Antedated Assessment Orders held as non est and beyond the limitation period provided u/s 23 of the Maharashtra Value Added Tax Act, 2002
S.S. Traders Versus The State of Maharashtra (Maharashtra Sales Tax Tribunal)
BENCH-I
Office of the Maharashtra Sales Tax Tribunal,
Vikrikar Bhavan,7th floor, Mazgaon,
Mumbai 400010
Appeal No. VAT SA 342-343/2017
Application
To,
M/S. M/S. S S Traders
MUMBAI
ADV/CA:
Sir,
I forward herewith a true copy of the judgment passed by the tribunal in the above case.
Yours faithfully,
Assistant
Assistant Registrar,
Maharashtra Sales Tax Tribunal,
Mumbai
1) Copy for information alongwith copy/copies of Judgment forwarded to the Deputy Commissioner of Sales Tax (Legal), Maharashtra State , Mumbai.
2) Deputy Commissioner of Sales Tax (Appeal)………….. /Assistant Commisioner of Sales Tax(Appeal) …………………. / No. DC (Appl.) ……………. / AC (Appl.)……………………………………
(Per Shri. S. V. Mane, President)
The present appeals are preferred by the Appellant for the Period 2006-07 and 2007-08 under the Maharashtra Value Added Tax Act, 2002 (MVAT Act) against the Orders passed by the Deputy Commissioner of Sales Tax, (Appeals-VI), Mumbai (First Appellate Authority). The First Appellate Authority has rejected the said appeals with reason that the appeals were not filed within the prescribed time limitation as per the MVAT Act.
2. Shri. Ratan Samal, learned Advocate appeared on behalf of the Appellant and Shri. Mahesh Kale, learned. Assistant Commissioner of State tax (Legal) appeared on behalf of the Respondent.
FACTS OF THE CASE
3. The Appellant is a registered dealer under the MVAT Act involved in the business activity of trading in iron, steel and other products such as ball bearings, etc. The Appellant claimed that it has filed all its returns and has discharged tax liability due as per such returns. Since the Appellant is required to file quarterly returns, such returns for all four quarters were filed along with the Audit Report as required u/s 61 of the MVAT Act. The Appellant had claimed input tax credit on tax paid purchases for the Periods 2006-07 and 200708. After adjustment of the input tax credit, the balance tax due as per returns has been paid by the Appellant for both the Periods.
4. The assessments ,;of the appellant for.. the Period 2006-07 and, 2007-08 were, completed u/s 23(3) of the MVAT Act on best judgement by the Sales Tax Officer (C-929), Issue eased Audit, Mumbai (Assessing Officer) by passing orders dated 20/03/2014 and 30/08/2014 respectively. The Assessment/ order dated 20/03/2014 passed for the year 2006-07 was resulted in to total demand, of Rs.23,13,125/- which comprising of tax demand of Rs. 10,80,728/-,interest of Rs.12,27,397/- and penalty of Rs. 5000/. Similarly, the Assessment Order dated 30/08/2014 passed by for the year 2007-08 was resulted in to total demand of Rs. 27,53,470/- comprising tax demand of Rs. 13,92,046/- and interest demand of Rs. 13,61,424/-.
5. Being Aggrieved with the said assessment orders, the Appellant has filed appeals before the Deputy Commissioner of Sales Tax (A -al-VI), Mumbai on 29/05/2015. In the Statement of Facts submitted before the First Appellate authority, it was contended that the assessment orders dated 20/03/2014 for the period 2006-07 and dated 30/08/2014 for the Period 2007-08 were not at all served on the Appellant. When the recovery proceedings were initiated against the Appellant, then he has made an application to the Assessing Officer for issuing certified copies of both the assessment orders. Accordingly, the certified copies of the assessment orders were received by the Appellant on 29/05/2015. The appeals were filed on 29/05/2015.
6. It was contended by the Appellant before the First Appellate Authority that the assessment orders were received by him on 29/05/2015 and before that date no such assessment orders were served to him. It was further, contended that the date 29/05/2015 is to be treated as the actual date of service of assessment orders. It is required to file ‘an’ appeal within 60 days from the service of the assessment Order against which appeal is to be made As the date of service of orders were on 29/05/2015 and the appeals were filed on the same day i.e 29/05/2015, the filling of ‘appeals before the First Appellate Authority was well within the time of limitation. It is tended by the ‘Appellant that the first Appellate, Authority had not considered the submission made by the Appellant in this regard. The first Appellate Authority, though after verification of the assessment record pertains to the periods in question, had not considered the submission made before him and not considered the fact that there was no delay in filling of appeal and rejected the appeals filed before him by orders dated 24/01/2017. Being aggrieved with the appeal orders passed by the First Appellate authority the Appellant has filed the present set of Second Appeals before this Tribunal.
