Court prohibits double taxation, sets aside assessment under Section 42 for same period assessed under Section 43.

The court held that an audit assessment under Section 42 cannot follow an assessment under Section 43 for the same period under the OVAT Act. It concluded that taxing the same turnover twice is impermissible and set aside the assessment order under Section 42 for the period in question. The court allowed the petitioner to be assessed under Section 42 excluding the period already assessed under Section 43, emphasizing statutory interpretation in line with legislative intent.

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Issues Involved:
1. Jurisdiction of the Assessing Authority to pass an order under Section 42 of the OVAT Act after an assessment under Section 43 for the same period.
2. Whether taxing the same turnover twice is permissible under the OVAT Act.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Assessing Authority:
The primary issue is whether the Assessing Authority has the jurisdiction to make an audit assessment under Section 42 of the OVAT Act after completing an assessment under Section 43 for the same tax period. The petitioner argued that the assessment under Section 42 dated 27.05.2011 is not sustainable as the petitioner was already assessed under Section 43 for the period 24.01.2006 to 31.07.2006. The respondent contended that Sections 42 and 43 operate in different fields, and there is no legal bar to making an assessment under Section 42 after the completion of an assessment under Section 43 for the same period.

The court examined the scheme of the OVAT Act, which provides mechanisms for different types of assessments, including self-assessment (Section 39), provisional assessment (Section 40), audit assessment (Section 42), and assessment of escaped turnover (Section 43). The language of Section 43 read with Rule 50 of the OVAT Rules indicates that an assessment under Section 43 can be made after a dealer is assessed under Sections 39, 40, 42, or 44. However, the court noted that the legislature did not intend for an assessment under Section 42 to be made after an assessment under Section 43 for the same period.

The court emphasized that the legislative intent is clear from the wording of Sections 42 and 43, which implies that an audit assessment under Section 42 should not follow an assessment under Section 43 for the same period. The court referred to the principle that the court cannot add or alter the words of a statute to correct perceived deficiencies.

2. Taxing the Same Turnover Twice:
The petitioner argued that the action of the Assessing Authority amounts to taxing the same turnover twice, which is impermissible. The court agreed, stating that escapement of turnover from assessment cannot be predicted before the assessment is completed. Therefore, only after the final order of assessment can it be determined whether any part of the turnover has escaped assessment. The court highlighted that the scope of assessment under Section 43 is broader than under Section 42, allowing the Assessing Authority to bring to charge the turnover that had escaped assessment.

The court concluded that audit assessment under Section 42 cannot be made after the completion of the assessment of escaped turnover under Section 43 for the same tax period. The court set aside the assessment order dated 27.05.2011 under Section 42 for the period 29.03.2006 to 30.11.2008 but allowed the Assessing Authority to assess the petitioner under Section 42 excluding the period already assessed under Section 43.

Conclusion:
The court allowed the writ petition, setting aside the assessment order dated 27.05.2011 under Section 42 of the OVAT Act for the period 29.03.2006 to 30.11.2008, and directed that the petitioner can be assessed under Section 42 excluding the period already assessed under Section 43. The judgment emphasized the legislative intent and the principle that statutory provisions must be interpreted harmoniously and in the manner prescribed by the legislature.

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