TaxTMI 
TaxTMI 
2015 (4) TMI 494
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....essment dated 27.05.2011 passed under Section 42 of the OVAT Act for the period 29.03.2006 to 30.11.2008 is not sustainable in law since the opposite party-Assessing Authority by order of assessment dated 25.09.2006 has already assessed the petitioner under Section 43 of the OVAT Act and levied tax at the rate of 4% on un-manufactured tobacco for the period 24.01.2006 to 31.07.2006, which was included in the present tax period. According to Mr. Mohanty no assessment order under Section 42 of the OVAT Act can be passed after completion of the assessment under Section 43 of the OVAT Act for the self same period. It was further submitted that this action of the opposite party also amounts to taxing the same turnover twice for which assessment order is bad in law. 3. Mr.M.S.Raman, learned Additional Standing Counsel for the Revenue submitted that both the Sections, i.e., Section 42 and Section 43 operate in different fields for the purpose of assessment under the OVAT Act. The Assessing Authority is vested with the jurisdiction/power to make assessment either under Section 42 or Section 43 of the OVAT Act, as the case may be. There is no legal bar to make assessment under Section 42 o....
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....ch he intends to rebut the findings and estimated loss of revenue in respect of any tax period or periods as determined on such audit and incorporated in the Audit Visit Report." xx xx xx (Underlined for emphasis) 43. Turnover escaping assessment.- (1) Where, after a dealer is assessed under Section 39, 40, 42 or 44 for any tax period, the assessing authority, on the basis of any information in his possession, is of the opinion that the whole or any part of the turnover of the dealer in respect of such tax period or tax periods has- (a) escaped assessment, or (b) been under-assessed, or (c) been assessed at a rate lower than the rate at which it is assessable; or that the dealer has been allowed- (i) wrongly any deduction from his turnover, or (ii) input tax credit, to which he is not eligible, the assessing authority may serve a notice on the dealer in such form and manner as may be prescribed and after giving the dealer a reasonable opportunity of being heard and after making such enquiry as he deems necessary, proceed to assess to the best of his judgment the amount of tax due from the dealer. xx xx xx" (Underlined for emphasis) 8. It may also be necessary for our p....
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....fore, only in case of completion of assessment either under Section 39, 40, 42 or 44, the escaped assessment as provided under Section 43 can be invoked for the occurrence of any or more of the events stated in Section 43. Thus, a turnover cannot be said to be escaped assessment if proceeding in respect of assessment under either of the Sections referred to in Section 43 are pending and no final order of assessment has been passed. A proceeding is said to be pending as soon as it commences and until it is concluded. Only after final order of assessment, it can be said whether the whole or any part of the turnover of the dealer has escaped assessment. 11. At this juncture, it would be beneficial to look at the beginning words appearing in Section 43 of OVAT Act and Rule 50(1) of the OVAT Rules. Section 43 starts with "where, after a dealer is assessed under Section 39, 40, 42 or 44....." and Rule 50 starts with "where a dealer has already been assessed under Section 39, 40, 42 or 44 and it is required to reopen....". Use of the above words in Section 43 and Rule 50(1) makes the legislative intent clear that only after a dealer is assessed or has already been assessed under Sections....
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....are left there": Crawford v. Spooner, [1846] 6 Moore P.C. 1, 8, 9. Where the language of the statute leads to manifest contra- diction 489 Of the apparent purpose of the enactment, the Court can, of course, adopt a construction which will carry out the obvious intention of the legislature. In doing so "a judge must not alter the material of which the Act is woven, but he can and should iron out the creases." : Per Denning, L.J., as he then was, Seaford Court Estates v. Asher, [1949] 2 All ER 155 (at 164). See the observation of Sarkar, J. in M. Pentiah & Ors. v. Muddala Veeramallapa & Ors., [1961] 2 S.C.R. 295 at 314 : (AIR 1961 SC 1107 at page 1115)." 14. In Union of India vs. Deoki Nandan Aggarwal, AIR 1992 SC 96, the Hon'ble Supreme Court held as under: "7.1. It is not the duty of the Court either to enlarge the scope of the legislation or the intention of the legislature when the language of the provision is plain and unambiguous. The Court cannot rewrite, recast or reframe the legislation for the very good reason that it has no power to legislate. The power to legislate has not been conferred on the courts. The Court cannot add words to a statute or read words into it which ....
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....n out of turn basis or for more than once in an audit cycle to prevent evasion of tax and ensure proper tax compliance." (Underlined for emphasis) Rule 41 of the OVAT Rules, 2005 deals with "Selection of dealers for tax audit". Sub-Rule (2) of Rule 41 provides as follows: "(2) The Commissioner, where considers it necessary to safeguard the interest of revenue or where any enquiry is required to be conducted on any specific issue or issues relating to any dealer, or class or classes of dealer, on being referred by an officer appointed under sub-section (2) of Section 3, may direct audit to be taken up." (Underlined for emphasis) 19. Perusal of the above provisions reveals that Section 41(2) of the OVAT Act read with Rule 41(2) of the OVAT Rules empowers the Commissioner to direct audit on any specific issue or issues relating to any dealer or class or classes of dealers on being referred to by subordinate officers to check tax evasion. Therefore, in case of an assessee, if the Revenue authorities decide not to exercise the power conferred under Section 41(2) of the OVAT Act read with Rule 41(2) of the OVAT Rules to make audit assessment for particular tax period and choose to ....