ARGUMENTS ON BEHALF OF THE APPELLANT
7. Ratan Samal, learned Advocate appeared on behalf of the Appellant for the Appellant submitted that, during the course of proceedings in first appeal, it was argued before the First Appellate Authority that the Assessment Orders were never served to the Appellant up to 29/05/2015. The said assessment orders and related demand notices are received by the Appellant only when the Appellant made an application subsequent to initiation of recovery proceedings initiated by the Assessing Officer. The Advocate for the Appellant contended that recovery proceedings were issued after 1 year, i.e., on 20/05/2015 even though it has been claimed that the Assessment Orders were passed on 20/03/2014 and 30/08/2014 for the period 2006-07 and 2007-08. This would mean that the Assessment Orders were not really passed on such dates because in case the Orders were passed on the dates being claimed by the Assessing Officer, then recovery proceedings would have been issued at a much earlier date. However, since the Assessment Orders were neither .passed on the claimed dates nor served to the Appellant, they were antedated in order to revive time-barred assessment proceedings.
8. Shri Ratan Samal, learned Advocate for the Appellant contended that before’ the First. Appellate Authority, a detailed statement of Facts and Grounds of Appeal was raised. In the Statement of Facts, it was contended-that Order dated 20/03/2014 for the Period 2006-07 and 30/08/2014 for the Period 2007-08 was not at all served on the Appellant. When bank attachment and coercive recovery proceedings were initiated, then he has made an application to the Assessing Officer to issue Certified copies of the Orders. Accordingly, Order was issued on 29/05/2015. Therefore, the present appeals were filed on 29/05/2015 itself, which was within the time limit. However, the First Appellate Authority has chosen to ignore such factual aspects and the submission made by the Appellant were side-tracked and had observed that there is a delay of 212 days. Although in the Appeal Orders he has mentioned that Appellant has claimed that the orders passed by the Assessing Officer are antedated and was not served on the Appellant, and based on request of the Appellant the certified copies were issued to him, then it is the duty of the First Appellate Authority to consider the facts on the record. In fact, the learned Advocate has claimed that the Assessment records were called by the First Appellate Authority but there is no evidence in respect of service of Order available.
9. Shri. Samal, the learned Advocate further contended that he took inspection of records, both at the stage of first appeal as well as before us. There is no proof available in respect of service of assessment orders prior to 29/05/2015. Hence, he contended that First Appellate Authority erred in saying that there is a delay in making the appeals. In fact, it is the duty of the First Appellate Authority, he, Should have have declared as null and void and antedated and would have been declared as time-barred assessment when he had verified the assessment record. He argued that it appears that to safeguard the Assessing Officer, the first Appellate Authority has observed in such manner and rejected the appeals. Therefore, the learned Advocate requested that the present appeal should be considered on the ground of antedated, non-service of the Order and time-barred issue. He has detailly narrated the facts on record.
10. The Advocate for the Appellant contended that during Stay proceedings before this Tribunal, the Departmental Representatives were granted several opportunities to produce the evidence of service of the impugned Assessment orders on the Appellant but no such evidence was produced. It was further stated by Shri. Samal that since the Departmental Representatives were not able to bring anything on record which showed that the Assessment Orders were served on the Appellant, this Tribunal granted an absolute Stay vide Order dated 06/11/2017 with an observation as under:
“2. Stay application is taken for hearing today. The main contention of the appellant is that the assessment order is not passed within the prescribed period of limitation. We have heard Shri Ratan Samal, learned Advocate on behalf of the appellant. He contended that, in order to prove that the order is passed within the prescribed period of limitation, it is required to be proved by the Department that the Assessment order was served on the appellant. He brought to our notice that, on three different occasions’ the Department was directed to produce proof of service of assessment order on the appellant’. Within reasonable time from the date of Assessment order. In spite of giving sufficient opportunity to the Department, the Department has failed, to produced such proof.
3. In such circumstances, the appear will have to be admitted without passing any order of part payment, since the validity of Assessment order itself is in challenge. We therefore, pass the following order:
ORDER
Ad- interim relied granted in favour of the appellant shall continue till final disposal of the appeal.”
11. Shri Ratan Samal brought our attention to the provision of sub- section (3) of Section 23 and sub- section (3A) of Section 23 of MVAT Act, 2002 which read as under:
“23. Assessment.-
(1)…..
(2)…….
(3) Where a registered dealer has not filed a return in respect of any period by the prescribed date, then the Commissioner may, serve on the dealer a notice requiring him to attend on a date and at a place specified therein and after giving the dealer a reasonable opportunity of being heard, proceed to assess, to the best of his judgment, the amount of tax due from him
Provided that, no order of assessment under this sub- section shall be made after the expiry of five years from the end of the year containing the said period.
