(1998) 4 SCC 154], Wilco Company Versus Union of India [2002 SCC OnLine Mad 1176], M/s J.M. Baxi Co. Versus The Government of India Others [2016 SCC OnLine Mad 3176], F.Jagat Ram Om Parkash Versus Excise Taxation Officer [AIR 1965 P H 133 (FB)] and Gupta Smelters Pvt. Ltd. Versus Union of India [2019 (365) E.L.T. 77 (P H)] . It was thus submitted that the reminder issued in Form-H in all writ petitions on 24.09.2019 was required to be quashed and set aside. 4. Per contra, Shri Sandip D. Ghaterao, learned counsel appearing for the Municipal Corporation opposed the aforesaid submissions. According to him, what was relevant was the initiation of the process of assessment and if it was shown that this process of assessment had been initiated within the prescribed time, the proceedings were not liable to be quashed only on the ground that the assessment proceedings were not concluded till date. The Dealer had sought to urge that by issuing the reminder in Form-H on 24.09.2019 the Municipal Corporation had sought to re-open the assessment. It was not a case of re-initiation or re-opening of the assessment but it was a matter of completion of the assessment. Having initia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r [(1988) 3 SCC 478], Commissioner of Income-Tax NHK Japan Broadcasting Corporation [2008 SCC OnLine Del 1433], Indian Hume Pipe Co. Ltd. Versus Commissioner of Income-Tax [1990 SCC OnLine Bom 594], Siemens India Ltd. Versus The State of Maharashtra [1986 SCC OnLine Bom 420 ] and the Division Bench judgment of this Court in Director of Income Tax Versus M/s Mahindra Mahindra Limited [Income Tax Appeal No. 3489 of 2009]. He further sought to distinguish the decisions on which reliance was placed by the learned counsel for the Dealer. It was thus submitted that all the writ petitions were liable to be dismissed. 5. We have heard the learned counsel for the parties at length and with their assistance we have perused the entire material on record. For appreciating the rival submissions it would be necessary to first refer to the relevant statutory provisions that would be material in this regard. It is not in dispute that the petitioner-Company is a dealer as defined by Section 2(16A) of the Act of 1949. Section 152A of the Act of 1949 empowers the Corporation to levy cess on the entry of goods specified in Schedule-A at the rates prescribed in the said Schedule. Section 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the date prescribed for the last return pertaining to that period, then the Commissioner shall, at any time within three years from the end of the year in which such period occurs, after giving the dealer a reasonable opportunity of being heard, proceed to assess, to the best of his judgment, the amount of the cess, if any, due from him. (6) Where returns once furnished as required under sub-rule (1) of rule 24 they shall be assessed as and when they are furnished. (7) If the Commissioner has reason to believe that a dealer is liable to pay cess in respect of any period, but has failed to apply for registration or failed to apply for registration within time as required by rule 13, the Commissioner shall at any time within three years from the end of the year in which such period occurs, after giving the dealer a reasonable opportunity of being heard, proceed to assess, to the best of his judgment, the amount of cess, if any, due from the dealer in respect of that period and any period or periods subsequent thereto. On the Commissioner being satisfied with the returns furnished by a registered dealer for the relevant period he is required to assess the amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced in this regard. The show cause notice has to be issued in Form-H and the date of compliance cannot be earlier than fifteen days from the service of such notice. On the date specified in the notice or as soon as may be thereafter the Commissioner is required to assess the amount of cess due from the dealer after considering all the evidence which may be produced. Failure to comply with the notice issued in Form-H permits the Commissioner to assess to the best of his judgment the amount of cess due from a dealer. The aforesaid scheme therefore clearly indicates that in the matter of assessment of cess, Rule 25 of the Rules of 1996 is a Code in itself since it prescribes in detail the manner in which assessment of cess has to be undertaken. The consequence of failure to comply with the notice issued in Form-H is also provided for by empowering the Commissioner to assess to the best of his judgment the amount of cess due from a dealer. 7. It is pertinent to note that Rule 25(3) of the Rules of 1996 requires the Commissioner to assess the amount of cess due from a dealer either on the date specified in the notice or as soon as may be thereafter. This provision therefore indicate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.04.2010 to 31.03.2011 17,50,26,514/- 01.04.2011 to 31.03.2012 16,33,72,664/- 01.04.2012 to 31.03.2013 12,73,69,116/- Since the returns for all the years have been filed, the provisions of Rule 25(3) and (4) of the Rules of 1996 would be attracted. The notice in Form-H has been issued for each assessment-year immediately at the end of each assessment year. After these notices were issued, the Municipal Corporation had issued reminders to the Dealer to submit books of accounts for the period from 01.04.2008 to 31.03.2012. The last such reminder was issued on 21.08.2013. Form-H for the year 01.04.2012 to 31.03.2013 was issued on 30.10.2014. The reminder now issued for all the years in Form-H is dated 24.09.2019. It would thus be necessary to consider whether the Commissioner took necessary steps to assess the Dealer for the relevant years on the basis of the documents produced by the Dealer or to assess the Dealer to the best of his judgment for failure to comply with the terms of the notice issued. It is the specific stand of the Municipal Corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onable time. The Corporation is not required to wait endlessly till the terms of notice issued under rule 25(3) of the Rules of 1996 are complied with. The Commissioner is empowered to act in accordance with Rule 25(4) of the Rules of 1996 on failure on the part of the Dealer to submit further documents. We therefore find that the only reason assigned by the Municipal Corporation that there was a failure on the part of the Dealer in submitting relevant documents cannot be a reason or justification for the Commissioner not to complete the assessment expeditiously. 