TaxTMI 
TaxTMI 
2024 (2) TMI 1246
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....3 to the petitioner in all three writ petitions as well as the orders by which the assessments for the years 2012-13, 2013-14 and 2014-15 were revised and the turnover escaped assessment and short payment of taxes were determined and subsequent demand notices dated 09.09.2020 are prima facie illegal and without jurisdiction, and contrary to the provisions of Section 20 of the Nagaland (Sales of Petroleum and Petroleum Products, including Motor Spirit and Lubricants) Act, 1967. 4. Writ Petition No. 155/2022 pertains to the show cause notice, order and demand notice for the assessment year 2014-2015. Writ Petition No. 156/2020 pertains to the show cause notice, order and demand notice for the assessment year 2012-2013 and Writ Petition No. 157/2020 pertains to the show cause notice, order and demand notice pertaining to the year 2013-2014. 5. The petitioner company is a Government of India undertaking incorporated under the Companies Act, 1956 having its registered office at Mumbai. The petitioner company is engaged in the business of refining the crude petroleum and selling and distribution of petroleum products throughout the country. During the relevant point of time, the pe....
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....nd liable for necessary action under appropriate provisions of the Act and Rules, and Whereas, cross verification of the statements produced so far by you before this Court with the records filed by you during assessment proceedings etc., reveals the following inconsistencies; Tax Period 2011-12: 1. Form "C" statement shows that there was purchase of LPG worth Rs. 250205245/- during the period. However, the Sales figures as per ADS (excluding tax) shows Rs. 245768240/-only 2. IOC (MD) record shows that it has received 104.5 KL of LPG from IOC (AOD) during the period. Whether such stock were issued inclusive of tax or not and why? 3. No Trading Account was made available before this Court nor filed at the time of assessment. 4. As per IOC (MD) record, 4439.1 KL, worth Rs. 3347476/-of SKO-IND was received from IOC (ADD). Whether such stock were issued inclusive of tax or not and why? 5. CST Sales declared Including tax was Rs. 386152884/-. However, CST Sales supported by Form "C" was Rs. 355538897/- only. Consequently, there is possible evasion of tax by way of assessing sales turnover of Rs. 30613987/- at a lower rate of....
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....68372044 @5% Tax Period 2013-14: 1. Statutory Forms statement shows that there was Purchase of LPG worth Rs. 576825709/-during the period. However, the Sales figures as per AOS (excluding tax) shows Rs. 286878435/-only. 2. No Trading Account was produced before this Court nor filed at the time of assessment. 3. As per IOC (MD) record, 334.142KL and 3962.18 KL of LPG (ND&IND) and LPG (D&S) was received from IOC (AOD). Whether such stock were issued Inclusive of tax or not and why? 4. Explain the difference of amount by Rs. 2519.720/- in the CST Net Turnover declared as against figures shown in the break-up (333273822-330754102). Short calculation and short payment of tax by Rs. 79999/- against the turnover of Rs. 329984754/- @2% (6599695- 6519696). 5. CST Sales declared including tax was Rs. 336504450/-. However, CST Sales supported by Form "C" was Rs. 330602310/-only. Consequently, there is possible evasion of tax by way of assessing sales turnover of Rs. 5902140/- at a lower rate of 2% instead of 12% resulting in short assessment and short payment of tax by Rs. 590214/-. 6. No record of purchase of MS, HSD and SKD w....
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....e Chamber and to further show cause in writing and with all supporting documents as to why the returns filed by you for the period should not be rejected an incorrect and incomplete and necessary action including an order under Section 20 of the Nagaland (Sales of Petroleum Etc..) Taxation Act, 1967 should not be passed against you. Date Time Tax period 19.05.2020 11 am 2011-12 and 2012-13 20.05.2020 11 am 2013-14 and 2014-15 Take notice that in the event of your further failure to comply with the terms of this notice, I shall be at liberty to initiate appropriate action against you under the Act and also pass revision order under Section 20 of the Act ex-parte without any further reference to you." 8. Thereafter, the respondent No. 3 passed a final order in purported exercise of powers under Section 20 of the Nagaland (Sales of Petroleum and Petroleum Products, including Motor Spirit and Lubricants) Taxation Act, 1967 by order dated 07.09.2020, whereby the assessment order dated 16.01.2015 passed by Superintendent of Taxes for the assessment year 2012-2013 was revised and the turnover escaped assessment and short payment of taxes was determin....
