2015 (6) TMI 623 - HC - VAT and Sales Tax

Court upholds reassessment under Assam VAT Act, emphasizing need for accurate declarations

The court upheld the reassessment under section 40 of the Assam Value Added Tax Act, 2003, finding discrepancies in the petitioner's declarations in form ... Validity of reassessment proceedings - escape assessment - submission of false return - Held that:- quantity of goods shown in form 65A was found to be higher than the one shown in the return, which was assessed in the year 2007 - Subsequent material, a declaration furnished by the petitioner itself under the statutory form 65A, disclose that the quantity and value of the goods were more than what were furnished in the return. Therefore there does not appear to be any reason to hold that the reassessment order is not based on the valid material which is found subsequent to the assessment. That apart the order is an appelable order. The petitioner has taken a shortcut method to file the writ petition bypassing the provisions of appeal and other remedies before invoking the writ jurisdiction under Article 227 of the Constitution of India. A false return has been filed on the basis of the contents of statutory form 65A which the department found subsequent to the assessment from the check-post in West Bengal. This clearly shows that the petitioner has with a dishonest intention filed false return to cause loss to the state revenue. If so, it amounts to commission of offence punishable under section 415, read with section 417 of the Indian Penal Code. - Decided against assessee. Issues:1) Reassessment under section 40 of the Assam Value Added Tax Act, 2003 based on discrepancies in form 65A.2) Interpretation of provisions of section 40 in comparison with section 19A of the Assam Sales Tax Act, 1947.3) Compliance with Rule 41(9)(iii) of the Assam Value Added Tax Rules, 2005 regarding production of necessary documents at the check-post for inter-state trade.4) Validity of reassessment order and jurisdiction of authorities.5) Applicability of writ jurisdiction under Article 227 of the Constitution of India in cases of reassessment.Analysis:1) The petitioner engaged in inter-state trade in goods faced reassessment under section 40 of the Assam Value Added Tax Act, 2003 due to discrepancies between the quantity of goods shown in form 65A and the return filed earlier. The reassessment was challenged through an appeal, questioning the validity of the new material found post-assessment to justify the reassessment.2) The counsel for the petitioner relied on a previous case to argue that for reassessment, the authority must be satisfied based on subsequent information post the assessment order. The court emphasized the importance of new information to establish the escape of assessment, not merely an allegation, drawing parallels between section 40 of the current Act and section 19A of the previous Sales Tax Act.3) The petitioner contended that compliance with Rule 41(9)(iii) of the Assam Value Added Tax Rules, 2005 was maintained by providing the necessary documents at the check-post for inter-state trade. The submission aimed to demonstrate that there was no default on the petitioner's part, preventing the authorities from invoking reassessment powers under section 40.4) Upon reviewing the submissions and evidence, the court found that the petitioner's own declaration in form 65A revealed discrepancies in quantity and value compared to the return, justifying the reassessment order. The court criticized the petitioner for bypassing appeal procedures and directly filing a writ petition, highlighting the dishonest intention behind filing a false return, which could lead to criminal charges under the Indian Penal Code.5) The court dismissed the petition, emphasizing the need for authorities not only to reassess but also to prosecute individuals filing false returns to safeguard state revenue. The judgment underscored the importance of deterring such fraudulent practices through effective legal actions, indicating that reassessment alone might not suffice, and criminal proceedings could be initiated to address such misconduct effectively.