TaxTMI 
TaxTMI 
2014 (4) TMI 732
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....king into consideration of the sale price as fixed in terms of Rule 64D of the Concession Rules, (c) quashing the orders and demands all dated 11.02.2013 whereby value added tax/interest/penalties at Rs. 3,39,46,556.00 on difference of sale prices has been arbitrarily created and demanded from the petitioner, (d) declaring that the respondent-Central Government has got no authority to fix sale price of Mineral Iron Ore, which is not a controlled commodities, (e) directing the Commercial Taxes Department, Government of Jharkhand that Value Added Tax can be levied on the actual sale price in terms of valuable consideration for transfer of property in goods and not on any hypothetical or assumption price, (f) for a direction to the Commercial Taxes Department, Government of Jharkhand not to take any coercive measures during the pendency of the writ petition, and (g) any other appropriate writ/writs, order/orders as deem fit and proper in the interest of justice. 3. The petitioner, a Limited Company, is a mining lessee of Mineral Iron Ore and it is engaged in the business of mining and sale of the Iron Ore. The petitioner-company was granted mining lease over an area of 640 acres....
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.... item. At no point of time either the Assessing Authority or Indian Bureau of Mines took any data from the petitioner-company to ascertain what is the sale price of the Iron Ore sold by the petitioner-company and therefore, the Indian Bureau of Mines or any authority cannot assume a sale price for the petitioner-company 5. The petitioner-Company received a notice dated 05.06.2012 whereby it was directed to clarify the points raised in the notice for the assessment year 2010-11 by appearing on 28.06.2012. A similar notice was issued for the assessment year 2011-12. However, on 11.02.2013 itself without hearing the petitioner-company, an amount of Rs.3,39,46,556.00 was imposed as penalty and tax for the period 2010-11, and an amount of Rs.10,08,394.94 was imposed as penalty and tax for the period 2011-12 in a most arbitrary manner and in utter violation of the principles of natural justice. It is further stated that the Commercial Taxes Department of the State of Jharkhand in a most arbitrary manner and without any provision in law, has taken the sale price as notified by the Indian Bureau of Mines, for the purpose of collection of royalty as the actual sale price of the petitioner-....
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....e same was rejected as the petitioner-company enacted to evade tax by delaying the matter. On 05.06.2013, the Respondent no.3 issued a notice and for filing show-cause in respect of the concealment of actual sale price of Iron Ore. The Respondent- Authority had procured detail of return filed with the Mining Department, Chaibasa and on perusal of the same, it was found that the petitioner company used to show in the return filed with the Respondent no.3, the sale price of the Iron Ore lesser than the average market price and average price fixed by Indian Bureau of Mines. 9. It is also stated that in course of the proceeding, the Assessing Officer collected figures from three big mine owners namely, M/s. Orissa Manganese and Mines (P) Limited, M/s. Rungta Mines Limited, Chaibasa and M/s. Sah Brothers, Chaibasa for the different periods and different 'Fe grades' to determine the average sale price on the basis of 'Fe grades' contents in the mines which is authentic and reasonable and published in the Gazette of Government of India. Thereafter, month-wise and period-wise and average sale price-wise comparative chart was prepared. 10. It is further stated that the Ind....
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....atter to the Assessing Authority for a fresh decision in the matter. 12. The learned counsel for the petitioner, Mr. Ananda Sen submitted that the impugned order is vitiated on account of gross violation of the principles of natural justice. The learned counsel referred to Section 35 of the Jharkhand Value Added Tax Act, 2005 which deals with 'assessment and self assessment' and submitted that sub-section (5) of Section 35 and sub-section (7) of Section 35 are two different provisions for two different purposes. It was submitted that as per Section 35(7) of the Act, the authority has to record reasons and no order shall be passed without giving proper opportunity of being heard to the assessee. It was submitted that before passing order under sub-section (7) of Section 35, the Assessing Officer has to give notice under Section 35(7) as well as adequate opportunity of being heard. The learned counsel further submitted that Section 40(1) deals with turnover escaping assessment and Section 40(2) of the Act deals with payment of interest and before ordering for payment of interest, the prescribed authority has to afford an opportunity of hearing to the assessee and by an order....
