Return-default provisions cannot replace disputed assessment of taxable turnover; Section 25 demands and penalty were set aside.

Section 25 of the Tripura Value Added Tax Act, 2004 cannot be used to adjudicate disputed taxable turnover or to make a substantive reassessment where the issue concerns whether a claimed discount should be excluded from turnover. Such contested matters must be decided through the assessment machinery in Chapter V, and Section 25 is confined to cases of return-default or higher tax shown in a revised return. Using that provision to raise demands would also bypass the limitation governing audit assessment and turnover escaping assessment. The High Court held the tax demands, bank-account attachments and penalty orders invalid and set them aside.

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Issues: Whether the assessing authority could invoke Section 25 of the Tripura Value Added Tax Act, 2004 to raise tax demands on a disputed component of taxable turnover and impose penalty, when the controversy required adjudication in assessment proceedings and the assessment route was already time-barred.

Analysis: Section 25 applies only where the dealer fails to pay tax due as per the return, furnishes a revised return showing higher tax, or fails to furnish a return. It does not authorise the assessing authority to resolve a disputed question as to whether a claimed discount should have been excluded from taxable turnover or to make a substantive reassessment of the return. Questions relating to correctness of turnover, exemptions, deductions, or similar contested items must be determined through the assessment machinery in Chapter V of the Act. Using Section 25 to make such adjustments would expand that provision beyond its scope and permit circumvention of the limitation governing audit assessment and turnover escaping assessment.

Conclusion: The impugned tax demands under Section 25 were invalid, and the consequential demand notices, bank-account attachments, and penalty orders could not stand.

Final Conclusion: The petitions succeeded, and the challenged recovery and penalty action was set aside because Section 25 could not be used as a substitute for barred or disputed assessment proceedings.

Ratio Decidendi: A return-default provision cannot be used to adjudicate disputed taxable turnover or to bypass the statutory assessment scheme and its limitation period.

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