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TMI Blog2024 (5) TMI 1173X X X X Extracts X X X X X X X X Extracts X X X X ..... iness assessable to tax for the assessment period from 2009-2010 has escaped assessment as the petitioner has failed to deposit VAT on transmission charge amounting to Rs. 103,05,23,595/- as the same was clearly part of the sale price and therefore proposes to re-assess the petitioner for the aforesaid period under Section 40 of the said Act, 2003. 4. The petitioner vide letter dated 25.10.2017 submitted its reply. 5. Thereafter the assessing authorities by order dated 17.3.2018 re-assessed the petitioner under Section 40 of the Act, 2003 and came to a finding that the petitioner is liable to pay Rs. 21,85,79,385.00/- as penalty. 6. Accordingly, notice of demand was issued on 17.3.2018 by the respondent No. 3 to the petitioner for making payment of Rs. 21,85,79,385.00/-. The aforesaid re-assessment order and notice of demand are challenged before this Court. 7. Dr. A. Saraf, learned Senior Counsel for the petitioner submits that though the re-assessment has been shown to have been completed under Section 40 of the Act, 2003 but in fact the same is under audit assessment under Section 36 of the Act, 2003 and since the assessment under Section 36 became barred by limitation, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment of tax: (1) Every registered dealer and every dealer liable to pay tax shall furnish a correct and complete tax return in such form for such period, by such dates and to such authority, as may be prescribed; Provided that different periods may be prescribed for different classes of dealers for the purpose of filing tax return. (2) Every registered dealer and every dealer liable to pay tax shall furnish, in addition to the tax return, if any, furnished under sub-section (1), a correct and complete annual return in the prescribed form within such time as may be prescribed. (3) If the Prescribed Authority has reason to believe that the turnover of sales or the turnover of purchases of any dealer has exceeded the taxable limit as specified in sub-section (6) of section 7, so as to render him liable to pay tax under this Act for any year or part thereof, he may, by notice served in the prescribed manner, require such dealer to furnish tax return under sub-section (1) and an annual return under sub-section (2) as if he were a registered dealer. (4) If any dealer having furnished a tax return or an annual return under this section, discovers any omission or any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii) Section 39 of the ACT, 2003 provides that "39. No assessment after five years.- no assessment under the foregoing provisions of this Act, shall be made after the expiry of five years from the end of the year to which the assessment relates: Provided that in case of offence under this Act for which proceedings for prosecution has been initiated, the limitation as specified in this sub-section shall not apply." iv) Section 40 of the ACT, 2003 provides that "40. Turnover escaping assessment: (1) Where after a dealer is assessed under section 34, 35, 36 or 37 of this Act for any year or part thereof, the Prescribed Authority has reason to believe that the whole or any part of the turnover of the dealer in respect of any period has,- (a) escaped assessment; or (b) been under assessed; or (c) been assessed at a rate lower than the rate at which it is assessable; or (d) been wrongly allowed any deduction therefrom; or (e) been wrongly allowed any credit therein. The Prescribed Authority may, after giving the dealer a reasonable opportunity of being heard and after making such enquiries as he considers necessary, proceed to assess to the best of hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 29/ 2003/25 dated 4-11-2006 w.e.f. 14-11-2006. (3) The tax return shall be accompanied by a receipt from the Designated Bank, a crossed cheque or a crossed demand draft for the full amount of tax payable on his taxable turnover during the month or the quarter to which the return relates. Explanation - For the purpose of Explanation 2 to clause (b) of sub-section (1) of Section 10, the challans for payment of tax received by a bonded warehouse from a retail licence holder or by a excise warehouse from a retail vendor, shall also form part of the full amount of tax payable on the taxable turnover of such bond or warehouse for the month to which the tax return relates. (4) If the amount paid by a dealer along with the tax return under sub-rule (1) or (2) or (2A) or (2B), is less than the amount of tax payable by him, the Prescribed Authority shall serve a notice of demand and the dealer shall pay the sum demanded in the said notice within the time and in manner specified in the notice. Amendment: In between the existing numeral "(2)" and the punctuation mark ",", the words and bracket "or (2A) or (2B)" have been inserted vide notification No. FTX. 29/2003/25 dated 4-11-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax return or annual return filed, the dealer may furnish a revised tax return or the revised annual return, as the case may be, within a period of six months from the due date of submission of tax return or annual return, as the case may be : Provided that, no revised tax return or revised annual return shall be entertained if the case has been taken up for audit assessment and notice to that effect has already been served on the dealer. (9) Omitted. Amendment: Sub-rule (9) has been omitted vide notification No. FTX. 29/ 2003/25 dated 4-11-2006 w.e.f. 14-11-2006. Prior to its omission, it read as under: "(9) A dealer, opting for composition scheme under Section 20, shall be liable to pay tax quarterly. Such dealer shall make the payment by challan into a Designated Bank within twenty one days of the succeeding month from the date of expiry of each quarter." 11. Section 29 of the Act, 2003 provides that every dealer has to furnish periodical returns within the prescribed time. Rule 17 of the said Rules, 2005 provides that such return for each month has to be filed within the next 21 days of the succeeding month. 