TaxTMI 
TaxTMI 
TaxTMI 
2015 (1) TMI 177
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....rovided under sub-section (2) of Section 9C of the OET Act, the said notice is invalid and consequentially, the order of assessment and demand notice are bad in law. In support of his contention, he relied upon the judgment of this Court in the case of Jindal Stainless Ltd. -v- State of Orissa and others, (2012) 54 VST 1 (Orissa). It was further contended that the assessing officer being the creature of the statute cannot act contrary to or de hors the provisions of the OET Act. 3. Mr. Kar, learned Standing Counsel for opposite party-Revenue submitted that on the date fixed for production of books of account, the petitioner appeared and produced the books of accounts and did not raise any objection to the validity of the notice and therefore, no prejudice is caused to the petitioner for not allowing him a minimum period of 30 days' time as prescribed under Section 9C(2) of the OET Act. Therefore, the notice not providing 30 days' time is not invalid. Further, notice for assessment of tax issued in Form E-30 as a result of audit, does not require to allow 30 days time to the dealer to produce books of account. Hence, liberty has been given to the Assessing Officer to grant time le....
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....isions of the said Act? (iv) Whether the order of assessment dated 06.07.2009 passed under Section 9C of the OET Act for the period 01.04.2005 to 31.05.2009 is sustainable in law? (v) What order? 6. Question Nos.(i) and (ii) being interlinked, they are dealt with together. 7. To deal with the above questions, it is necessary to extract subsections (1) and (2) of Section 9C of the OET Act. "9C. Audit Assessment.- (1) Whether the tax audit conducted under Section 9B results in the detection of suppression of purchases or sales, or both, erroneous claims of deductions, evasion of tax or contravention of any provisions of this Act affecting the tax liability of the dealer, the assessing authority notwithstanding the fact that the dealer may have been assessed under Section 9 or Section 9A, serve on such dealer a notice in the form and manner prescribed along with a copy of the Audit Visit Report, requiring him to appear in person or through his authorized representative on a date and place specified therein and produce or cause to be produced such books of account and documents relying on which he intends to rebut the findings and estimated loss of revenue in respect of any tax p....
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....am Phal Kundu v. Kamal Sharma; and Indian Bank's Association v. Devkala Consultancy Service, AIR 2004 SC 2615, Gujarat Urja Vikas Nigam Ltd. -v- Essar Power Ltd., (2008) 4 SCC 755)]. 10. If the notice issued is invalid for any reason, then the proceeding initiated in pursuance of such notice would be illegal and invalid. Section 9C(2) is a mandatory provision not with regard to any procedural law but with regard to a substantive right. Any infirmity or invalidity in the notice under Section 9C(2) of the Act goes to the root of jurisdiction of the Assessing Authority. Issue of Notice under Section 9C(2) is a condition precedent to the validity of any assessment under Section 9-C of the Act. If the notice issued for assessment is invalid, the assessment would be bad in law. Therefore, the notice for assessment of tax without allowing the minimum period of 30 days for production of the books of account and documents is invalid in law and consequentially, the order of assessment and demand notice passed/issued are not sustainable in law. 11. Our above view is fortified by the following judicial pronouncements: 12. The Hon'ble Supreme Court in the case of Y. Narayana Chetty -vs- Inco....
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....tdar -v- CIT, (1935) 3 ITR 112 (lar): AIR 1935 Lah 201, it has been held as follows: "Apparently, this notice is illegal as it could seem that under section 22(2) of the Act, 30 clear days must be given for furnishing of the return from the date of service. It was held in Kajorimal Kalyan Mal, In re, (1930) ITC 451 (All) - AIR 1930 All 209 that under section 22(2) the Income Tax Officer must give the proposed assessee at least thirty days time within which to furnish his return." If this minimum is denied the notice becomes entirely illegal and no subsequent extension of time will cure the defect that initially lay till the notice issued." 17. In the instant case, notice for assessment of tax as a result of audit in Form E-30 dated 19.06.2009 was issued requiring the petitioner to appear in person or through his authorized agent before the Assessing Officer on 06.09.2009 at 11 A.M. to produce or cause to be produced books of account for the period 2005-06 to 2009-10. Thus, notice in Form E-30 itself shows that minimum thirty days time as provided under sub-section (2) of Section 9C of OET Act has not been granted to the petitioner. Thus, it is a case of clear violation/infraction....
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....e issued under Annexure-2 for assessment of tax as a result of audit is invalid. 21. At this juncture, it would be profitable to refer to the judgment of the Hon'ble Supreme Court in the case of Krushna Chandra Sahoo -v- Bank of India, AIR 2009 Ori 35 : 106 (2008) CLT 713, wherein it has been held as follows: "8. A Constitution Bench of the Hon'ble Supreme Court in Sukhdev Singh and others -v- Bhagatram Sardar Singh Raghuvanshi and another, (1975) AIR 1975 SC 1331 held that the statutory authorities cannot deviate from the statutory provisions and any deviation, if so made, is required to be enforced by legal sanction of declaration by the Courts invalidating such actions in violation of the statutory Rules and Regulations. A similar view had been reiterated by the Apex Court in Ambika Quarry Works etc. -v- State of Gujarat and others, (1987) 1 SCR 562; Purushottam -v- Chairman, Maharashtra State Electricity Board and another, (1999) 6 SCC 49 and Sultan Sadik -v- Sanjay Raj Subba and others, AIR 2004 SC 1377. 9. Therefore, it is evident that when the action of the instrumentalities of the State is not as per the Rules and Regulations and supported by the statute, the Court must ....