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TMI Blog2023 (8) TMI 786X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Authority-Deputy Commissioner of Commercial Taxes, Chaibasa Circle, wherein pursuant to an audit objection raised by the office of the Accountant General, Jharkhand, re-assessment order was passed in exercise of the power under Section 42(3) of the Jharkhand Valued Added Tax Act, 2005 (for short 'JVAT Act'). 3. In writ Petition being W.P.(T) No. 3528 of 2022, Assessment Year involved is 2015-16 and in the said writ application also, pursuant to a similar audit objection raised by the office of the Accountant General, Jharkhand, re-assessment order dated 08.03.2022 has been passed by the Assessing Authority i.e., Deputy Commissioner of Commercial Taxes, Chaibasa Circle, Chaibasa which has been assailed by the writ petitioner. 4. The primary contention of the Petitioner is that re-assessment orders have been passed beyond the statutory period of limitation prescribed under the JVAT Act and Section 42(3) of the JVAT Act is only a provision which provides the circumstances under which re-assessment proceedings can be initiated, and it has been further contended that only enabling provision for carrying out re-assessment proceedings under the Act is contained under Section 40 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Petitioner as the Petitioner is a manufacturing dealer and the said Rule applies only to a trading dealer. Petitioner further contended that, even otherwise, if Petitioner sold the goods at a price as reflected in its invoices, the State Government is incompetent to levy tax on the cost price of the goods of the Petitioner as it can only levy tax on actual sale consideration received by Petitioner, even though Petitioner suffered loss at the time of sale of goods. However, Assessing Authority, vide its order dated 08.03.2022, passed re-assessment order levying tax on the amount of Rs. 12.78 crores @ 5%. Said order was passed under Section 42(3) of the JVAT Act read with Section 35(7) of the Act. So far as W.P.(T) No. 3528 of 2022 is concerned, in the said case, original assessment order was passed for the Assessment Year 2015-16 on 31.03.2019 and the notice pursuant to audit objection was issued on 19.05.2020 and re-assessment order was passed on 08.03.2022. 8. Mr. Sumeet Gadodia, learned counsel for the Petitioner, apart from arguing the jurisdictional issue of limitation, also requested us to examine the question of very leviability of tax on the amount of loss suffer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticle 265 of the Constitution of India is both on levy and collection of tax without authority of law and the State is not permitted to extract any tax without following procedure laid down by law. It was submitted that JVAT Act contains a complete mechanism and lays down detailed procedure under which re-assessment proceeding can be initiated against an Assessee including the period of limitation. It was submitted that not only levy of tax but its collection should be in accordance with law and Section 42(3) of the JVAT Act is to be read with Section 40 of the said Act which is the only enabling provision for initiation of re-assessment proceeding and, thus, the period of limitation of five years from the end of tax period, as prescribed under Section 40(4) of the JVAT Act, would be applicable even in respect of re-assessment proceeding which has been initiated pursuant to audit objection. Reference in this regard has been made to the decision of the Hon'ble Supreme Court in the case of Mafatlal Industries Ltd. & Ors. Vs. Union of India and ors. reported in (1997) 5 SCC 536 (Para-160). 11. Learned counsel brought to our notice the scheme of the JVAT Act which includes charging se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-assessment order which was required to be passed by the prescribed authority for giving effect to an order passed by a Court or Tribunal in appeal/revision in respect of the Assessee itself. 13. It was further submitted that similarly Section 42(3), which was inserted by Act 22 of 2011, lays down additional ground for initiation of reassessment proceeding where an objection or observation relating to either in fact or in law has been made by the Comptroller and Auditor General of India in respect of assessment/re-assessment order of an Assessee. Referring Section 42(3) of the Act it was vehemently contended that although additional ground for initiation of reassessment proceeding against a dealer was inserted vide Section 42(3), but said Section did not contain any non-obstante clause extending the period of limitation for reassessment as prescribed under Section 40(4) of the JVAT Act. On the strength of the above, it has been submitted that where the Legislature, while providing for additional ground for initiation of reassessment proceeding, thought it appropriate to extend the period of limitation on availability of such