prpri Jharkhand VAT: Period of limitation to appeal against assessment order JVAT: Period of limitation to appeal against assessment order commences from date of service of demand notice, not from date of assessment order

Case Law Details

Case Name : Anand Lubricating & Pneumatic Systems Vs State of Jharkhand (Jharkhand High Court)
Appeal Number : W.P. (T) No. 4175 of 2018
Date of Judgement/Order : 04/06/2021
Related Assessment Year :

Anand Lubricating & Pneumatic Systems Vs State of Jharkhand (Jharkhand High Court)

Conclusion: Orders of assessments were a quasi-judicial order passed after hearing of assessee, followed by issuance of demand notices as per the provision of JVAT Act itself and assessee had statutory remedies against the orders of assessments whose limitation commence from the date of receipt of the demand notices and not from the date of the assessment orders

Held: Assessee was a dealer registered under the provisions of Jharkhand Value Added Tax Act, 2005 (JVAT Act, 2005) and Central Sales Tax, Act, 2006 (CST Act, 1956). It filed application for surrender of the registration certificates before the Commercial Tax department w.e.f. March, 2015. It was regularly filing its returns to the respondent-Commercial Tax department and its regular assessment proceedings were completed. However, for the assessment years, 2009-10 and 2010-11, assessee was neither communicated the copy of the assessment orders, nor copy of the demand notices till July 2018 for both under Central Sales Tax (CST) as well as Jharkhand Value Added Tax Act, 2006 (JVAT). Assessee was served with four demand notices for the assessment years, 2009-10 and 2010-11 , both CST and JVAT through e-mail on 03.08.2018 wherein the date of payment had been notified as 13.08.2018, i.e., after expiry of more than four years from the alleged date of demand notices. It was argued that the aforesaid action of respondents demonstrated that the assessment proceedings including impugned the assessment orders and demand notices were antedated which had been done by manipulating the records and consequently, the assessments having been done beyond the statutory period, though antedated, were void ab initio. Admittedly, assessee was served with four demand notices for the years 2009-10( JVAT and CST) and 2010-11 ( JVAT and CST) for the first time on 03.08.2018. The demand notices as well as the assessment orders under CST as well as JVAT for both the years were under challenge in these writ petitions alleging ante-dating to save period of limitation. It was held that the orders of assessments were a quasi-judicial order passed after hearing of assessee, followed by issuance of demand notices as per the provision of JVAT Act itself and assessee had statutory remedies against the orders of assessments whose limitation commence from the date of receipt of the demand notices and not from the date of the assessment orders. In the present cases the order sheets revealed that the date on which the impugned orders of assessments were passed, assessee not only appeared through an advocate but even its liability was quantified and mentioned in the order sheets after passing the orders of assessment in separate sheets thus, the writ petition filed by assessee was dismissed.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

1. Heard Mr. Sumeet Gadodia, learned counsel appearing on behalf of the petitioner.

2. Heard Mr. Sachin Kumar, learned A.A.G. appearing on behalf of the respondents.

3. These writ petitions have been filed for the following reliefs: –

In W.P. (T) No. 4175 of 2018

“(i) For issuance of an appropriate writ(s)/ order(s)/ direction(s), including Writ of Certiorari, for quashing/setting aside the assessment order allegedly dated 12.03.2014 pertaining to the assessment year 2010-11 (VAT Proceeding) as contained in Annexure-3, and declaring the said assessment order being void ab-initio especially because the said assessment order has been passed antedated and beyond the period of limitation of three years as prescribed under the Jharkhand Value Added Tax Act, 2005;

(ii) For issuance of further appropriate writ(s)/ order(s)/ direction(s), including Writ of Certiorari for quashing/setting aside the Demand Notice bearing no. 7123 allegedly dated 12.03.2014 which has been served upon the petitioner on 3rd August, 2018, as contained in Annexure-2, directing the petitioner to make payment of disputed amount by 13th August, 2018 especially because the said demand notice has also been passed antedated and beyond the period of limitation as stipulated under the Jharkhand Value Added Tax, 2005;

(iii) For issuance of an appropriate writ(s)/ order(s)/ direction(s), including Writ of Mandamus directing the Respondent No. 1 to hold enquiry and fix responsibility upon the responsible officers for passing antedated order dated 12.3.2014 and initiate appropriate disciplinary proceeding against said officers in accordance with law.

In W.P. (T) No. 4178 of 2018

“(i) For issuance of an appropriate writ(s)/ order(s)/ direction(s), including Writ of Certiorari, for quashing/setting aside the assessment order allegedly dated 16.2.2013 pertaining to the assessment year 2009-10 (VAT Proceeding) as contained in Annexure-4, and declaring the said assessment order being void ab-initio especially because the said assessment order has been passed antedated and beyond the period of limitation of three years as prescribed under the Jharkhand Value Added Tax Act, 2005;

(ii) For issuance of further appropriate writ(s)/ order(s)/ direction(s), including Writ of Certiorari for quashing/setting aside the Demand Notice bearing no. 14232 allegedly dated 16.2.2013 which has been served upon the petitioner on 3rd August, 2018, as contained in Annexure-3, directing the petitioner to make payment of disputed amount by 13th August, 2018 especially because the said demand notice has also been passed antedated and beyond the period of limitation as stipulated under the Jharkhand Value Added Tax, 2005;

(iii)For issuance of an appropriate writ(s)/ order(s)/ direction(s), including Writ of Mandamus directing the Respondent No. 1 to hold enquiry and fix responsibility upon the responsible officers for passing antedated order dated 16.2.2013 and initiate appropriate disciplinary proceeding against said officers in accordance with law.

In W.P. (T) No. 4170 of 2018

“(i) For issuance of an appropriate writ(s)/ order(s)/ direction(s), including Writ of Certiorari, for quashing/setting aside the assessment order allegedly dated 12.03.2014 pertaining to the assessment year 2010-11 (CST Proceeding) as contained in Annexure-3, and declaring the said assessment order being void ab-initio especially because the said assessment order has been passed antedated and beyond the period of limitation of three years as prescribed under the Jharkhand Value Added Tax Act, 2005;

(ii) For issuance of further appropriate writ(s)/ order(s)/ direction(s), including Writ of Certiorari for quashing/setting aside the Demand Notice bearing no. 7124 allegedly dated 12.03.2014 which has been served upon the petitioner on 3rd August, 2018, as contained in Annexure-2, directing the petitioner to make payment of disputed amount by 13th August, 2018 especially because the said demand notice has also been passed antedated and beyond the period of limitation as stipulated under the Jharkhand Value Added Tax, 2005;

(iii) For issuance of an appropriate writ(s)/ order(s)/ direction(s), including Writ of Mandamus directing the Respondent No. 1 to hold enquiry and fix responsibility upon the responsible officers for passing antedated order dated 12.3.2014 and initiate appropriate disciplinary proceeding against said officers in accordance with law.