10. As stated above, the Commissioner was required to act with expedition under Rule 25(3) of the Rules of 1996 or thereafter under Rule 25(4) of the Rules of 1996. The reply filed by the Municipal Corporation does not indicate any sufficient reason for not proceeding with completion of such assessment. Except for stating that the Dealer failed to submit relevant documents which reason has been found to be not legally tenable for not proceeding with the assessment, it cannot be said that there is any justification on the part of the Municipal Corporation in not completing the assessment. The scheme of Rule 25(3) and (4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nishing returns could be said to be time barred and thus beyond jurisdiction. The question was answered in the negative. Similar issue was considered in Murlidhar Mahabir Parshad (supra) which followed the earlier decision in Tara Chand Lajpat Rai (supra). Similar view has been taken in Messrs Sundarsanam Iyengar Sons (supra). Hence ratio of these decisions would not apply to the present facts since the challenge is based on the failure to complete the assessment within reasonable period. The decisions in NHK Japan Broadcasting Corporation and M/s Mahindra Mahindra (supra) also pertain to initiation of proceedings under Section 201 of the Income Tax Act, 1961 and are hence distinguishable. The decisions in Indian Hume Pipe Co. Ltd. as well as Siemens India Ltd. (supra) also do not assist the stand of the Municipal Corporation. 12. It is well settled that where no period of limitation is prescribed for completing an act, the same is required to be done/ completed within reasonable period. As to what would be the reasonable period is dependant upon the facts and circumstances of each case. In this regard, reference can be made to the decisions in Citedal Fine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Supreme Court has observed that even with regard to best judgment of assessment, the same cannot be allowed to be made after the expiry of reasonable period in the context of the Punjab General Sales Tax Act, 1948. 13. The exercise of power to undertake assessment to the best of judgment of the Assessing Authority has been considered by the Full Bench of the Punjab and Haryana High Court in F. Jagatram Omparkash (supra). Under Section 11(4) of the Punjab General Sales Tax Act, 1948, on a registered dealer furnishing returns thereafter failing to comply with the notice issued under Section 11(2) of the Act of 1948, the Assessing Authority is entitled to proceed to assess to the best of its judgment within a period of three years after expiry of the relevant period the amount of tax due from the dealer. The aforesaid provision was considered by the Full Bench and after referring to the judgment of the Hon ble Supreme Court in Ghanshyamdas Versus Regional Assistant Commissioner of Sales Tax [AIR 1964 SC 766], it was held that when a question arises as to whether or not an Assessing Authority has proceeded to asses to the best of its judgment, it is for that Authority t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, but liberal adjournments do not serve any purpose but would rather defeat the public interest. The Revenue must understand that just as it is anxious to recovery public money, the assessee is equally keen to face the consequences of legal proceedings. They do not wish to keep the proceedings lingering for they would want to concentrate on their business and not legal proceedings. It is a waste of their time as well. If an adjudication order is passed with reasonable expediency, even the assessees would arrange their affairs and in the event they are aggrieved, they would avail of the further remedies. Therefore, this is a power coupled with a duty and which the Revenue officials must realise. The earlier it is the better it would be for all concerned. 10. The second aspect which requires elaboration is, if the understanding of the Revenue is that it has to wait endlessly for the assessee to appear and make submissions, it is not the assessee s right to delay the matter. There is no vested right in prolonging the proceedings and none can claim that the law permits this course. Adjournments may be sought frequently but they are not to be granted liberally. That gives impr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired to be completed within a reasonable time keeping in view the spirit of Rule 25 of the Rules of 1996 when read as a whole. It was also urged on behalf of the Municipal Corporation that on account of the pandemic situation the assessment proceedings could not be completed. It is to be noted that even if the period from 01.03.2020 to 28.02.2022 is excluded from consideration the same would not make much difference for the reason that the reminder in Form-H was given on 24.09.2019 and nothing precluded the Municipal Corporation from completing the assessment till the onset of the pandemic situation. Another reason orally put forth by the Municipal Corporation is the pendency of the proceedings with regard to the demand for cess under Rule 35(1) of the Rules of 1996 as well as challenge to Rule 41 of the Rules of 1996, Writ Petition No. 8506 of 2016 alongwith other writ petitions [M/s Super Label Manufacturing Co. Versus The State of Maharashtra Others]. The said writ petition came to be dismissed on 29.07.2016 by the Division Bench. The aforesaid decision was challenged before the Hon ble Supreme Court and while granting leave on 06.02.2017 it was directed that the Municipa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be quashed. 18. It is also to be noted that the reminder in Form-H dated 24.09.2019 issued to the dealer in all the writ petitions required the dealer to appear before the Local Body Tax Officer for the purposes of assessment under Rule 33 of the Maharashtra Municipal Corporations (Local Body Tax) Rules. It is to be noted that the Dealer had filed returns under Rule 25(1) of the Rules of 1996. The demand of cess was in view of the provisions of Section 152A of the Act of 1949. Entire Chapter XIA of the Act of 1996 with regard to the provisions that related to levy, calculation and recovery of cess in lieu of Octroi came to be deleted by Maharashtra XLII of 2017. This deletion took effect from 01.07.2017. Instead of assessing the cess in terms of Rule 25 of the Rules of 1996 the Municipal Corporation through its Local Body Tax officer sought to invoke Rule 33 of the Local Body Tax Rules. Issuance of the said reminder on 24.09.2019 thus indicates non-application of mind to the relevant facts inasmuch as what was under consideration was the assessment of cess and not local body tax. The dealer having filed return under Rule 25 of the Rules of 1996, the assessment thereof was lia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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