ground, the same was specifically inserted by non-obsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a dealer, whereas, under Section 42(3), requirement of recording 'reason to believe' has been dispensed with and it is mandatory for the Assessing Authority to proceed to re-assess a dealer. It was submitted that in view of such mandatory provision inserted by the Legislature, deliberately, no period of limitation has been prescribed under Section 42(3) which is an independent enabling provision of re-assessment inserted under the Act. It was submitted that the Comptroller and Auditor General of India is a Constitutional authority recognized under Articles 148 and 149 of the Constitution of India and under Article 149, the Comptroller and Auditor General of India is required to perform such duties and exercise such power in relation to the account of the Union and of the State or any other Authority, or Body as may be prescribed, by any law made by the Parliament. It was further submitted that the Comptroller and Auditor General of India (Duties, Power and Conditions of Services) Act, 1971 gives wide power upon the said authority to audit the account of State Government and while auditing the account of the State Government, if it finds that any tax has been short levied and/or n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Supreme Court in the case of State of Jharkhand vs. Shivam Coke, reported in (2011) 8 SCC 656, it was contended that where the Statute does not provide period of limitation, provisions of Limitation Act cannot be read into it and proceedings are required to be conducted in a reasonable period of time which would depend upon the facts and circumstances of each case. 17. Learned Advocate General also raised the issue of maintainability of the writ applications by stating, inter alia, that Petitioner has alternative remedy of preferring an appeal against the orders of re-assessment under Section 79 of the JVAT Act before the Appellate Authority and, in view of existence of alternative remedy of appeal, writ petitions should not be entertained by this Court. Reliance was placed upon a decision of the Hon'ble Apex Court in the case of Assistant Commissioner of State Tax & Ors. Vs. Commercial Steel Limited, reported in (2021) SCC OnLine SC 884 (Para-11) in support of the said contention. 18. Lastly, it was submitted that even if, for the sake of arguments, it is presumed that Section 42(3), which provides for initiation of re-assessment proceedings, is to be read with Section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is regard was also made to Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 to contend, inter alia, that the Parliament, in view of COVID 19 pandemic, provided relaxation by carrying out amendment in Central Taxing Statutes including Goods and Services Tax Act, Income Tax Act, etc. extending the period of limitation for completion of assessment/re-assessment proceedings, etc. It was submitted that there was no occasion for the Parliament to pass the Relaxation and Amendment Act, 2020, which was notified on 29th September, 2020, if the order of Hon'ble Apex Court itself has an effect of extending the period of limitation pertaining to adjudication proceedings also. Reliance was also placed upon similar amendment carried out by the State of Jharkhand vide Jharkhand Value Added Tax (Amendment) Act, 2020 notified on 19th November, 2020. By virtue of the said amendment, State of Jharkhand amended the provisions of Section 40(4) and Section 42(1) and 42(2) of the JVAT Act, wherein specifically, for the Assessment Year 2014-15, the period of limitation was extended for a period of six months i.e., up to 31st August, 2020. Similarly, amendments were made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 42(3) did not prescribe any period of limitation, the limitation should be read to be five years from the end of the original tax period. 22. Having heard learned counsel for the rival parties and after going through the documents available on record following issues arise for determination in the instant case, namely:- (i) Whether Writ Petition is maintainable in view of availability of alternative remedy? (ii) Whether Section 42(3) of the JVAT Act merely enumerates additional circumstances/grounds on which an Assessee can be subjected to re-assessment, and, re-assessment proceeding is to be guided by substantive provision of re-assessment contained under Section 40 of the JVAT Act?' (iii) Whether if Section 42(3) is held as not prescribing any period of limitation for carrying out re-assessment proceedings, said re-assessment proceeding is required to be carried out within the reasonable time and what should be the reasonable time under the scheme of the JVAT Act? (iv) Whether suo-motu extension orders extending the period of limitation passed by Hon'ble Supreme Court would apply to original adjudication proceedings? In order to properly appreciate and answer