In W.P. (T) No. 4173 of 2018

“(i) For issuance of an appropriate writ(s)/ order(s)/ direction(s), including Writ of Certiorari, for quashing/setting aside the assessment order allegedly dated 16.2.2013 pertaining to the assessment year 2009-10 (CST Proceeding) as contained in Annexure-4, and declaring the said assessment order being void ab-initio especially because the said assessment order has been passed antedated and beyond the period of limitation of three years as prescribed under the Jharkhand Value Added Tax Act, 2005;

(ii) For issuance of further appropriate writ(s)/ order(s)/ direction(s), including Writ of Certiorari for quashing/setting aside the Demand Notice bearing no. 14233 allegedly dated 16.2.2013 which has been served upon the petitioner on 3rd August, 2018, as contained in Annexure-3, directing the petitioner to make payment of disputed amount by 13th August, 2018 especially because the said demand notice has also been passed antedated and beyond the period of limitation as stipulated under the Jharkhand Value Added Tax, 2005;

(iii) For issuance of an appropriate writ(s)/ order(s)/direction(s), including Writ of Mandamus directing the Respondent No. 1 to hold enquiry and fix responsibility upon the responsible officers for passing antedated order dated 16.2.2013 and initiate appropriate disciplinary proceeding against said officers in accordance with law.

4. Submissions on behalf of the petitioner

i. A common written submission has also been filed in these cases and it has been submitted that the facts of all the writ petitions are almost identical except with regards to certain list of dates.

ii. It has been submitted that the brief facts of W.P.(T) No. 4170 of 2018 relating to 2010-11, CST Proceeding are as under: –

Date Event
13.12.2013 Annexure-2, of WPT no. 4173 of 2018 Petitioner applied for complete order sheet with assessment order but was not communicated to the petitioner.
12.03.2014

Annexure-B   –    counter     affidavit

01.09.2018.

date Order sheet for the period in dispute wherein appearance of the petitioner was allegedly recorded and alleged assessment proceeding was completed on the said date itself.
12.03.2014 Demand notice allegedly issued vide process no. 7124 dated 12.03.2014.
January 2015 Petitioner closed his business
March 2015 annexure 1 and 1/1 Petitioner    surrendered     its    registration certificate to the department with effect from march, 2015.
03.08.2018
Annexure-2
Alleged demand notice dated       12.03.2014 served to the petitioner through e-mail by notifying the date of payment of demand as 13.08.2018.
Annexure-3 Petitioner immediately applied for certified copy of the assessment order and to its utter surprise the petitioner was communicated a copy of the assessment order alleged dated 12.03.2014.

iii. The impugned assessment order as well as demand notices allegedly dated 12.03.2014 are antedated as the same have been passed in utter violation of various provisions of Jharkhand Value Added Tax Act, 2005 as well as its corresponding Rules, details of which are stated herein below: –

On the point that the assessment is barred by limitation on 31.03.2014 and  antedating has been done to save the limitation.

(i) That as per Section 35(8) of the JVAT Act, 2005, assessment order is to be passed “within three years after the end of tax period in respect of which or part of which tax is assessable.”

(ii) Thus, for the period in dispute, the assessment order should be passed on or before 31.03.2014 but admittedly, demand notice allegedly dated 12.03.2014 has been served upon the petitioner on 03.08.2018 which itself demonstrates that the entire assessment proceeding including demand notice has been passed ante dated by manipulating the records by the respondent authorities.

On the point that there was no notice/knowledge about date of hearing on 12.03.2014 -the date of assessment order and demand notice.

(iii) From bare perusal of the entire order-sheet as annexed by the Respondents (Annexure-B, page-17 of counter affidavit in WPT No. 4170/2018) it would clearly evident that although appearance on behalf of the petitioner on 12.03.2014 has been recorded, and, assessment proceedings were allegedly completed on the said date, but, petitioner has no knowledge of passing of assessment order due to which the petitioner did not appear on the said date otherwise, he would have put his initial on the said date in the order sheet. Admittedly, such initial is missing in the records of the order-sheet. “Mere noting in the order-sheet by the Respondents is essentially an internal matter but it carries no legal sanctity until and unless it is communicated to the concerned person”. In this context, petitioner is placing reliance upon the decision of the Hon’ble Supreme Court passed in Pimpri Chinchwad new Township Vs. Vishnudev Cooperative Housing Society and ors. reported in (2018) 8 SCC 2015.

(iv) That further, Hon’ble Gujarat High Court in the case of Commissioner of Income Tax Vs. Dhatu Sanskar P. Ltd. reported in (2007) 292 ITR 135 has held that “ an order to be considered valid and effective, must be communicated to the person concerned, who is directly affected by that order and non-communication of an order, which is likely to have a detrimental effect upon the person concerned, would not only be arbitrary and, therefore, violative of the principles of natural justice, but would also make the order ineffective and incomplete.”

(v) Further, Hon’ble Apex Court in the case of M/s. Ajantha Industries & Ors. Vs. Central Board of Direct Taxes, New Delhi reported in (1976) 1 SCC 1001 has held that “non-communication of order is a serious infirmity and is invalid.”

(vi) It is categorically stated that no notice of hearing/proceeding fixing the date of hearing on 12.03.2014 was ever served to the petitioner. Even, in the counter-affidavits, Respondents have not annexed such notices evidencing the service of such notice to the petitioner.

On the point of delay in service of demand notice- no proper explanation  for the delay.

(vii) Under normal circumstances, 30 days’ time is fixed for payment of tax in terms of Section 43(4) read with Rule 27 of the JVAT Rules, 2006, but, in the instance case, admittedly, date of payment of demand has been fixed on 13.08.2018 i.e., after a lapse of 5 years from the date of assessment order which clearly establish the fact that impugned demand notice is antedated and completely contrary to the aforementioned provisions.

