TaxTMI 
TaxTMI 
2018 (2) TMI 274
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.... which broke out in Guntur Mirchi yard; he had, thereafter, discontinued his chilli business and was, as at present, not carrying on any other business; the first respondent suddenly issued a demand notice in Form No.IV on 08.12.2014 asking him to pay Rs. 1,86,84,620/- as arrears of sales tax for the years 2002-2003, 2003-2004, 2004-2005 and 2005-2006; he had, thereafter, made a representation to the 1st respondent on 22.01.2015 stating all the facts; no action was taken on the representation; instead of disposing of his representation, the first respondent was threatening him to make payment of arrears of sales tax; and on the advice that the demand notice, issued in Form No.IV dated 08.12.2014, was barred by limitation as per the APGST Act, he was invoking the jurisdiction of this Court. The impugned demand notice in Form No.IV, a copy of which is filed along with the Writ Petition, is addressed to the petitioner as the proprietor of Vishnu Priya Chillies Traders. The petitioner was thereby called upon to pay Rs. 1,86,84,620/-, towards arrears of sales tax due for the years mentioned in the table, within fifteen days from the date of service of the notice. The table, in the dema....
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....aju that the matter be taken up on the next date to enable him to put forth his submissions in the main Writ Petition. When the matter was listed the next day on 05.01.2018 we had, at the request of Sri C. Ramachandra Raju, Learned Counsel for the petitioner, directed the matter to be posted after Sankranthi Vacation. On 22.01.2018, both Sri C. Ramachandra Raju, Learned Counsel for the petitioner and Sri S. Suribabu, Learned Special Standing Counsel for Commercial Taxes, made their submissions in the main Writ Petition and judgment was reserved on the same day. It is only on 25.01.2018, three days after judgment was reserved on 22.01.2018, that written submissions were filed by Sri C. Ramachandra Raju, Learned Counsel for the petitioners. In the counter-affidavit dated 19.10.2015, filed by the Deputy Commercial Tax Officer, it is stated that the petitioner was hitherto carrying on business of chillies; he had effected sale of chillies both within the State of Andhra Pradesh as well as outside the State; chillies were classified, under Entry 16 of the Second Schedule to the APGST Act, 1957, as taxable at the point of first purchase within the State at 4%; chillies, sold in the cour....
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....,66,911/-, to tax in the absence of "F" declaration forms; as the petitioner neither filed objections, nor sought time, nor did he file the F declaration Forms, the assessing authority completed the assessment by his proceedings dated 30.03.2007; the same was served by affixture on the business premises of the petitioner on 09.04.2007, as none were available at the said premises; and the demand, as per the assessment order, was Rs. 1,06,26,691/-. With respect to the assessment year 2004-2005 under the APGST Act, it is stated that the assessment, for the said year, was completed by proceedings dated 17.03.2008; and the balance tax due was Rs. 13,304/-. For the assessment year 2004-2005 under the CST Act, it is stated that a show cause notice dated 14.12.2007 was issued by the assessing authority, and was served on the petitioner by affixture on 11.01.2008, as it was informed to the process server that the petitioner had vacated the business premises; as there was no response from the petitioner thereto, the assessing authority had passed a final assessment order in his proceedings dated 17.03.2008; the same was served by affixture on the business premises of the petitioner on 24.03....
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....m No.IV dated 08.12.2014, under Section 25 of the Revenue Recovery Act, followed by Form No.V under Section 27 of the said Act; on 22.01.2015, the petitioner filed a letter, before the respondent, stating that he had already paid the taxes due for the same years, and all the records were gutted in the fire accident; he enclosed his profit and loss for the said years; the sales tax paid, as shown in the respective profit and loss accounts related to the tax paid under the APGST Act, and did not relate to the taxes due under the CST Act; he had issued notice of sale of land in Form No.VII under Section 36 of the Revenue Recovery Act, followed by Form VII-A for the sale of landed property, duly serving the same on the petitioner; the entire arrears of tax of Rs. 1,86,84,620/- are the taxes due from the petitioner which became payable on passing of the assessment orders; all transactions, and their details, were furnished by the petitioner himself at the time of assessment; and having participated in the assessment proceedings, for the respective assessment years, it was not correct on the part of the petitioner to contend that he was not aware of the arrears of taxes, and that the ent....
