Audit assessment cannot follow escaped turnover assessment for the same tax period under the value added tax scheme.

Audit assessment under Section 42 of the Orissa Value Added Tax Act, 2004 cannot be invoked for a tax period already covered by an escaped turnover assessment under Section 43 for the same period. The statutory scheme distinguishes audit reassessment under Section 42, based on the audit visit report and confined to that provision, from reopening under Section 43 read with Rule 50 where turnover has escaped assessment, been under-assessed, or taxed at a lower rate. Applying the principle that a statute must be followed as enacted and not expanded by implication, the Orissa HC held that the same period could not be subjected to both assessments and set aside the impugned order.

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Issues: Whether audit assessment under Section 42 of the Orissa Value Added Tax Act, 2004 can be made for a tax period already covered by an assessment of escaped turnover under Section 43 of that Act for the same period.

Analysis: Section 42 authorises audit assessment on the basis of the audit visit report and contemplates reassessment only in the circumstances specified in that provision. Section 43, read with Rule 50 of the Orissa Value Added Tax Rules, 2005, applies after a dealer has already been assessed under the specified provisions and permits reopening where turnover has escaped assessment, been under-assessed, or been taxed at a lower rate. The scheme of the Act shows that once the dealer has been assessed under Section 43 for a tax period, the same period cannot again be subjected to audit assessment under Section 42. The Court applied the settled principle that where the statute prescribes a method, it must be followed as enacted, and no additional words can be read into the provision to enlarge its scope.

Conclusion: Audit assessment under Section 42 cannot be made after completion of assessment of escaped turnover under Section 43 for the same tax period. The impugned assessment order was set aside, and the writ petition was allowed.

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