(viii) There is no proper explanation by the Respondents for such delay in service of notice to the petitioner which can be itself evident from the Counter-Affidavits filed by the Respondents.

(ix) Further, the statement of Respondents in counter affidavit is totally afterthought statement by stating that “it is a clerical error of non-dispatch of the demand notice which may have occurred due to inadvertence”.

(x) That in context of the above, petitioner is placing reliance of the decision of the Hon’ble Supreme Court passed in the Case of State of A.P. Vs. M. Ramaishtaiah reported in (1994) 93 STC 406 wherein under similar facts of the case, the Hon’ble Apex Court has held that “in absence of proper explanation for delay in service of notice, it shall be presumed that order has not been made on the date it purports to have been made”.

(xi) The aforementioned decision of the Hon’ble Supreme Court has been followed by the Hon’ble Odisha High Court passed in the Case of M/s. Delhi Foot Wear Vs. Sales Tax Officer & Ors. reported in (2015) 77 VST 146 and Hon’ble Jharkhand High Court in the case of M/s. Gaurang Alloys and Iron Ltd. Vs. The State of Jharkhand & Ors. Reported in (2013) 63 VST 354 (Jhar.)

(xii) Further, petitioner is placing reliance upon the judgment of Hon’ble Kerala High Court passed in the Case of Government Wood Works Vs. State of Kerala & Ors. reported in 1987 SCC Online Ker 697 wherein it has been held that “order of any authority cannot be said to be passed unless it is pronounced or published or the party affected has means of knowing it. It is not enough if the order is made, signed and kept in the file, because such order may be liable to change at the hands of the authority who may modify it or even destroy it, before it is made known, based on subsequent information, thinking or change opinion….”

(xiii) Further, Hon’ble Patna High Court in the case of M/s. Vaishali Flour Mills, Vs. The State of Bihar & Ors. reported in (1998) 70 STC 143 has held that “under taxing statute or other statute, the fundamental principles of justice requires that party whose rights are affected must have knowledge of it or had have an opportunity of knowing the order…..”

(xiv) For the period 2009-10, petitioner on 13.12.2013 had applied for certified copy of the entire order-sheets with assessment order, but, the same was never communicated to the petitioner which itself shows that orders were never passed and the assessment order is antedated and further afterthought explanation has been given by the Respondents in their counter-affidavit by stating that demand notice could not be communicated due to clerical error.

On the point of prejudice caused due to delay in service of demand notice

(xv) It is submitted that, if the impugned assessment orders and consequential demand notices are given effect then the petitioner would be not in position to avail its statutory remedy of appeal/revision and would be remediless in view of the following facts of the case: –

a) That Rule 38(3) of the JVAT Rules, 2006 prescribes for maintenance of records by a dealer for period of 5 years in respect of each assessment period. The said Rule has a direct correlation to the period of limitation as provided under Section 35 of the JVAT Act, 2005 as to facilitate a dealer objecting to an order of assessment to avail its statutory remedy.

b) The petitioner has already closed its business in the Month of January, 2015 and its records have been destroyed after the expiry of five years. Thus, petitioner would not be in a position to challenge the disputed demand for the period in dispute and would be remediless.

c) Under the Provisions of the JVAT Act, 2005, a dealer has remedy of challenging the assessment order before the following authority: –

Appeal before Joint Commissioner of Commercial Taxes, Dhanbad Division, dhanbad in terms of Section 79 of the JVAT Act, 2005 read with Rule 47 of the JVAT Rules, 2006 or,

Revision before Commissioner of Commercial Taxes, Jharkhand at Ranchi under Section 80 of the JVAT Act, 2005 read with Rule 47 of the JVAT Rules, 2006.

d) That as per aforesaid provisions, an assessee has to file its appeal within a period of thirty days from the date of communication of demand notice and similarly, for the revision, the limitation period is prescribed as ninety days and the filing of appeal/revision beyond such period is subject to showing of “Sufficient reasons” before the respective authority.

(xvi) That further, the impugned orders and demands have been given light of the day on 03.08.2018 and thus, the said date shall be deemed to be the effective date of the impugned order.

(xvii) Further, if a Right which is recognized by the State is violated then the state provides a remedy. The Legal Maxim Ubi Jus Ibi Remedium means “Where there is a right, there is a remedy”. But, in these cases the petitioner is remediless as the petitioner has already surrendered its registration certificate and is not in possession of the requisite documents. This would cause grave prejudice, if petitioner is compelled to reconstruct documents after expiry of almost 7 and 8 years of the expiry of period of limitation.

(xviii) That under, the aforesaid facts and circumstances of the case, the impugned assessment orders as well as the demand notices for the aforementioned periods are liable to be set aside by this Hon’ble Court.

Arguments of the Respondents.

5. Learned counsel for the respondents has submitted that similar facts are involved in all the cases. Oral as well as written submissions have been made with specific reference to writ petitions pertaining to the period 2009­-10. The submissions, in brief are as under:

i. That it transpires that the Demand Notice could not be served on the petitioner subsequent to passing of the assessment order by the then Assessing Officer posted in the circle during the period 2013.

ii. The Assessment order which was passed by the then Assessing Officer of Jharia Circle, Entry of the same was made in Register VI & Demand Notice pursuant to the said order was entered in the Process Register well within the time. the issued demand notice bearing serial no. 14232 and 14233 both dated 16.02.2013 was simply forwarded with a date for compliance as by 13.08.2018 (Annexure-B & C to the counter affidavit) through e-mail.

iii. In addition to above it is also worth mentioning that the petitioner’s advocate Sri A. Chakravarty appeared before the then Assessing Officer on 16.02.2013 (i.e date of assessment order and demand notice) with his Vakalatnama and was heard along with relevant documents of the petitioner. As per order sheet, partial hearing of the matter was already done by the then Assessing Officer on 04.02.2013 and then subsequently heard and concluded on 16.02.2013 after hearing the petitioner represented by its advocate Sri A Chakravarty and the Assessment order was passed in one Page on the same date i.e., on 16.02.2013 creating a demand of Rs. 6,85,770.00(CST) and Rs. 5,379.00 (VAT) with process No. 14232, 14233 dated 16.02.2013 which amounted to Rs. 6,91,149.00 (in VAT & CST).