the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er an opportunity of being heard, by an order in writing direct that he shall, in addition to any tax payable which is or may be assessed under Section 35 or 36 or 38, pay by way of penalty a sum equal to thrice the amount of tax on the concealed turnover or on concealed or incorrect particulars of suppression or concealment or for furnishing incorrect particulars; on the amount of tax payable under the Act or on the suppressed turnover or on concealed turnover or for furnishing incorrect particulars. The interest shall be payable before the completion of the assessment and for determining the amount of interest payable, the prescribed authority shall quantify the amount of tax payable provisionally under this Act. (3) Any penalty imposed or interest levied under this section shall be without, prejudice to any action which is or may be taken under Section 84 of this Act. (4) No order of assessment and reassessment shall be made under sub-section (1) after the expiry of five years from the end of the year in respect of which or part of which the tax is assessable." Xxx xxx xxx "42. Power of Reassessment in certain cases.- (1) Where any order passed by the prescribed auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble Apex Court in the case of State of Punjab & Ors. (supra), has held as under:- "24. Question of limitation being a jurisdictional question, the writ petition was maintainable." 24. Apart from the jurisdictional question being raised in the writ petition, further argument was advance on behalf of the Petitioner that alternative remedy of appeal and/or revision would be an exercise in futility as the highest statutory authority i.e., Commercial Taxes Tribunal, in respect of other Assessees, has already held that Section 42(3) of JVAT Act does not prescribe any period of limitation and, thus, it was contended that filing of appeal would be an empty formality. It was brought to our notice that order passed by Commercial Taxes Tribunal on the aforesaid issue has been challenged in other writ petition filed by the assesse, which is pending consideration before this Hon'ble Court. In the case of Onkarlal Nandlal (supra), Hon'ble Apex Court has entertained a Special Leave Petition under Article 136 of the Constitution of India challenging assessment orders where the question arose of construction of certain provisions of Rajasthan Sales Tax Act, 1954. In the said Judgment, Hon'ble Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontained under Section 40 of the JVAT Act." 29. Article 265 of the Constitution of India provides, inter alia, that there shall be no levy and collection of tax without any authority of law. Like any taxing statute, the scheme of JVAT Act also contains provisions pertaining to charge of tax; secondly, provisions relating to computation of tax resulting into demand of tax; and, thirdly, provisions for recovery of tax so computed. The Hon'ble Apex Court, in the case of Mafatlal Industries (supra), vide Para 160, has held as under:- "160. The constitutional embargo is on both the levy and collection of tax without authority of law. It has been repeatedly asserted by the Courts that every taxing law has three parts. First is charge, the second is computation which results in a demand of tax and the third is recovery of the tax so computed. The Constitution has enjoined that there must be a valid levy. The word 'levy' has also been understood in a broad sense in various cases to include not only the imposition of the charge but also the whole process upto raising of the demand. The Constitution guarantees that not only the levy should be lawful but also collection of tax must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tains therein provisions for 'Assessment and Self-assessment'; and Section 35(8) of the said provisions provides, inter alia, that no assessment would be made after expiry of three years from the end of tax period for which tax is assessable. Section 37 deals with 'Audit Assessment' and Section 38 deals with 'Assessment of Dealer who fails to get himself Registered'. Section 39 provides, inter alia, that 'No Assessment after five years' shall be made under Sections 37 and 38 of the Act. Section 40 of JVAT Act, which we have quoted hereinabove, deals with the provision of 'Turnover escaping assessment' and, admittedly, Section 40(4) provides, inter alia, that no assessment or re-assessment shall be made after expiry of five years of the tax period for which tax is assessable. Section 41 of the Act provides for 'Exclusion of period for Assessment' where assessment or re-assessment proceedings have been stayed under the orders of competent court. Section 42, which we have quoted hereinabove, gives power of 're-assessment in certain cases'. 