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.... Rs. 1488483/- SKO Rs. 22320436/- 5% Rs. 1116021/- Total Rs. 69,13,470/- Add surcharges @ 5% Rs. 3,45,673/- Total dues payable Rs. 72,59,143/- 9. Similarly, by order dated 08.09.2020, the respondent No. 3 revised the assessment order dated 20.01.2015, passed by the respondent No. 4 and turnover and escaped assessment and short payment of taxes for the assessment year 2013-2014 was determined as hereinunder: - Tax Period 2013-14 "1. Statutory Forms statement shows that there was purchase of LPG worth Rs. 576825709/- during the period. The Sales figures as per AOS (excluding tax) is Rs. 286878435/-only. As per Ms IOC Ltd (MD) (referred as MD for short) statement in Format-111, 334.142 Kl and 3962.18 KL of LPG (ND & IND) and LPG (D&S) respectively were received from AOD. The value calculated on the basis of statement declared and filed by MD at the time of assessment during 2012-13 comes to Rs. 132554207/- only (334.142 KL + 3962.18 KL-4296.32 KL x 30852.95 per KL) Therefore, LPG value amounting to Rs. 157393067/- (Rs 576825709 (Total purchases)- Rs 286878435 (Total sales)- Rs 132554207 (Total ....
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.... "1. Total Purchase of HSD and MS during the period Statutory Form statement shows that there was purchase of MS & HSD worth Rs. 16,54,44,195/- during the period but the purchase invoices was not available on record for verification. The total sales of HSD and MS declared was Rs. 994274502/-. Out of which 62% accounts for HSD and the remaining 38% accounts for MS. Therefore, in the absence of any break up figure of purchases, the consolidated purchase value declared for HSD and MS amounting to Rs. 16,54,44,195/- is split up on the basis of 62% and 38% respectively as under: Items Total purchases (AOD) Sales Figures Diff HSD Rs. 10,25,75,400/- Rs. 61,23,85,702/- 509810302 MS Rs. 6,28,68,795/- Rs. 38,18,88,800/- 319020005 Total Rs. 16,54,44,195/- Rs. 99,42,74,502/- 828830307 Cross examination of Ms IOC Ltd (MD) (referred as MD for short) Statement in Format-III reveals that the Firm has received 35500 KL, 12948 KL and 10260 KL of HSD, MS and SKO respectively from MD. The value of the stocks received is calculated on the basis of sales declared by MD in Format III in respect of SKO and Ms HPCL in respect of HSD and MS during the....
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...., the respondent No. 4. 13. In these writ petitions, the aforementioned show cause notice dated 28.04.2020, the orders passed by the respondent No. 3 determining the turnover escaping assessment and short payment of taxes for the aforementioned period, as well as notice of demand dated 09.09.2020 for the assessment years 2012-13, 2013-14 and 2014-15, issued against the petitioner by the respondents have been impugned. 14. Dr. A. Saraf, learned senior counsel for the petitioner has submitted that the impugned show cause notice dated 28.04.2020 and the orders passed by respondent No. 3 determining the turnover escaping assessment and short payment of taxes during the period under consideration and subsequent demand notice dated 09.09.2020 are prima facie illegal and without jurisdiction and contrary to the provision of Section 20 of the Nagaland (Sales of Petroleum and Petroleum Products, including Motor Spirit and Lubricants) Taxation Act, 1967. He has also submitted that the pre- requisite to the exercise of the power of Suo motu revision by the Commissioner under Section 20 of the Act is that the order passed by any person appointed under Section 5 of the Act to assist him i....