iv. In the interest of Govt. Revenue demand notice was forwarded to petitioner’s e-mail on 03.08.2018 by the office of Jharia Circle of the answering respondents which is also mentioned in the order sheet dated 03.08.2018, so question of antedated Assessment order & demand Notice does not arise at all and also the Assessment order is well within the period of Limitation. The Assessment order dated 16.02.2013 was passed subsequent to two hearing on 04.02.2013 (Partial hearing) & 16.02.2013 & Demand was also raised on same date that is 16.02.2013 (Annexure-D,E & F).

v. That Section 51 of the JVAT Act is also relevant for the purpose of the present cases. The same reads as under”: “Period of limitation for Recovery of Tax-Notwithstanding anything contained in any law for the time being in force, no proceeding for recovery of any amount under sub sections (7) and (8) of Section 43 and sub section (6) of Section 47 shall be initiated after the expiry of twelve years from the date of the relevant assessment. Provided that when an appeal or revision has been filed, the period of limitation shall run from the date on which the amount due is finally determined.

vi. It would also be worthwhile to state herein that the Assessing Officer who passed the assessment order was transferred and relieved from the Jharia Circle on 15.09.2014 whereas the Assessment Order was passed on 16.02.2013. As such the aspersion made by the petitioner is unfounded. All the documents maintained in the office particularly Register VI & Process Register are showing the corresponding entry in continuity. At best it is a clerical error of non-dispatch of the demand notice which may have occurred due to inadvertence.

vii. The learned counsel for the Respondents has also relied upon para 34 of the judgement passed by the Hon’ble Supreme Court reported in (2008) 12 SCC 292 to submit that as a proposition of law, the burden of proving malafides is very heavy on the person who alleges it and this heavy burden is not discharged by the petitioner in the present case. The learned counsel has also relied upon the decision passed by Hon’ble Supreme court reported in (2010) 4 SCC 192, para 34, to submit that the court should insist upon furnishing of any tangible evidence by the petitioner in support of his allegation of “malus animus” laid against the state.

Findings  

6. It is not in dispute that the petitioner was a dealer registered under the provisions of Jharkhand Value Added Tax Act, 2005 (JVAT Act, 2005) and Central Sales Tax, Act, 2006 (CST Act, 1956) and the petitioner filed application for surrender of the registration certificates before the Commercial Tax department w.e.f. March, 2015 for which acknowledgements regarding submission of such applications have been annexed as annexure 1 and 1/1 of each of the writ petitions. The petitioner was regularly filing its returns to the respondent-Commercial Tax department and its regular assessment proceedings were completed.

7. However, for the assessment years, 2009-10 and 2010-11, the petitioner was neither communicated the copy of the assessment orders, nor copy of the demand notices till July 2018 for both under Central Sales Tax (CST) as well as Jharkhand Value Added Tax Act, 2006 (JVAT).

8. The petitioner was served with four demand notices for the assessment years, 2009-10 and 2010-11 , both CST and JVAT through e-mail on 03.08.2018 wherein the date of payment has been notified as 13.08.2018, i.e., after expiry of more than four years from the alleged date of demand notices.

9. The first point argued is that the aforesaid action of the respondents clearly demonstrates that the assessment proceedings including impugned the assessment orders and demand notices are antedated which has been done by manipulating the records and consequently, the assessments having been done beyond the statutory period, though antedated, are void ab initio. Learned counsel has also referred to Section 43(4) of the JVAT Act, 2005 read with Rule 27 of the JVAT Rules, 2006 to indicate that under normal circumstances, 30 days’ time is provided for payment of tax demand.

10. The second point argued is that the action of the respondents has caused serious prejudice to the petitioner. For this he has referred to Rule 38 (3) of JVAT, Rules to submit that a dealer is required to maintain the records for the period of five years in respect of each assessment year and accordingly the petitioner has not retained the records for the assessment years, 2009-10 and 2010-11 and under such circumstances the petitioner has been left remediless against the impugned assessment orders. It has been submitted that the petitioner is not in possession of any records or documents to contest the alleged demands raised by the impugned assessment orders as more than five years have elapsed from the end of the assessment years, 2009-10 and 2010-11.

11. Admittedly, the petitioner was served with four demand notices for the years 2009-10( JVAT and CST) and 2010-11 ( JVAT and CST) for the first time on 03.08.2018. The demand notices as well as the assessment orders under CST as well as JVAT for both the years are under challenge in these writ petitions alleging ante-dating to save period of limitation. It is not in dispute that the assessment orders were required to be passed within 3 years from the end of the concerned financial year.

12. The details of orders under challenge in the writ petitions are enumerated in following chart: –

S.No. Case No. Period Date of assessment order Alleged date of
Demand notice
Date of communication of  demand
notice
Period      of limitation for assessment expired on
1. W.P.(T) No.

4170 of 2018

2010-11,          CST Proceeding 12.03.2014 12.03.2014 03.08.2018 31.03.2014
2. W.P.(T) No.

4173 of 2018

2009-10,          CST Proceeding 16.02.2013 16.02.2013 03.08.2018 31.03.2013
0. W.P.(T) No.

4175 of 2018

2010-11,         VAT Proceeding 12.03.2014 12.03.2014 03.08.2018 31.03.2014
3. W.P.(T) No.

4178 of 2018

2009-10, VAT Proceeding 16.02.2013 16.02.2013 03.08.2018 31.03.2013

13. It is not in dispute that the assessment proceedings for CST and JVAT for each year are analogous, though separate assessment orders and proceeding sheets have been drawn.

Period 2009-10 (CST and JVAT)

14. For the period 2009-10, it is the specific case of the petitioner that on 13.12.2013 the Petitioner applied for complete order sheet with assessment order but the same was not communicated to the petitioner.

The period of limitation for completion of assessments expired on 31.03.2013 and the petitioner was communicated the demand notices for the first time in the year 2018.

Upon receipt of demand notices for the period 2009-10, both CST and JVAT, the petitioner applied for certified copies of the assessment orders and challenged the assessment orders and demand notices alleging antedating to save the period of limitation to pass the assessment orders which expired on 31.03.2013. The petitioner annexed the assessment orders and demand notices along with the writ petitions but the entire order-sheets were not annexed.