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....at he had closed his business in the year 2008; the allegation that some of the show cause notices, and assessment orders, were affixed to his business premises were false and unbelievable; the very fact that the respondents did not choose to send the alleged show cause notices and assessment orders to his residential address, proved beyond doubt that the alleged show cause notices and the assessment orders were not issued, and were not made on the date on which it is alleged to have been issued; they were created only in the year 2014, just before the demand notice, with ante-date to cover up their latches; the respondent had served the final notice dated 14.07.2014 at the petitioner's residential address, instead of affixing it to the then premises of his business; if the respondent had issued the show cause notice, and had passed the assessment orders, they should have sent it to him at his residential address; the allegation of the respondent that the show cause notices, and the assessment orders of those years, were affixed to the premises of his business was totally false and untenable; when the respondents knew he was not doing business since 2008, because of the fire accide....
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....ds i.e sale of goods from one State to another is alone taxable under the CST Act. Section 6A of the Central Sales Tax Act relates to burden of proof in case of transfer of goods claimed otherwise than by way of sale. Under sub-section (1) thereof, where any dealer claims that he is not liable to pay tax under the CST Act in respect of any goods, on the ground that the movement of such goods from one State to another was occasioned by reason of transfer of such goods by him to any other place of his business or to his agent or principal, as the case may be, and not by reason of sale, the burden of proving that the movement of those goods was so occasioned shall be on that dealer and, for this purpose, he may furnish to the assessing authority, within the prescribed time or within such further time as that authority may, for sufficient cause, permit, a declaration, duly filled and signed by the principal officer of the other place of business, or his agent or principal, as the case may be, containing the prescribed particulars in the prescribed form obtained from the prescribed authority, along with evidence of the despatch of such goods; and if the dealer fails to furnish such decl....
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....o tax, at the prescribed rate, under the CST Act. As is evident from the assertions in the counter-affidavit, the petitioner has been separately subjected to tax both under the APGST Act and the CST Act. The demand notice, impugned in the Writ Petition, was issued for non-payment of tax under the CST Act for the four year period i.e. 2002-03 to 2005-06. It is evident from the show-cause notices issued, and the assessment orders made under the CST Act, enclosed along with the counter-affidavit, that the petitioner was assessed to tax under the CST Act for his failure to submit the declarations in Form-F as proof that the goods were despatched outside the State on consignment to his agent. Payment of sales-tax by the petitioner, under the APGST Act, is on the sale of goods within the State and not for transfer of goods outside the State. It is evident, from the aforesaid orders, that the sales made by the petitioner within the State were not subjected to tax as inter-State sales, and it is only the consignment of goods, from the State of Andhra Pradesh to another State, which were treated as inter-State sales on the failure of the petitioner to submit Form-F declarations. The conten....
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....e the Andhra Pradesh General Sales Tax Act, 1957 which would apply in determining whether the assessment orders, for these years, are barred by limitation. Section 14 of the APGST Act relates to assessment of tax and under sub-section (1) thereof, if the assessing authority is satisfied that any return submitted under Section 13 is correct and complete, he shall assess the amount of tax payable by the dealer on the basis thereof; but if the return appears to him to be incorrect or incomplete he shall, after giving the dealer a reasonable opportunity of proving the correctness and completeness of the return submitted by him and making such inquiry as he deems necessary, assess, to the best of his judgment, the amount of tax due from the dealer. Assessment, under Section 14 of the APGST Act, is required to be made within a period of three years from the expiry of the year to which the assessment relates. As the period, for making assessment under Section 14(1) of the APGST Act, is three years from the expiry of the year to which the assessment relates, and expiry of the assessment year 2002-03 is on 31.03.2003, the three year period, for making assessment under Section 14(1) of the ....
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.... under law; and, in so far as the assessment orders, of the years 2002-03 and 2004-05 are concerned, even though the assessment orders are dated within the period of three years, they are also barred by limitation as they were never served on the petitioner, much less within a period of three years. As noted hereinabove the prescribed period of limitation, for passing an assessment order under the CST Act for the three year period 2002-03 to 2004-05, is, in view of Section 9(2) of the CST Act, governed by the provisions of Section 14(1) of the APGST Act. For the assessment year 2005-06 the period of limitation for passing an assessment order under the CST Act is, on a conjoint reading of Section 9(2) of the CST Act and Section 21(4) of the AP VAT Act, four years. As noted hereinabove all the assessment orders were made before expiry of the three year/four year period stipulated under Section 14(1) of the APGST Act and Section 21(4) of the AP VAT Act. The limitation prescribed is for an assessment order to be made, and not for it to be served. Inordinate delay in serving the assessment order may legitimize the presumption that the order was not passed on the date on which it is pu....