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.... and others" reported in (1990) 1 GLR 449, in which this court was dealing with the power of suo-motu revision of the Commissioner under Section 21 of the Tripura Sales Tax Act, 1976, which is in pari-materia with the Section 20 of the Nagaland (Sales of Petroleum and Petroleum Products, including Motor Spirit and Lubricants) Taxation Act, 1967, wherein it was observed as follows: "7. From a reading of Sub-section (1) of Section 21 it is clear that the power of suo motu revision can be exercised by the Commissioner only if, on examination of the records of any proceedings under this Act, he considers that any order passed therein by any person appointed to assist him is "erroneous in so far as it is prejudicial to the interest of the revenue". It is, therefore, not an arbitrary or unchartered power. It can be exercised only on fulfilment of the requirements laid down in Sub-section (1). The consideration of the Commissioner as to whether an order is erroneous in so far as it is prejudicial to the interest of the revenue, must be based on materials available on the record of the proceedings called for by him. If there are no materials on record on the basis of which it can ....
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..... If an officer acting in accordance with law makes certain assessment and determines the turnover of a dealer, the same cannot be branded as erroneous by the Commissioner simply because according to him the order should have been written more elaborately. This section does not visualise a case of substitution of judgment of the Commissioner for that of the officer, who passed the order, unless the decision of the subordinate officer is held to be erroneous. Cases may be visualised where assessing officer while making an assessment examines the accounts, makes his enquiries, applies his mind to the facts and circumstances of the case and determines the turnover either by accepting the accounts or by making some estimates himself. The Commissioner on perusal of the records may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the turnover at a higher figure than the one determined by the assessing officer. That would not vest the Commissioner with power to re- examine the accounts and determine the turnover himself at a higher figure. It is because the officer has exercised the quasi-judicial ....
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....drej Sara Lee Limited Vs. Excise and Taxation Officers-cum-Assessing Authority and Others" reported in 2023 SCC online SC 95. 23. Learned Senior Counsel for the petitioner has also cited a ruling of the Supreme Court of India in the case of "Commissioner of Income Tax, Mumbai Vs. Amitabh Bachchan" reported in (2016) 11 SCC 748, wherein it was observed that when the Act provides different shades of power on different authority to deal with the orders of assessment passed by the primary authority, the said powers are to be exercised within the areas specifically delineated by the Act, and the exercise of power under one provision cannot trench upon the powers available under another provision of the Act. 24. Learned Senior Counsel for the petitioner has submitted that in the instant case, the Commissioner has himself by calling for documents from the assessee and conducting further inquiries to find out as to whether the assessee has submitted all documents and paper in support of the assessment made by him and paid all the due taxes which is due from him has far exceeded the power which has been conferred on the Commissioner under Section 20(1) of the Act. The power which is c....
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....r, escaping assessment and short payment of taxes during the period under consideration and subsequent demand notice dated 09.09.2020 are illegal and without jurisdiction and therefore liable to be set aside. 28. Learned Senior Counsel for the petitioner has also submitted that the impugned notices dated 28/04/2020 were issued under Section 20 of the Nagaland (Sales of Petroleum and Petroleum Products, including Motor Spirit and Lubricants) Taxation Act, 1967, whereas the impugned orders determined the alleged escape turnover not only under the Nagaland Act of 1967 but also under the Central Sales Tax Act, 1956. Similarly, the demand notice included the demand not only under Nagaland Act of 1967 but also under the Central Sales Tax Act, 1956. Hence, it is submitted by the learned Senior Counsel for the petitioner that the said orders determining the alleged escape turnover and subsequent demand notices are without jurisdiction and not tenable in law. 29. On the other hand, Mr. Moa Imchen, learned Senior Government Counsel for the respondents has submitted that the petitioner has approached this Court without exhausting all alternative remedies available to it. It is submitted....
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....vailable to it under the statutes has approached this Court by invoking its writ jurisdiction, which according to learned Senior Government Counsel, same is not available to the petitioner under the facts and circumstances of the case, and therefore, he has prayed for dismissing the writ petitions. 35. I have considered the submissions of learned counsel for both sides and have gone through the materials on record very carefully, including the pleadings of the parties supported by affidavits. 36. First of all, let me discuss the question of maintainability of the present writ petitions. The Supreme Court of India in the case of "Godrej Sara Lee Limited Vs. Excise and Taxation Officers-cum-Assessing Authority and Others (Supra) has observed as follows: "4. Before answering the questions, we feel the urge to say a few words on the exercise of writ powers conferred by Article 226 of the Constitution having come across certain orders passed by the high courts holding writ petitions as "not maintainable" merely because the alternative remedy provided by the relevant statutes has not been pursued by the parties desirous of invocation of the writ jurisdiction. The power to ....