12. Section 35 of the said Act, 2003 deals with self-ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod from April 2009 to March 2010 is also given in paragraph 5 of the writ petition which is hereunder:- "5. That the petitioner thereafter submitted its revised returns for the period from April 2009 to March 2010 as per the details given below: Return period Date of filing of original return Date of filing of revised return April 2009 12.06.2009 13.04.2011 May 2009 01.07.2009 13.04.2011 June 2009 28.07.2009 13.04.2011 July 2009 07.09.2009 13.04.2011 August 2009 06.10.2009 13.04.2011 September 2009 31.10.2009 13.04.2011 October 2009 03.12.2009 13.04.2011 November 2009 04.01.2010 13.04.2011 December 2009 01.02.2010 13.04.2011 January 2010 08.03.2010 13.04.2011 February 2010 26.03.2010 13.04.2011 March 2010 30.04.2010 13.04.2011 The petitioner also submitted its annual return for the year 2009-2010 alongwith the said revised return on 13.04.2011." 14. From the aforesaid chart, it further appears that the revised returns were filed on 13.04.2011 i.e. after expiry of two months prescribed in Rule 17 (5) (a) of the said Rules, 2005 and as such the said revised returns were also not submitted within the prescribed time and therefore, no se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creation require any fact so admitted to be proved otherwise than by such admission." These three rules form an integrated code dealing with the manner in which allegations of fact in the plaint should be traversed and the legal consequences flowing from its non-compliance. The written statement must deal specifically with each allegation of fact in the plaint and when a defendant denies any such fact, he must not do so evasively, but answer the point of substance. If his denial of a fact is not specific but evasive, the said fact shall be taken to be admitted. In such an event, the admission itself being proof, no other proof is necessary. The first para of Rule 5 is a reproduction of Order 19, Rule 13 of the English rules made under the Judicature Acts. But in mofussil Courts in India, where pleadings were not precisely drawn, it was found in practice that if they were strictly construed in terms of the said provisions, grave injustice would be done to parties with genuine claims. To do justice between those parties, for which Courts are intended, the rigor of Rule 5 has been modified by the introduction of the proviso thereto. Under that proviso the court may, in its discreation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al denials of the allegations contained in the previous pleadings without stating the circumstances. As far as I am concerned, I mean to give the fullest effect to that rule. I am convinced that it is one of the highest benefit to suitors in the court". It is true that in England the concerned rule is inflexible and that there is no proviso to it as is found in the Code of Civil Procedure. But there is no reason why in Bombay on the original side of the High Court the same precision in pleadings shall not be insisted upon except in exceptional circumstances. The Bombay High Court, in Laxminarayan v. Chimniram Girdhari Lal construed the said provisions and applied them to the pleadings in a suit filed in the court of the Joint Subordinate Judge of Ahmednagar. There, the plaintiffs sued to recover a sum of money on an account stated. For the purposed of saving limitation they relied in their plaint upon a letter sent by the defendant firm. The defendants in their written statement stated that the plaintiff's suit was not in time and that "the suit is not saved by the letter put in from the bar of limitation". The question was raised whether in that state of pleadings the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as against a person under disability: Provided that the court may in its discretion require any fact so admitted to be proved otherwise than by such admission. (2) Where the defendant has not filed a pleading, it shall be lawful for the court to pronounce judgment on the basis of the facts contained in the plaint, except as against a person under a disability, but the court may, in its discretion, require any such fact to be proved. (3) In exercising its discretion under the proviso to sub-rule (1) or under sub-rule (2), the court shall have due regard to the fact whether the defendant could have, or has, engaged a pleader. (4) Whenever a judgment is pronounced under this rule, a decree shall be drawn up in accordance with such judgment and such decree shall bear the date on which the judgment was pronounced." 13. Thus, if a plea which was relevant for the purpose of maintaining a suit had not been specifically traversed, the court was entitled to draw an inference that the same had been admitted. A fact admitted in terms of Section 58 of the Evidence Act need not be proved." 17. The respondent assessing authorities having not denied the averments in paragraphs 4 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. Therefore, assessment for the year 2009 - 2010 ought to have been completed within 5 years from the end of the year in respect of which the assessment relates. In terms of Section 39 of the said Act, 2003, assessment for the assessment year 2009 - 2010 got barred by limitation on 31.3.2015. Since, the time limit for completion of assessment as in terms of Section 39 of the Act expired on 31.03.2015, it appears that the assessing authority did not complete assessment within the prescribed time period. However, assessment was initiated under Section 40 of the Act without completion of assessment under Sections 34, 35, 36 or 37 of the Act, 2003. Section 40 of the Act, 2003 dealing with turnover escaping assessment provides that for invoking the powers under Section 40 of the Act, a dealer must have been assessed under Section 34, 35, 36 or 37 of the Act, 2003 for any year or part thereof. 25. Since in the facts of the instant case, no self assessment can be deemed under Section 35 of the Act, 2003 re-assessment under Section 40 of the said Act, 2003 could not have been made under the provisions of the said Act. 26. Section 40 of the Act, 2003, dealing with turnover escaping asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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