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.... point of law, is required to be substantiated by facts, the party raising the point, if he is the writ petitioner, must plead and prove such facts by evidence which must appear from the writ petition. If the facts are not pleaded, or the evidence in support of such facts, is not annexed to the writ petition, the Court will not entertain the point. (Bharat Singh v. State of Haryana (1988) 4 SCC 534). Much less adducing any proof of the assessment orders having been served belatedly, the petitioner has not even pleaded as such in the affidavit filed by him in support of the Writ Petition. It would be wholly inappropriate for us, in the present case, to examine, even in the absence of a plea in this regard in the writ affidavit, whether there was belated service of the assessment orders necessitating an inference being drawn that the assessment orders were either ante-dated or were passed after expiry of the period of limitation prescribed under Section 14(1) of the APGST Act and Section 21(4) of the AP VAT Act. IV. IS PASSING ASSESSMENT ORDERS, AT THE FAG END OF THE PERIOD OF LIMITATION, ILLEGAL? Sri C. Ramachandra Raju, Learned Counsel for the petitioner, would submit that, eve....
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.... filed in support of the Writ Petition) and, since no such contention has been urged in the Writ affidavit, this Court would not be justified in interfering with the impugned demand notice, based on such a contention urged for the first time in the reply affidavit, as the respondents did not have the opportunity of rebutting such allegations in the counter-affidavit filed by them earlier. V. ARE THESE ASSESSMENT ORDERS VOID AND LIABLE TO BE IGNORED? Sri C. Ramachandra Raju, Learned Counsel for the petitioner, would submit that these assessment orders, which were not served on the petitioner, are void and non-est in the eye of law and are liable to be ignored; and the contention of the respondents, that the petitioner did not challenge the validity of the assessment orders, has no legs to stand. It is not in dispute that the validity of the assessment orders made under the CST Act, for the years 2002-2003 to 2005-2006 non-payment of which necessitated the impugned demand notice to be issued, have not been subjected to challenge in this Writ Petition. The question which necessitates examination is whether, even in the absence of a challenge to the assessment orders, the demand no....
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....lidity upon its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity, and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders. (Wade and Forsyth in Administrative Law, Seventh Edn., 1994; Smith v. East Elloe Rural District Council (1956) A.C. 736, 769-770 : (1956) 2 W.L.R. 888; F. Hoffmann-La Roche & Co. A.G. v. Secretary of State for Trade and Industry (1975) A.C. 295; Lovelock v. Minister of Transport (1980) 40 P & C.R. 336; M.K. Kunhikannan Nambiar Manjeri Manikoth (1996) 1 SCC 435). Even where the brand of invalidity is plainly visible, there also the order can effectively be resisted in law only by obtaining the decision of the Court. (M.K. Kunhikannan Nambiar Manjeri Manikoth (1996) 1 SCC 435). Even if a decision is "void" or a "nullity", it remains in being unless and until some steps are taken before the courts to have it declared void. (Lovelock19). Even if an act is wrong and lacking in jurisdiction, it however subsists and remains fully effective unless and until it is set aside by a court of competent jurisdiction. Until its validity is challenged, its ....
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....s; because of the fire accident, which took place in his business premises in the year 2008, the petitioner had closed his business to the knowledge of the respondents; the entire records, and accounts of the business of the petitioner, were burnt in the fire accident; the crucial fact of the case was that the assessing authority had the residential address of the petitioner, which is evident from the fact that the final notice dated 14.07.2014 demanding the alleged arrears of CST, as well as the demand notice dated 08.12.2014, were sent to the petitioner's residential address; the assessing authority ought, therefore, to have sent the show-cause notice; and the assessment orders, to the residential address of the petitioner when, admittedly, the petitioner had closed his business in the year 2008, and nobody was available at the previous business premises of the petitioner from the year 2008; no reasons are forthcoming as to why the assessing authority chose to affix the show-cause notices, and the assessment orders, on the business premises instead of sending them to his known residential address; in the absence of any explanation the alleged affixture, of the show-cause notices ....
