RADHIKA ELECTROCAST (P) LIMITED Vs. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, LYONS RANGE AND ORS.

JUDGEMENT

(1.) THE applicant, Radhika Electro -Cast (P) Limited, is a company within the meaning of the Companies Act, 1956 having its office at 4, Clive Row, Mukti Chamber, Room No. 408, Kolkata 700 001 and deals in iron and steel goods. The applicant is registered under the West Bengal Value Added Tax Act, 2003 (in short, "the VAT Act") holding registration No. 19481051067. In this petition filed under Section 8 of the West Bengal Taxation Tribunal Act, 1987, the applicant has challenged the provisional assessment order dated March 6, 2007 passed by the Sales Tax Officer, Lyons Range Charge (in short, "the STO/LR") under Section 45 of the VAT Act for the period quarter ended on December 31, 2006 though in the cause title, it has been wrongly stated that the said order was passed by the Assistant Commissioner of Commercial Taxes, Lyons Range Charge. The order dated June 8, 2007 passed by the Deputy Commissioner of Commercial Taxes, Chowringhee Circle (in short, "DCCT/CH") confirming the order of provisional assessment as aforesaid has also been challenged.

(2.) SRI S. Chakrabarty, Advocate, appearing along with Sri D.B. Thakur, Advocate, on behalf of the petitioner, admitted that the applicant was a defaulter in the matter of submission of returns for the quarter ended on December 31, 2006 and in compliance with the notice issued by STO/LR, the return was duly submitted on March 5, 2007 as desired in memo No. 1345 dated February 23, 2007. It was also admitted by the learned advocate appearing on behalf of the petitioner that no tax according to the said return could be paid prior to submission of the return in question. This was duly explained by the applicant in his letter dated March 5, 2007 addressed to the STO/LR. The applicant also categorically stated in the said letter that tax liability and interest therein would be paid by April 10, 2007. It was further argued by the learned Advocate for the petitioner that the prayer contained in the said letter dated March 5, 2007 was not rejected by the STO/LR as the applicant did not receive any such communication. It was, therefore, contended that in the circumstances it was not proper for the authority concerned to complete the assessment on the following day, i.e., on March 6, 2007 without allowing any reasonable opportunity to the applicant. Secondly, the turnover for the quarter in question was determined by the authority concerned at Rs. 20,00,00,000 relying on the returns submitted for the quarter ended on December 31, 2006, September 30, 2006 and June 30, 2006. It was submitted by the learned advocate for the petitioner that the tax along with interest for the quarter ended on December 31, 2006 was duly paid by the applicant on April 13, 2007. He drew our attention to Sub -section (2) of Section 45 of the VAT Act which provides that the Commissioner or other authority, as referred to in Sub -section (1) of Section 45 of the VAT Act, shall assess the dealer on the basis of past returns, or past records, and where no such returns or records are available, on the basis of information received by the Commissioner and where the dealer fails to pay the net tax for any tax period within the date extended by the Commissioner, shall impose a penalty not exceeding twice the amount of tax so assessed and direct the dealer by a notice to pay the amount of tax assessed, interest determined and penalty imposed in such manner and within such date as may be prescribed. It was, in the circumstances, contended by the learned advocate that the concerned authorities could only take into consideration the relevant information relating to the transaction effected during the quarter ended on December 31, 2006. When at the time of making the provisional assessment, the assessing authority had in possession the returns for the quarter ending on December 31, 2006, he should not have taken into consideration the earlier returns. It was also stressed that the authorities concerned ought to have communicated his decision to the applicant with regard to the prayer for extension of time for making payment of the due tax in relation to the quarter ended on December 31, 2006. Since this was not done, the applicant presumed that his prayer was entertained and he was allowed time. In support of his submission, he relied on the decision of the Punjab and Haryana High Court, in the case of Harmanjit Trust v. Commissioner of Income -tax, Patiala I : [1984] 148 ITR 214, decision of the Patna High Court in the case of Commissioner of Income -tax, Bihar v. Ramdas and Sons : [1980] 123 ITR 889, decision of the Bombay High Court in the case of Lachman Chaturbhuj Java v. R.G. Nitsure : [1981] 132 ITR 631. In all these cases, the honourable judges held that in the event of an application praying for extension of time for submission of returns not being rejected, the applicant could reasonably presume that his prayer for extension was entertained by the authorities concerned.

(3.) AS regards the question of allowing reasonable opportunity in absence of any provision in the Act, learned advocate relied on a decision of the Supreme Court in the case of C.B. Gautam v. Union of India : [1993] 199 ITR 530. In that case, honourable judges of the Supreme Court observed, "the courts have generally read into the provisions of the relevant sections a requirement of giving a reasonable opportunity of being heard before an order is made which could have adverse civil consequences for the parties affected. This would be particularly so in a case where the validity of the section would be open to a serious challenge for want of such an opportunity". The ground taken by the applicant at the appellate forum regarding the period, on expiry of which a provisional assessment under Section 45(2) of the VAT Act could be made was not pressed at this stage by the learned advocate. Finally, it was submitted by the learned advocate that considering the facts and circumstances, the order dated March 6, 2007 of STO/LR and order dated June 8, 2007 of the DCCT/CH be set aside.