33. Thus, under the scheme of the Act, there is provision for assessment, self-assessment, audit assessment, assessment of dealers not registered, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any Judgment or order of any Court or Tribunal rendered subsequently. Since this specific enabling provision was inserted as an additional ground for initiation of re-assessment proceeding, the Legislature, deliberately in its wisdom, inserted a non-obstante clause in Section 42(1) of the Act extending the period of limitation of five years prescribed under Section 40(4) for re-assessment by a further period of three years from the date of Judgment or order. 39. Thus, even if in a case where the period of limitation has already expired for initiation of re-assessment proceeding under Section 40(4) of the Act and thereafter Judgment is delivered by any Court or Tribunal, which pronounces any law; and if the prescribed authority is of the opinion that it has made any assessment earlier which is contrary to the said law declared by the Judgment and order by any Court or Tribunal, the prescribed authority, de hors the period of limitation prescribed, can initiate re-assessment proceeding under Section 40(1) read with Section 42(1) of the Act within three years from the date of Judgment or order. 40. Similarly, Section 42(2) of the Act also contains a non-obstante clause which extends ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds does not by its mere availability that a fact which was already there in records does not by its mere availability become an item of "information" till the time it has been brought to the notice of assessing authority. Hence, the audit objections were well within the parameters of being construed as "information" for the purpose of Section 19 of the State Act. 32. The expression "information" means instruction or knowledge derived from an external source concerning facts or parties or as to law relating to and/or after bearing on the assessment. We are of the clear view that on the basis of information received and if the assessing officer is satisfied that reasonable ground exists to believe, then in that case the power of the assessing authority extends to reopening of assessment, if for any reason, the whole or any part of the turnover of the business of the dealer has escaped assessment or has been under-assessed and the assessment in such a case would be valid even if the materials, on the basis of which the earlier assessing authority passed the order and the successor assessing authority proceeded, were same. The question still is as to whether in the present case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dian Eastern Newspaper Society, New Dehi Vs. Commissioner, reported in (1979) 4 SCC 248, has held as under:- "11. Whether it is the internal audit party of the Income Tax Department or an audit party of the Comptroller and Auditor- General, they perform essentially administrative or executive functions and cannot be attributed the powers of judicial supervision over the quasi-judicial acts of income tax authorities. Nor does section 16 of the Comptroller and Auditor-General's (Duties, Powers and Conditions of Service) Act, 1971 envisage such a power for the attainment of the objectives incorporated therein." (Emphasis supplied). "12. But although an audit party does not possess the power to so pronounce on the law, it nevertheless may draw the attention of the Income Tax officer to it. Law is one thing, and its communication another. If the distinction between the source of the law and the communicator of the law is carefully maintained, the confusion which often results in applying section 147(b) may be avoided. While the law may be enacted or laid down only by a person or body with authority in that behalf, the knowledge or awareness of the law may be communicated by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessing authority to initiate re-assessment proceeding on the dictate of the Audit Party which, on the face of discussions held above, would amount to abdication of jurisdiction of the assessing authority being a quasi-judicial body to external dictates, which would be contrary to the ratio laid down by the Judgment of Hon'ble Apex Court in the case of Indian Eastern Newspaper Society, New Dehi (supra) and in the case of Larsen and Toubro (supra). 49. It is in the aforesaid backdrop; we are required to examine as to whether Section 42(3) is an independent provision conferring power of re-assessment or is merely as additional ground conferred under the Act upon the assessing authority for carrying out re-assessment proceedings. 