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.... no such contention has been urged in the affidavit filed in support of the Writ Petition. The contentions that the petitioner had submitted "F" declaration forms to the assessing authority as required under Section 6-A of the CST Act, the assessing authority did not pass any assessment orders for those years, the petitioner closed his business in 2008 to the knowledge of the respondents, because of the fire accident the entire records and books of accounts of the petitioner were burnt, the respondents were aware of his residential addresses when they passed the assessment orders, the respondents claim to have served the assessment orders by affixture only to cover up their lapse in not serving the show cause notices and the assessment orders on the petitioners, and the previous business premises of the petitioner is no longer his business premises, are all factual statements, which could have rebutted by the respondents in their counter-affidavit only if they had been asserted in the affidavit filed in support of the Writ Petition. As noted hereinabove, these contentions have been urged for the first time in the reply affidavit dated 22.01.2018, which was served on Sri S. Suribab....
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....he respondents, it is stated that, in reply to the final notice issued by the Commercial Tax Officer dated 14.07.2014, the petitioner had filed a letter before the Commercial Tax Officer on 07.08.2014 stating that he had closed his business; he had requested twenty days time to verify the same, and had requested that copies of the assessment orders be furnished to him. It is also stated, in the counteraffidavit, that they were handed over to the petitioner on 12.08.2014. These averments in the counter-affidavit have not been denied in the reply affidavit. It is clear, therefore, that the petitioner had copies of the assessment orders with him, when he filed the Writ Petition on 27.04.2015. Nothing prevented him from either questioning the validity of the assessment orders or raise these factual pleas, which have now been urged in the reply affidavit, in the affidavit filed in support of the Writ Petition. As these contentions, which are factual in nature, are urged for the first time in the reply affidavit dated 22.01.2018, the very day on which Writ Petition was finally heard and judgment reserved, they cannot be examined as the respondents could not have rebutted these factual as....
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....v. State of T.N (1974) 4 SCC 3; Gulam Mustafa v. State of Maharashtra AIR 1977 SC 448; Ajit Kumar Nag v. GM(PJ), Indian Oil Corpn (2005)7 SCC 764; and Dhampur Sugar (Kashipur) Ltd. v. State of Uttaranchal (2007) 8 SCC 418). Vague allegations of malafides are not enough to dislodge the burden resting on the person who makes the same, though what is required in this connection is not proof to the hilt. The abuse of authority must appear to be reasonably probable. (Express Newspapers (P) Ltd. v. Union of India (1986) 1 SCC 133). There has to be strong and convincing evidence to establish allegations of malafides specifically and definitely alleged in the petition. The presumption under law is in favour of the bonafides of the order unless contradicted by acceptable material. (Chandra Prakash Singh v. Purvanchal Gramin Bank (2008) 12 SCC 292; First Land Acquisition Collector v. Nirodhi Prakash Gangoli (2002) 4 SCC 160). While exercising the power of judicial review, the High Court should not readily accept the charge of malus animus laid against the State and its functionaries. The burden to prove the charge of malafides is always on the person who moves the court for invalidation of ....
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....) of the APGST Act requires the assessed tax to be paid by the dealer in such manner, and within such time, not being less than fifteen days from the date of service of the notice of assessment as may be specified in such notice. Failure on the part of the dealer to pay the tax, as assessed, would enable recovery of the said amounts as arrears of land revenue; and, consequently, Section 17(c)(1) confers the power of a Collector, under the A.P. Revenue Recovery Act, on the Deputy Commissioner for the purpose of recovery of any amount due under the Act. Likewise, under Section 22(1) of the AP VAT Act, the tax assessed under the said Act shall be payable in such manner and within such time as may be prescribed. Rule 25(5) of the AP VAT Rules, 2005 stipulates that the assessing authority shall serve upon a VAT dealer an order of the tax assessed in Form VAT 305, and the VAT dealer shall pay the same within the time and manner specified in the notice. Form VAT 305 stipulates that the amount of tax, as specified in the order, shall be paid within thirty days after receipt of the order, and failure to make payment would result in recovery proceedings being initiated. Section 25 of the AP ....