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....y uses the expression "reasonable opportunity of being heard." Referring to Section 37 of the Act, the learned counsel submitted that since the audit assessment would be assessment pursuant to the assessment done under Section 35 or Section 36 of the Act, therefore, there is a requirement of issuing notice to the assessee as it would not be known to the assessee if any proceeding under Section 37 is initiated, after the assessment under Section 35 or Section 36 of the Act was completed. It is further submitted that Section 40(1) of the Act comes into play after the regular assessment whereas, Section 40(2) of the Act is attracted even before or during the regular assessment. 16. Mr. Rajesh Shankar, the learned counsel appearing for the respondent-State of Jharkhand has submitted that the impugned order has been passed during the assessment proceeding and during the assessment proceeding the Assessing Officer can ask the assessee as well the Department to furnish the details of return filed and any other material relevant for the purpose of assessment. 17. Referring to the provisions contained in sub-sections (1) to (5) of Section 35, the learned counsel has submitted that the pro....
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.... dispute has been raised by the counsel for both the parties and it is accepted that if the prescribed authority is satisfied that the return or revised return as the case may be, and self-assessment claim is prima facie correct, consistent and complete, the prescribed authority accepts self-assessment as filed by the dealer and proceeds to assess the amount of tax and interest due from the dealer on the basis of such return, after making prima facie adjustment in the nature of arithmetical error, if any, in the return and the self-assessment. 21. With respect to scope and mandate of sub-Section (7) of Section 35 of the Act, the learned counsel for the petitioner has submitted that the words "before initiating such proceeding" would indicate that the proceeding under Section 35 (7) of the Act is an independent proceeding and before resorting to Section 35(7) of the Act, the Assessing Officer is required to give reasons and record his satisfaction and no order under Section 35(7) can be passed without affording an opportunity of being heard to the assessee. Per contra, Mr. Rajesh Shankar, the learned counsel appearing for the Revenue has contended that since in a pending proceeding....
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....itiate the order. 25. In J.K. Steel Ltd. v. Union of India AIR 1970 SC 1173, the Hon'ble Supreme Court has held that, if the exercise of power can be traced to a legitimate source, the fact that the same was purported to have been exercised under a different power does not vitiated the exercise of the power in question. 26. In N. Mani v. Sangeetha Theatre [2004] 12 SCC 278, a three Judge Bench of this Court succinctly observed as follows : "9. It is well settled that if an authority has a power under the law merely because while exercising that power the source of power is not specifically referred to or a reference is made to a wrong provision of law, that by itself does not vitiate the exercise of power so long as the power does exist and can be traced to a source available in law." 27. In Mohd. Shahabuddin v. State of Bihar [2010] 4 SCC 653, the Hon'ble Supreme Court has held that when an Authority passes an order which is within its competence, it cannot fail merely because it purports to be made under a wrong provision. The Hon'ble Supreme Court has observed as under : "208. .....In such cases, this Court will always rely upon Section 114 illustration (e) of t....
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....re the Assessing Officer on 08.08.2012 and 27.09.2012 and the assessee sought adjournment on 27.08.2012 and 10.11.2012. On 11.02.2013 the assessee again sought one month's time which was rejected by the Assessing Authority and the Assessing Officer proceeded to pass the final order. Similarly, in W.P.(T) No. 1687 of 2012 for the assessment year 2011-12, first notice was issued on 05.06.2012 and thereafter, the proceeding before the Assessing Officer took place on 28.06.2012, 03.10.2012, 17.01.2013 and 11.02.2013. We are of the view that sufficient opportunity was given to the petitioner-company. The petitioner was heard by the Assessing Officer. There was not required in law for issuing fresh notices under Section 35(7) and under Section 40(2) of the Act to the assessee and therefore, we are of the view that the impugned order dated 11.02.2013 has not been passed in violation of the principles of natural justice. 30. The respondents have taken an objection to the maintainability of the writ petition on the ground of availability of statutory remedy of Appeal/Review/ Revision. The Jharkhand Value Added Tax Act, 2005 provides forum for appeal, revision and review of the orders p....
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....vides for a complete machinery to challenge an order of assessment, and the impugned orders of assessment can only be challenged by the mode prescribed by the Act and not by a petition under Art. 226 of the Constitution. It is now well recognised that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of...." '12. Furthermore, the Act provides for an adequate safeguard against an arbitrary or unjust assessment. The petitioners have a right to prefer an appeal under sub-s. (1) of S. 23 of the Act subject to their payment of the admitted amount of tax as enjoined by the proviso thereto. As regards the disputed amount of tax, the petitioners have the remedy of applying for stay of recovery to the Commissioner of Sales Tax under Cl. (a) of the second proviso to sub-s. (1) of S. 13 of the Act...."' 32. In Asstt. Collector of Central Excise v. Dunlop India Ltd. AIR 1985 SC 330, the Hon'ble Supreme Court has observed that Article 226 is not meant to short circuit or circumvent statutory procedures. The Hon'ble Supreme Court has observed as under : "3. .....It is only ....