50. It is settled law that a statutory term is recognized by its associated word and its colour and content are to be derived from their context. Hon'ble Supreme Court in the case of Maharashtra University (supra), vide Para 27 and 28, has held as under:- "27. The Latin expression "ejusdem generis" which means "of the same kind or nature" is a principle of construction, meaning thereby when general words in a statutory text are flanked by restricted wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the assessing authority to initiate re-assessment proceeding pursuant to receipt of audit objection being contrary to the very basic structure of exercise of power of quasi-judicial authority, as vires of Section 42(3) is not under challenge before us. 54. At this stage, we may further record the arguments advanced by learned Advocate General by referring to Section 42(3) of the Act wherein it was argued that Section 42(3) enables initiation of re-assessment proceeding not only of completed assessment proceeding, but also of completed re-assessment proceeding. It has been argued that Section 42(3) even enables the assessing authority to initiate fresh re-assessment proceeding pursuant to audit objection in case of an Assessee against which earlier re-assessment order has already been passed. In our opinion, said argument of learned Advocate General is again in the teeth of the scheme of JVAT Act, as, under the JVAT Act, there is no provision for initiation of re-assessment proceeding against a re-assessment order and only remedy, thereafter, is to prefer appeal or revision. If the assessing authority is allowed to initiate repeated re-assessment proceeding against an Assessee m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our opinion, while incorporating provision of Section 42(3), the Legislature, in its wisdom, had not sought to extend the period of limitation by inserting non-obstante clause. 56. Issue No. (iv) :- The next question to be adjudicated is "Whether in view of suo-motu extension of limitation orders passed by Hon'ble Apex Court, the period of limitation for initiating re-assessment proceedings also stood extended or not?". Learned Advocate General has referred to various suo-moto orders passed by Hon'ble Apex Court, including orders dated 23.03.2020, 08.03.2021, 27.04.2021, 23.09.2021 and the order dated 10.01.2022. Learned Advocate General emphasized on the order dated 10.01.2022 passed by Hon'ble Apex Court and contended that the period from 15.03.2020 to 28.02.2022 would stand excluded for the purpose of limitation prescribed under any general or special law in respect of all judicial and quasi-judicial proceedings and re-assessment proceedings being quasi-judicial proceedings, the period of limitation would stand extended for passing of the re-assessment orders. Per contra, as already referred above, Mr. Sumeet Gadodia, Counsel for the Petitioner has invited our attention to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions such as scrutiny of returns, issuance of summons, search, enquiry or investigations and even consequential arrest in accordance with GST law would not be covered by the judgment of the Hon'ble Supreme Court. (vi) As regards issuance of show cause notice, granting time for replies and passing orders, the present Orders of the Hon'ble Supreme Court may not cover them even though they are quasi-judicial proceedings as the same has only been made applicable to matters relating to petitions/applications/suits, etc." 57. A bare perusal of the said Circular would reveal that CBIC, in exercise of its power under Section 168A of CGST Act, has issued the said guidelines which was deliberated in 43rd meeting of the GST Council and in the said guidelines, it was clearly noted that the orders of Hon'ble Supreme Court only apply to quasi-judicial and judicial matters relating to petitions/ applications/suits/appeals/all other proceedings and not to original adjudication proceedings. In fact, the Parliament has enacted the 'Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and, under the said Act, provisions were incorporated extending the period of limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunals across the country including this Court." After recording the aforesaid, Hon'ble Apex Court, vide Para 17 of its Judgment, has held as under:- "17. The limitation for filing petitions/applications/suits/appeals/ all other proceedings was extended to obviate lawyers/litigants to come physically to file such proceedings in respective Courts/Tribunals. The order was passed to protect the litigants/lawyers whose petitions/applications/suits/appeals/all other proceedings would become time barred they being not able to physically come to file such proceedings. The order was for the benefit of the litigants who have to take remedy in law as per the applicable statute for a right. The law of limitation bars the remedy but not the right. When this Court passed the above order for extending the limitation for filing petitions/applications/suits/ appeals/all other proceedings, the order was for the benefit of those who have to take remedy, whose remedy may be barred by time because they were unable to come physically to file such proceedings. The order dated 23.03.2020 cannot be read to mean that it ever intended to extend the period of filing charge sheet by police as contemplate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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