Time-bound revised returns and input tax credit claims must be handled separately, with due hearing before assessment.
A time-bound statutory option to file revised returns could not be invoked after expiry of the prescribed three-month period, so cancellation of permission to pay tax at the compounded rate was upheld. However, in completing assessment, the authority had to examine the dealer's specific claim for input tax credit or rebate, take account of amounts already paid under the compounded scheme, and give a meaningful opportunity to file a reply and raise objections before passing orders.
Issues: (i) Whether cancellation of the option to pay tax at compounded rate was valid when the request to file revised returns under the statutory provision was made beyond the prescribed period. (ii) Whether, in completing the assessment, the assessing authority was required to consider the dealer's claim for input tax credit or rebate and afford an opportunity to file objections.
Issue (i): Whether cancellation of the option to pay tax at compounded rate was valid when the request to file revised returns under the statutory provision was made beyond the prescribed period.
Analysis: The dealer had not discharged the entire purchase tax liability initially and sought to regularise the omission by filing revised returns only after the statutory period of three months from the compounding order had expired. The statutory option to file revised returns was time-bound, and the belated request could not be treated as compliance with that requirement. In those circumstances, the cancellation of the permission to pay tax at compounded rate was not shown to be illegal.
Conclusion: The cancellation of the compounded rate option was upheld and the challenge to that extent failed.
Issue (ii): Whether, in completing the assessment, the assessing authority was required to consider the dealer's claim for input tax credit or rebate and afford an opportunity to file objections.
Analysis: While completing assessment proceedings, the assessing authority was directed to examine the dealer's specific claim for input tax credit or rebate for taxes paid under the relevant charging provisions and also to take into account the payments already made under the compounded scheme. The authority was further required to permit the dealer time to file a detailed reply and to hear objections on merits before passing orders.
Conclusion: The assessing authority was required to consider the claim for credit or rebate and to complete the assessment only after granting opportunity of reply and hearing.
Final Conclusion: The writ petition failed on the challenge to cancellation of the compounded rate option, but relief was granted to the extent of directing fair consideration of credit claims and observance of due process in the assessment proceedings.
Ratio Decidendi: A statutory option to revise returns within a prescribed time cannot be invoked beyond that period to undo cancellation of compounded tax treatment, but assessment must still be completed after considering admissible tax credits and after giving the dealer a meaningful opportunity of hearing.
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