The assessment orders not only indicated appearance of the advocate of the petitioner during the assessment proceedings but also production of entire books of accounts and other documents which were duly accepted by the assessing officer for both CST and JVAT proceedings.

In the CST proceedings the assessing officer only rejected the claim of e-1 sales by the petitioner for want of statutory forms i.e. e-1 form and form C. Apart from that certain penalty was imposed on account of delay in statutory compliance.

In the JVAT proceedings the assessing officer only rejected the claim of sales return in absence of credit notes. Apart from that certain penalty was imposed on account of delay in statutory compliance/statutory non­compliance.

Period 2010-11 (CST and JVAT)

15. For the period 2010-11, it is the specific case of the petitioner that the petitioner on repeated occasion through its representative and/or its advocate enquired about the status of Assessment orders of the petitioner pertaining to the assessment year 2010-11, but all along the petitioner’s representative was informed that the assessment orders have not been passed.

The period of limitation for completion of assessments expired on 31.03.2014 and the petitioner was communicated the demand notices for the first time in the year 2018.

Upon receipt of this demand notices for the period 2010-11, both CST and JVAT, the petitioner applied for certified copies of the assessment orders and challenged the assessment orders and demand notices alleging antedating to save the period of limitation to pass the assessment orders which expired on 31.03.2014. The petitioner annexed the assessment orders and demand notices along with the writ petitions but the entire order-sheets were not annexed.

The assessment orders not only indicated appearance of the advocate of the petitioner during the assessment proceedings but also production of entire books of accounts and other documents which were duly accepted by the assessing officer for both CST and JVAT proceedings.

In the CST proceedings the assessing officer only rejected the claim of e-1 sales by the petitioner for want of statutory form C although e-1 forms were produced. Apart from that certain penalty was imposed on account of delay in statutory compliance.

In the JVAT proceedings the assessing officer recorded that apart from claim of e-1 sales, no other claim was made by the petitioner and the e-1 claim was to be considered in the CST proceedings. Apart from that certain penalty was imposed on account of delay in statutory compliance/statutory non-compliance.

16. Although the impugned orders of assessment, both for the period 2009-10 (CST and JVAT) and 2010-11 (CST and JVAT), record appearance of the counsel of the petitioner along with the books of accounts and other documents before the assessing authority for assessment on the date of hearing and conclusion of hearing and passing of the respective assessment orders on the same date , but this fact has not been disputed by the petitioner in the respective writ petitions. The impugned orders of assessments are not in the nature of ex-parte proceedings/orders.

17. In the counter affidavit, the State has brought on record, not only the attendance filed by the concerned Advocate on the date of assessment order, but also the entire order sheet of the assessment proceedings which records the appearance of the counsel even on the respective date of assessment orders and conclusion of hearing. The respective order-sheets indicate filing of attendance and records quantification of tax/ penalty and directs for issuance of demand notices after verification of the payments already made. The order sheets also record that the assessment orders have been passed in separate sheets. The assessment orders also record appearance of the counsel of the petitioner along with books of account of the petitioner and other documents which reflects passing of assessment orders after consideration of the books of accounts and other documents of the petitioner.

18. The petitioner has filed rejoinder in WPT NO 4173/18 relating to the period 2009-10 (CST) and in WPT NO. 4175 /18 relating to the period 2010-11 (VAT) and has submitted that although no separate rejoinders have been filed in other two cases , the aforesaid rejoinders may be treated as rejoinders for the respective analogous case of the same year and he has referred to the aforesaid two rejoinders to cover all the four cases.

19. In the rejoinders, the petitioner has stated that in order to confirm the appearance of the assessee or representative and/or Advocate on behalf of the assessee at the time of assessment proceedings, the Assessing Officer takes the signature of the said person on the margin of the order-sheet and in the instant case, there is no initial and/or no signature of the learned Advocate namely Shri A.K. Chakraverty, who is alleged to have appeared before the assessing Officer on the date of passing of the Assessment Order and accordingly his appearance cannot be accepted specially because of the fact that nobody had appeared on behalf of the petitioner-assesse on the said date.

20. The aforesaid stand of the petitioner as taken in the rejoinder is devoid of any merits as the impugned proceedings and assessment orders not only records the appearance of the counsel of the petitioner along with his attendance but also records production and examination of entire books of accounts of the petitioner along with statutory forms and documents produced on behalf of the petitioner. If the appearance of the petitioner through his counsel is negated then, as a corollary, it remains to be explained by the petitioner as to how the books of accounts/records of the petitioner were produced and considered at the time of assessments. The very fact that the books of accounts/records of the petitioner have been examined by the assessing authority at the time of passing the impugned orders of assessment, itself demonstrates the participation of the petitioner in the assessment proceedings through his counsel and absence of signature of the counsel on the margin of the order-sheet is of no consequence. Otherwise also , although the petitioner has annexed the impugned assessment orders with the writ petitions (which not only records the appearance of the counsel, but also records production of entire books of accounts and other documents as well as their examination by the Assessing Authority) , but the petitioner has nowhere stated that no notice for assessment was ever received by the petitioner and that no Advocate was authorized on behalf of the petitioner to appear before the assessing Authority and that the books of accounts and other documents of the petitioner were never produced before the assessing authority for consideration on the date of passing the assessment orders . After the respondents produced the attendance of the counsel who appeared before the Assessing Authority on the dates of assessments , the petitioner has tried to meet the same by filing rejoinder and completely denied the appearance of the petitioner/his counsel before the assessing authority , without explaining as to how the books of accounts etc. were examined by the assessing authority without their production by the petitioner/his counsel. As the petitioner is in complete denial about the participation of the petitioner /his counsel in the assessment proceedings, no affidavit of the concerned counsel has been filed to explain as to what happened in the assessment proceedings on the date of hearing. The order-sheets and the assessment orders clearly demonstrate that the assessment orders were passed on the same day as mentioned in the impugned orders of assessments. There is enough material on record, as indicated above, that the petitioner had appeared before the assessing Authority on the date of passing the assessments orders along with books of accounts and other documents through his counsel who also filed his attendance and the hearing was concluded and assessment orders were passed on the same date.

