TaxTMI 
TaxTMI 
2009 (10) TMI 876
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.... commencement of the VAT regime and as a measure for early finalisation of pending assessments, the Finance Act, 2007 introduced a summary procedure for completion of pending assessments. It is this scheme of summary assessment covered by section 17D of the Act that was challenged by few dealers before the single judges. Two learned single judges upheld the constitutional validity of section 17D, against which the connected writ appeals are filed. Remaining cases are new cases filed before the single judge challenging the very same statutory provision and therefore, those cases are also listed with the writ appeals. We have heard various counsel appearing for the appellants/petitioners and the Special Government Pleader appearing for the respondents. For easy reference we extract hereunder section 17D with all its subsections: "17D. Fast track method of completion of assessment.-(1) Notwithstanding anything contained in any other law for the time being in force or in any other provisions of this Act assessments pending under the Act as on the 1st day of April, 2007 may, subject to the provisions of sub-section (2), be completed under the fast track method. (2) The assessm....
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....d, and where returns and tax deduction certificate issued by the awarder have been produced, assessment may be completed accepting the awarder's certificate. (v) in case of contracts in respect of which tax is paid under section 5 of this Act, and where returns and statement of accounts have been filed, but the returns are found to be incorrect or incomplete, assessments may be completed determining additional tax payable at twenty per cent of the tax payable subject to a minimum of ten thousand rupees: Provided that the amnesty scheme envisaged in section 23B shall also be applicable to assessment completed as per this section. (f) The team shall be competent to offer reasonable concessions after recording the reasons thereof on the estimation of suppression of turnover on account of any offences detected against the dealer, and also on the interest payable up to a maximum of fifty per cent of that payable, in cases where the dealer offers immediate payment of the dues; (g) The hearings shall be open to public. The date and venue of the sitting shall be intimated in advance to the dealers concerned. Information shall also be published through the local media; (h) No adjo....
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..... The common ground raised by all the parties is that the provisions of section 17D are arbitrary, discriminatory and violative of article 14 of the Constitution of India. The first type of discrimination pointed out by them is between dealers whose assessments were completed as on 31st March, 2007, who enjoyed facility for two level appeals against assessments without payment of assessed tax, but on payment of only admitted tax and those dealers whose assessments are pending as on 1st April, 2007, which could be completed under section 17D limiting their right of appeal only at one level to the Tribunal, that too, after payment of full assessed tax. The second type of discrimination pointed out is between the dealers whose assessments could be completed at the discretion of the assessing officer by resorting to the regular course of assessment under section 17(3) and the other class of dealers whose assessments are taken up by the team of officers constituted under section 17D(2)(b) of the Act. In other words, the contention of the appellants/petitioners is that since section 17D gives discretion to the assessing authorities, some of the dealers will be assessed under section 17(....
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....ontention canvassed on behalf of the State is that there is general acceptability of the scheme of assessment under section 17D by the dealer-community. We notice that the provisions of section 17D unlike the provisions of section 17 are not just a procedure for assessment. On the other hand, it is loaded with several incentives for the dealers and restrictions for the assessing team while making assessment. In the first place, sub-clause (i) of section 17D(2)(e) states that even in the case of dealers who have compounded offence for evasion of tax under section 47 or on those dealers on whom penalty is levied for evasion of tax under section 45A or under section 29A, the addition to the turnover in the course of assessment under section 17D should be limited to three times of the compounding fee paid or the tax effect of suppression detected, whichever is higher and in cases where a pattern of suppression has not been established, the addition should be limited to only an amount equal to the suppression detected. In our view, this is a major restriction to the team of assessing officers because in the normal course in regular assessment under section 17(3), if a dealer is found t....
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.... drawn between the dealers whose assessments are completed as on March 31, 2007 and the case of dealers whose assessments are pending as on April 1, 2007 cannot be accepted because they do not belong to the same class. The very purpose of introduction of section 17D itself is to complete all pending assessments by adopting a summary procedure. The fact that the assessments of some dealers have been completed under the existing procedure does not bar the Legislature from making a separate procedure for completion of pending assessments. The apprehension of the appellants/petitioners that in exercise of the discretion of the assessing officers, the assessees could be discriminated by taking up the assessments of some of them for regular assessment and by referring other cases for assessment by the team under section 17D is also not justified. We feel what is visualised under section 17D is to complete as far as possible all assessments pending as on April 1, 2007 in accordance with the summary procedure contemplated under section 17D. In fact, the very purpose of completion of assessments under the old Act within a time-frame is for early transition to the VAT regime and for devotion....
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.... be unconditionally given to an aggrieved party or it should be conditionally given. Right of appeal which is a statutory right can be conditional or qualified. It cannot be said that such a law would be violative of article 14 of the Constitution. If the statute does not create any right of appeal, no appeal can be filed. There is a clear distinction between a suit and an appeal. While every person has an inherent right to bring a suit of a civil nature unless the suit is barred by statute, however, in regard to an appeal, the position is quite opposite. The right to appeal inheres in no one and, therefore, for maintainability of an appeal there must be authority of law. When such a law authorises filing of appeal, it can impose conditions as well." In the later decision in Government of Andhra Pradesh v. Smt. P. Laxmi Devi [2008] 4 SCC 720, the apex court upheld the provision for payment of 50 per cent. of stamp duty for enabling the aggrieved party to maintain a reference to the Collector against the order determining stamp duty payable. It is pertinent to note that the single judge has compared stamp duty with tax and specifically held that hardship is not relevant in consider....
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....d in violation of natural justice and without following the mandatory procedure provided in section 17D, it is not as if the appellants/petitioners are totally without remedy. The constitutional remedy under article 226 is available in such cases and it will be open to the aggrieved party to approach this court seeking relief against such orders and it is within the powers of this court to mould appropriate relief. Of course two level appeals are provided against regular assessments by assessing officers, that too, on payment of only admitted tax. However, in the case of section 17D assessment, only one appeal is provided, that too, after payment of full assessed tax. It is worthwhile to note that there is substantial difference between the assessment completed by a regular assessing officer and the assessment completed by a team of assessing officers. In the case of special circle cases where the assessing officer is an Assistant Commissioner, the team constituted for assessment under section 17D will be presided over by a Deputy Commissioner and the three other members of the team are qualified assessing officers of the rank of Assistant Commissioner of Sales Tax. Similarly in t....
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....owever, we see no merit in the challenge against the validity of section 17D of the Act, which as already held by us is beneficial provision. Therefore, we uphold the constitutional validity of section 17D. Even though we have upheld the validity of the statutory provisions, we are unable to uphold the impugned assessments for the simple reason that none of the assessments challenged in the writ appeals or in the writ petitions was completed in accordance with the procedure contemplated under section 17D. It is clear from clause (g) of section 17D(2) that the team constituted under section 17D should fix the venue and date of hearing and hold sitting to hear the parties after issuing notice in advance to dealers concerned. Further, information in this regard should be published in local media as well. It is provided in sub-section (3) of section 17D that all assessments under fast track method should be by unanimous decision signed by all team members. It is very clear from the scheme that all the team members should sit together, consider the returns filed, accounts and records produced, hear the parties or their representatives and suggest proposal for assessment. If an a....