(3A) Notwithstanding anything contained in sub- section (2) or sub- section (3), an order of assessment, in respect of any period ending on or before the 31st March, 2008 may be made under the respective provisions within a period of seven years, from in the end of the year containing said period.
Provided that, in respect at the period commencing on or after the 1st April 2005 and ending on or before the 31st March, 2006, an order 0f assessment under the respective provisions may be made on or before the 30 June, 2013.”
12. The learned Advocate further submitted that as per sub-section (3A) of Section 23 of the MVAT Act, 2002, the Assessment proceedings were supposed to be completed by 30th March, 2014 for the Period 2006-07 and by 30th March, 2015 for the Period 2007-08. It was further contended that Rule 87 of the MVAT Rules, 2005 stipulates the mechanism of service of Orders and Notices and as per this Rule, Orders are required to be served by hand delivery or by post or courier or by sending a scanned copy or an electronically generated and digitally signed copy. In case, service through all of the above modes are not possible, then Rule 87 prescribes that service must be made by affixing the Order or Notice at the regular place of business.
13. The Advocate for the Appellant stated that since the Assessment Orders for 2006-07 and 2007-08 were passed physically, it had to be served by hand delivery. However, no acknowledgement has been brought on record by the Departmental Representative till date to show that service of the Assessment Orders had taken place, despite several opportunities having been given to them during the appeal hearings before this Tribunal. Shri. Samal further stated that in fact, on 30th July 2021 he had also prayed before this Tribunal that the Departmental Representative may be directed to either produce an acknowledgement of service or in alternate make a statement in this regard. But, none of the above seem to have been complied till from the Department.
14. It was argued by the learned Advocate that merely in order to come out from the clutches of limitation, the Assessing Officer had antedated the Assessment Orders and therefore the Departmental Representative could not bring any documentary evidence on record to show that actual service of the Assessment Orders for 2006-07 and 2007-08 had taken place on the dates being claimed by the Assessing Officer. Mr. Samal contended that he had inspected the records which clearly show the DBA (Daily Book of Assessment) is maintained and in the entry of the present Order, blank space was left for the concerned month of March 2014 was left which was subsequently filled with lots of erasing and rewriting which clearly showed that the dates were manipulated.
15. Shri. Samal, learned Advocate has relied on various judgments of the Hon’ble Supreme Court and Hon’ble High Courts and our own Tribunal. Shri. Samal has relied on Hon’ble Supreme Court of India’s judgment in State of A.P. vs. M. Ramaishtaiah, (1994) 93 STC 406 wherein it was held as under:
“An assessment order passed in September, 1969, was sought to be revised by the Deputy Commissioner under section 20(2) of the Andhra Pradesh General Sales Tax Act, 1957. He passed an order prejudicial to the assessee. The order was said to have been made on January 6, 1973, but it was served after the expiry of four years from the date of the assessment order, on the assessee on November 21, 173, 10 and a half months later. There was no explanation by the Deputy Commissioner why the service of the order was so delayed:
Held that, in the absence of any explanation whatsoever, the court must presume that the order was not made on the date it purported to have been made and that it could have been made after the expiry of four years prescribed for passing such an order in revision. The order was bad.”
16. In the matter of Ankita Impex vs. State of Maharashtra, MVXA/1/2014 dated 23rd January 2015, it was held by Hon’ble Bombay High Court that, “one of the modes of Rule 87 of the MVAT Rules has to be adapted by the authorities in servicing the notice or orders and in the opinion that the order or notice cannot be served by any of the modes prescribed under Rule 87 then he can resort to other modes prescribed and which inter alia is affixing of such notice on the premise or office of the dealer. The authorities including the Tribunal ought to have been satisfied that the notice could not be Tax Officer failed to show the order on 16th January 2001 if he had really passed the said order. Again, despite writing letter on 23rd January 2001 and requesting copies of the Assessment Order, the same were neither shown to him nor given to him. Not only that, no counter affidavit has been filed yet against the averments made by the Appellant in that behalf on 19th March, 2001. There is absolutely no doubt in our mind that the orders are antedated. This is highly objectionable. It is unfortunate that it has been repeatedly noticed by the Tribunal that there is a tendency amongst some of the officers to pass such antedated order in order to avoid being cut in the clutches of the law of limitation. Such conduct on the part of the responsible officer of the Government cannot be turned down simply as negligence but it amounts to fabricating Government records to save his own skin and it A criminal in nature. The commissioner of sales tax is expected took into such; Mischievous action taken on the part of the Assessing Officers.”
19. Shri. Samal then, relied on the judgment of Hon’ble Allahabad High Court in Rohtash Sweets Fast Food vs. Deputy Commissioner of Commercial Tax, (2019) 65 GSTR 107 (All.)