21. The fact that the petitioner applied for the entire order sheets as well as the assessment orders way back in the year 2013 for the financial year 2009-10 (both CST and JVAT) also indicates that the petitioner had knowledge that the proceedings have concluded and assessment orders were passed. What happened after filing of application for certified copies is not clear from the records, but, the fact remains that the petitioner also neither took any further steps nor raised any grievance in connection with non- issuance of certified copies. Mere non-issuance of certified copies, by itself, in the facts and circumstances of this case, do not indicate that the demand notices /assessment orders were ante-dated. It has also been mentioned that the assessing officer was himself transferred on 15.09.2014.

So far as the period 2010-11 (both CST and JVAT) are concerned, no application for certified copies were made immediately after conclusion of assessment proceedings and passing of the assessment orders but the petitioner has made a vague statement in the writ petition that the petitioner on repeated occasion through its representative and /or its advocate enquired about passing of the assessment order but all along the petitioner’s representative was informed that assessment orders have not been passed. It has been clearly stated in the counter affidavit relating to the period 2010­11 (both CST and JVAT) that the advocate of the petitioner appeared with attendance, books of accounts and other documents on 12.03.2014 on which date itself the assessment orders were passed. It has also been mentioned that the assessing officer was himself transferred on 15.09.2014.

22. In the present cases, the notices of demand have been communicated after expiry of the period of limitation for assessments but certainly within the period of limitation for recovery of demands. As per the order sheets , the notice for hearing for the purposes of assessment were issued under form JVAT 302 pursuant to which the petitioner appeared through his counsel with books of account and other documents /statutory forms but notice of demand was not issued to him, though they were prepared, corresponding entries were made in register VI and also in the dispatch register in continuity but were not dispatched to the petitioner and it has been stated in the counter affidavit that at best it is a clerical error of non- dispatch of the demand notices which may have happened due to inadvertence. It has also been mentioned in the counter affidavit that the headquarters of the respondent department issued a general order on 03.07.2018 with regard to pre-GST period cases pertaining to claim of refund and in course of examination of all cases the case of the petitioners came to light and an order dated 3.08.2018 was drawn which indicated that as per the records, the demand notices are not served and accordingly it was directed to serve the demand notices through e-mail fixing the date of payment dated 13.08.2018. It has also been mentioned in supplementary counter affidavit that the dealing clerk, namely Sri Ashok Kumar Srivastav was succeeded by another dealing clerk Sri Brij Kumar with effect from 17.11.2014 and he was also succeeded by another dealing clerk Sri Sanjiv Kumar Jha with effect from 29.08.2015 onwards and the department has taken steps to fix the responsibility on the concerned dealing clerk for non-dispatch of the demand notices to the petitioner.

23. The order-sheets reflect full participation of the petitioner in the assessment proceedings through his counsel as well as passing of the order of assessment on the same date on which assessment proceedings were concluded and the order-sheet also reflects the quantification of tax/penalty , assessment order drawn in separate sheet and direction to the office to issue demand notice after verification of payment and further the order of assessment reflects direction to make necessary entry in register VI. The counter affidavit reflects that entries were made in register VI, entries were made in the dispatch register which is in seriatim, and appear to have been maintained in regular course by the respondent department.

24. The respondents have well explained the reasons for non-service of demand notices. The respondents have also dispelled the allegations made by the petitioner on the point of antedating by bringing on record the aforesaid facts through the counter affidavit. The respondents have successfully explained and demonstrated that the assessment proceedings were concluded and assessment orders were passed on the date of assessment orders after examining the records produced by the petitioner through its counsel who also filed his attendance.

25. The writ petitions were filed without copy of the respective proceeding sheets and the demand notices fixing the date of payment as 13.08.2018 created a cloud on the bonafides of the respondents and accordingly, the respondents were asked to file counter affidavit. Upon perusal of the counter affidavits filed in the cases accompanied with the aforesaid necessary documents, the cloud has been cleared, and the allegations of antedating of assessment orders and demand notices are found to be devoid of any merits. No arguments have been advanced by the petitioner on the merits of the assessment orders.

26. During the course of argument, a query was specifically raised to the learned counsel appearing on behalf of the petitioner as to whether there is any provision under the JVAT Act and the Rules framed thereunder to communicate the order of assessment to the Assessee. To this the learned counsel fairly submitted that there is no separate provision to communicate the order of assessment to the assessee and information about passing of the order of assessment is conveyed to the assessee through service of demand notice and upon receipt of demand notice the assessee applies for certified copy of the assessment order. It is further not in dispute that the period of limitation to challenge the assessment commences from the date of service of demand notice and not from the date of passing of the assessment order.

27. Rule 17 of JVAT Rules deal with Notice of Demand and Excess Payment. It provides that a notice of demand or Notice of excess payment shall be in Form JVAT 300 and notice of demand under special mode of recovery shall be in Form JVAT 301. In this case we are concerned with notice of demand of tax and penalty in Form JVAT 300.

Subsection (3) provides that if any dealer makes an application with a court fee stamp of ten rupees, after service of Notice in Form JVAT 302 for any period, but before the issue of notice of demand in Form JVAT 300 asking for a copy of order of assessment/penalty/interest or any other order concerning with the demand notice, a copy of such order may be supplied to him, along with the Notice of Demand. It also provides that even if the demand of any period is NIL, but such application has been made, a copy of such order may be, nevertheless, be supplied.

28. Passing of order of assessment and issuance of demand notice are two different stages. Passing of assessment order is followed by verification of payments made by the assessee , preparation of demand notice , entry made in dispatch register and issuance of demand notice to the assessee and this is also coupled with entry in register VI . The limitation for completion of assessment is three years from the end of the financial year under section 35(8) but demand is recoverable as an arrear of land revenue under rule 17(4) and section 51 provides that for limitation for recovery of tax as 12 years from the date of relevant assessment.

29. Section 35 of the JVAT Act provides for assessment and self-assessment and subsection (8) thereof provides that no assessment under sub-section 6 shall be made after expiry of three years from the end of the tax period. Section 37 deals with audit assessment and section 38 deals with the assessment of dealer who fails to get himself registered. Section 39 of the JVAT, Act provides that no assessment under section 37 and 38 shall be made after expiry of five years from the end of tax period. Section 40 the JVAT, Act deals with turnover escaping assessment and subsection 4 thereof provides that no order of assessment or re-assessment shall be made under sub­section 1 after expiry of five years from the end of the tax-period. Section 42 of the JVAT, Act further, inter alia, provides power of reassessment in certain cases. It provides that where any order is found erroneous or prejudicial to the interest of revenue consequent to or in the light of any judgement or order of any court or tribunal, which has become final, then notwithstanding anything contained in the act, the authority may proceed to reassess the tax payable by a dealer in accordance with such judgement or order, at any time within three years from the date of judgement or order.