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....f discretion of the high courts, writ remedy being discretionary. A writ petition despite being maintainable may not be entertained by a high court for very many reasons or relief could even be refused to the petitioner, despite setting up a sound legal point, if grant of the claimed relief would not further public interest. Hence, dismissal of a writ petition by a high court on the ground that the petitioner has not availed the alternative remedy without, however, examining whether an exceptional case has been made out for such entertainment would not be proper." "6. At the end of the last century, this Court in paragraph 15 of the its decision reported in (1998) 8 SCC 1 (Whirlpool Corporation v. Registrar of Trade Marks, Mumbai) carved out the exceptions on the existence whereof a Writ Court would be justified in entertaining a writ petition despite the party approaching it not having availed the alternative remedy provided by the statute. The same read as under: (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is violation of principles of natural justice; (iii) where the order or the proceedings....
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....writ petitions are maintainable. 39. Relevant provision of Section 20 of the Nagaland (Sales of Petroleum and Petroleum Products, including Motor Spirit and Lubricants) Taxation Rules, 1967 are quoted herein below. "Section 20 (1)- The Commissioner may call for and examine the records of any proceeding under this Act, and if he considers that any order passed therein by any person appointed under Section 5 to assist him, is erroneous in so far as it is prejudicial to the interests of revenue, he may, after giving the dealer an opportunity of being heard, and after making or causing to be made such inquiry as he deems necessary to pass such orders thereon as the circumstances of the case justify including an order enhancing or modifying the assessment and directing a fresh assessment. (2) In the case of any order other than the order to which subsection(1) applies, passed by any person appointed under Section 5 to assist him, the Commissioner may either of his own motion or on a petition by a dealer for revision, call for the records of any proceeding under the Act in which such order has been passed, and may make such inquiry or cause any inquiry to be made, an....
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....e have seen herein before that for exercising powers under Section 20 of the Nagaland (Sales of Petroleum and Petroleum Products, including Motor Spirit and Lubricants) Taxation Act , 1967, the Commissioner must come to a conclusion that the orders passed by the person appointed under Section 5 of the Act to assist him is erroneous, however, in the instant case, bare perusal of the orders dated 09.09.2020 passed in connection with the Assessment year 2014-2015, 2012-2013 and 2013-2014, it appears that though it is observed therein that the assessment orders are erroneous so far as it is prejudicial to interest of revenue, however, it is also mentioned therein that it requires further inquiry and verification, which itself shows that the respondent No. 3 had not arrive at a conclusion that the order of assessment passed by the Assessing Officer were erroneous, rather, it appears that the respondent No. 3 had embarked upon reverification and recalculation of the assessment proceedings which were already examined by the assessing authority at the time of completion of the original assessment. Further, it also appears that the Commissioner has to arrive at a conclusion that the assessm....
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.... a conclusion that the assessment orders are erroneous and prejudicial to the interest of revenue. 44. The power under Section 20 of the Act cannot be exercised by the Commissioner without satisfying the two components mentioned in the Section 20(1) of the Act, the Commissioner does not have the power to reexamine the accounts and determine the turnover himself at a higher figure merely because he is of the opinion that the estimate made by the assessing authority was on the lower side. Further, even if we consider that the Act bestows the Commissioner all powers available under the Act, still the respondent No. 3 cannot exercise the power which is available under a different provision of the Act in purported exercise of power available in another provision of the Act, i.e., in the instant case, by initiating proceedings under Section 20 of the Act, the respondent No. 3 cannot exercise the powers vested in him under Section 14 and 13 of the Act, as in case of powers under Section 20, the decision that the assessment order is erroneous must be on the basis of materials available from records and such conclusion must precede the initiation of proceedings under section 20, whereas,....