30. Rule 38 of the JVAT rules provides that all records specified in the said rule shall be retained and made available for inspections/audit/verifications for a period of five years, after the end of the year.

31. In the instant cases the entire records along with the document/ forms etc were produced by the petitioner at the stage of assessment and they were fully accepted. The demands arise due to non-production of certain statutory forms or rejection of certain claim of sales returns on account of non-production of corresponding credit notes. During the course of assessment proceedings also no prayer was made seeking adjournment for production of any further documents or records. It is also not the case of the petitioner that any statutory form/ documents were received by the petitioner after the conclusion of the assessment proceedings. Thus, there is no requirement of further inspections/audit/verifications of the records of the petitioner by any authority in terms of rule 38 as the same have already been inspected, verified and accepted at the time of assessment itself. So far as merit of the assessment orders are concerned, none of the documents of the petitioner were rejected and whatever submissions were made by the petitioner on the basis of records were accepted by the assessing authority. In spite of the production of entire records the claim of the sales return could not be substantiated by the petitioner and certain claims of e-1 sales were rejected on account of want of statutory forms. Accordingly, no prejudice has been caused to the petitioner even it is assumed that the petitioner does not possess the relevant books of accounts and other documents after expiry of five years from the end of the tax periods involved in these cases. The period of limitation to challenge the assessment order commences from the date of service of demand notice and not from the date of the assessment order. In view of the aforesaid , the argument of the petitioner that the petitioner was rendered remediless on account of delay in service of demand notices is also devoid of any merit and is accordingly rejected.

32. The judgements relied upon by the parties are considered as under.

i. It has been held by the Hon’ble Supreme court in the case reported in 2008 12 SCC 292 (Chandra Prakash Singh & Ors. Vs. Chairman, Purvanchal Gramin Bank and Ors.) at para 34 as under:-

“34. Thus, as a proposition of law, the burden of proving mala fides is very heavy on the person who alleges it. Mere allegation is not enough. Party making such allegations is under the legal obligation to place specific materials before the court to substantiate the said allegations. There has to be very strong and convincing evidence to establish the allegations of mala fides specifically and definitely alleged in the petition as the same cannot merely be presumed. The presumption under law is in favour of the bona fides of the order unless contradicted by acceptable material.”

ii. It has been held by the Hon’ble Supreme Court in the judgement reported in (2010) 4 SCC 192 (Jasbir Singh Chhabra & Ors. Vs. State of Punjab), para 34 as under: –

“34. It is trite to say that while exercising power of judicial review, the superior courts should not readily accept the charge of malus animus laid against the State and its functionaries. The burden to prove the charge of mala fides is always on the person who moves the court for invalidation of the action of the State and / or its agencies and instrumentalities on the ground that the same is vitiated due to mala fides and the courts should resist the temptation of drawing dubious inferences of mala fides or bad faith on the basis of vague and bald allegations or inchoate pleadings. In such cases, wisdom would demand that the court should insist upon furnishing of some tangible evidence by the petitioner in support of his/her allegations.”

iii. In the judgment passed by the Hon’ble Supreme Court reported in (1994) 93 SCC 406 (State of Andhra Pradesh vs. M. Ramakikshtaiah & Co), the Hon’ble Supreme Court was of the view that in absence of any explanation whatsoever from the side of the Revenue, it has to be presumed that order was not made on the date purported to have been made and that it could have been made after expiry of prescribed four years period. In the said case, there was no explanation whatsoever from the side of the Revenue as to why there was delay in communication of the order which was passed on 06.01.1973 and was served upon the assessee on 21st November, 1973. The Hon’ble Supreme Court was themselves of the view that if there had been a proper explanation it would have been a different matter.

iv. The said judgment reported in (1994) 93 SCC 406 was followed by Hon’ble Andhra Pradesh High Court in the case reported in (2005) 142 STC 496 as in the said case also there was no explanation for delay in dispatching the order either in the records or otherwise as no counter was filed.The said two judgments were followed by Hon’ble Orissa High Court in the case reported in 2014 SCC Online Ori 340 (M/s Delhi Foot Wear vs. Sales Tax Officer) where one of the questions which fell for consideration was: –

“whether the order of assessment has been antedated and passed beyond the period of limitation?”

While answering the said question the Hon’ble High Court held as follows: –

“In the instant case, there is no explanation for inordinate delay of 24 months caused in issuing the assessment order to the petitioner. Therefore, we have no hesitation to hold that the order of assessment under Annexure-1 was not made on the date it was purported to have been made. In order to bring the assessment within the period of limitation, the order of assessment bears the date 12.01.2007, whereas it has been passed much after that.”

v. The said judgment of Hon’ble Supreme Court reported in (1994) 93 SCC 406 was also followed by this Court in the case of Gaurang Alloys and Iron Limited vs. The State of Jharkhand reported in (2013) 63 VST (Jharkhand), where again an allegation of ante-dating of assessment orders was made, it was held in para-5 as follows: –

“5. We find some force in the submissions of the learned counsel for the respondents that in all cases merely because of the delayed service of notice, presumption of making assessment order ante­dated cannot be drawn. So in the view already expressed by Hon’ble Supreme Court in the case of M. Ramakishtaiah and Co. (supra) and Hon’ble Supreme Court in the said case held, that in absence of any explanation for non-service of the demand notice for such a long period, the Court must presume that the order was not made on the date it purported to have been made. Therefore, the Revenue has every right to submit its explanation for non-service of notice in time…….. ”

vi. From perusal of the judgment passed by the Hon’ble Supreme Court reported in (1994) 93 SCC 406 ,followed by various High Courts including this High Court in the case of Gaurang Alloys (supra), it is clear that merely because of delay in service of demand notice, no conclusion of antedating can be drawn and such allegations are subject to explanation of the respondents up to the satisfaction of the Court.

vii. In the case of Gaurang Alloys (supra), the petitioner used to appear before the authority concerned and even then, for all the financial years ex-parte orders were passed or according to the petitioner, though in the order-sheet presence of the petitioner was recorded, but the assessment order was not passed on the purported date. Plea of the respondents that notices duly issued and entered in the dispatch register were kept in the office was also rejected by holding that the same was not reliable as at several places, several blank spaces and numbers have been left obviously for the purpose of filling up later so as to insert dispatch of the notices from back date.

viii. In the present cases, the impugned assessment orders are not ex-parte proceedings and have been passed after due participation of the petitioner through his counsel and upon production of books of accounts etc as fully explained above. It has been mentioned in para 6(s) of the counter-affidavit that the assessing officer who passed the assessment order was transferred and relived on 15.09.2014 after passing the assessment orders and as such the aspersion made by the petitioner is unfounded . It has also been stated that all the documents maintained in the office particularly register VI and process register are showing the corresponding entry in continuity and at best it is a clerical error of non- dispatch of the demand notice which may have happened due to inadvertence. It has also been mentioned in the counter affidavit that the headquarters of the respondent department issued a general order on 03.07.2018 with regard to pre-GST period cases pertaining to claim of refund and in course of examination of all cases, the case of the petitioner came to light and an order dated 3.08.2018 was drawn which indicated that as per the records, the demand notice is not served and accordingly it was directed to serve the demand notice through e-mail fixing the date of payment dated 13.08.2018. It has also been mentioned in supplementary counter affidavit that the dealing clerk, namely Sri Ashok Kumar Srivastav was succeeded by another dealing clerk Sri Brij Kumar with effect from 17.11.2014 and he was also succeeded by another dealing clerk Sri Sanjiv Kumar Jha with effect from 29.08.2015 onwards and the department has taken steps to fix the responsibility on the concerned dealing clerk for non-dispatch of the demand notices to the petitioner. In rejoinder to the counter-affidavit, it has been stated in para-17 that the explanation furnished by the respondents is an afterthought and it has been stated that if the Register-VI and Process Register so called maintained by the Respondent – Commercial Taxes Department are called for it would be crystal clear as to what circumstances had occurred before the Respondent – Commercial Taxes Department which resulted into such kind of clerical error to happen.

Upon perusal of the aforesaid official records annexed with the counter affidavit regarding entry in register VI , preparation of demand notices and entries in dispatch register, no doubt regarding genuineness of the records maintained by the respondent department has been created. There appears to be no manipulation or interpolation and there appears to be no scope for such alleged manipulation or interpolation as was the situation in the case of Gaurang Alloys (supra), which was the reason for rejection of explanation furnished by the respondents.

viii. In the judgment passed by the Hon’ble Kerela High Court reported in 1987 SCC Online Kerela 697, the order of assessment was reopened vide order dated 3rd September, 1984, which was communicated to the assessee on 28th November, 1984. In the said case, the Tribunal had held that the order was passed within a period of four years and that communication thereof beyond the said period does not affect its validity. The Hon’ble Kerala High Court held as follows:

“Any authority on which power is conferred, the exercise of which power would affect the rights of parties, is to communicate its order to the party against whom the order would operate. The mere preparation of an order or even keeping the order signed in the files of the office would not render it an effective order, an order which is operative. The exceptions are cases where there is requirement of pronouncing the orders and they are pronounced on notified dates. Then irrespective of the actual presence or otherwise of the parties, notice to the parties is assumed. In other cases, if the authority making the order fails to communicate the order, the order could not be said to have been made, for communication of such order is an essential part of making such order. This is naturally so, for any authority who writes out an order and signs it is free to change it at any time before it is communicated. It is not final at all, for the authority may become wiser on information supplied to it or otherwise and may choose to change the order at any time before it is despatched to the party against whom it operates.”

The Hon’ble Kerala High court had ultimately remanded the matter to the tribunal for examination of the records as to ascertain whether the orders of the deputy commissioner had been issued from his office within the prescribed period of four years.

The aforesaid judgement does not help the petitioner. As already discussed above, the facts of the instant cases clearly suggest that the assessments orders were passed on the same date on which the petitioner had appeared through his counsel and were also released from his office as it was followed by corresponding entries in Register VI and process register showing corresponding entry in continuity, which indicate that the assessment orders also moved out of the control of the assessing officer. Further, the assessing officer was himself transferred on 15.09.2014. As already held above, delay in communicating the demand notices and hence communication about passing of the impugned orders of assessments in the instant cases are well explained by the respondents.

ix. In the judgment passed by the Hon’ble Supreme Court reported in (2018) 8 SCC 215 (Pimpri Chinchwad new Township versus Vishnudev Cooperative Housing Society and others) the order of withdrawal from acquisition was in the form of noting in the file by the then revenue minister and the point for consideration was whether ‘Order’ enabled the land owners for enforcement of such order. The Hon’ble Supreme Court examined the scheme of Land Acquisition Act and found that release of land from acquisition is complete only when notification is issued by the state in this behalf although Section 48 does not expressly state so and it was ultimately held that no mandamus could be issued directing implementation of such order in the form of “file noting.”

In the judgment passed by Hon’ble Gujarat High Court reported in 2006 SCC online Guj 398 (Commissioner of Income Tax vs. Dhatu Sarkar Pvt. Ltd.) it has been held in para 7 that a bare perusal of proviso to section 139 (1) of the Income Tax Act, 1961 makes it clear that income tax officer is vested with the discretion to extend the date of furnishing return on an application made in the prescribed manner and decision on the application for extension of time is also required to be communicated to the assessee concerned. In the said case although the application for extension of time was rejected but was not communicated. In this background the prejudice caused to the assessee was considered and was held that such a decision was found to affect the rights of the assessee as it prevented the assessee from taking effective steps to file return within the statutory period.

The said two judgments do not apply to the facts and circumstances of this case as the orders of assessments are a quasi-judicial order passed after hearing of the petitioner, followed by issuance of demand notices as per the provision of JVAT Act itself and the assessee has statutory remedies against the orders of assessments whose limitation commence from the date of receipt of the demand notices and not from the date of the assessment orders. In the present cases the order sheets reveal that the date on which the impugned orders of assessments were passed, the petitioner not only appeared through an advocate but even its liability was quantified and mentioned in the order sheets after passing the orders of assessment in separate sheets.

33. As a cumulative effect of the aforesaid findings, the writ petitions being devoid of any merit, are hereby dismissed.

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