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2019 Supreme(Pat) 2084
IN THE HIGH COURT OF JUDICATURE AT PATNA
JYOTI SARAN and PARTHA SARTHY, JJ.
CWJC No. 8782 of 2019
(23.7.2019)
Sanyog Construction
Pvt. Ltd. ...Petitioners
vs.
State of Bihar & Ors. – Respondents
For the Petitioners: Mr. Chiranjiva Ranjan.
For the Respondents: Mr. Vikash Kumar.
For the Canara Bank : Mr. Ranjan Ghoshrave.
Headnote:
Bihar Value Added Tax Act, 2005 – Sections 31 and 33 read with Rules 22A and 25 – Reassessment order – Audit objection would constitute an information to lay a foundation for such reopening but exercise has to be within channel so prescribed – Being a case of deemed assessment, Accountant General had no jurisdiction to raise objection under Section 33 of Act – Be it a case of reopening of an assessment under Section 33 of Act read along side Rule 25 of Rules’ framed thereunder or an exercise under Section 31 read along side Rule 22A, in each of cases there is obligation cast by legislature on Assessing authority to draw satisfaction on audit objection before he proceeds to issue notice for reopening of assessment which essential discharge is absolutely lacking in present case for Deputy Commissioner has mechanically issued notice to petitioner on receipt of audit objection – Objection raised by Accountant General has to be tested within parameters of Section 33 read alongside Rule 25 but it cannot be used as a tool to justify an action under Section 31 and which exercise is void – Entire proceedings including assessment order, demand notice and attachment quashed and set aside – Writ petition allowed. (Paras 16, 17, 20 to 25)
Jyoti Saran, J. – Heard Mr. Chiranjiva Ranjan, learned counsel for the petitioner and Mr. Vikash Kumar, S.C.11.
2. With the consent of the parties the matter has been heard with the view to final disposal at the stage of admission itself.
3. This writ petition was initially filed praying for a writ in the nature of mandamus commanding the respondents to release the bank account of the petitioner which had since been attached under the order of the respondent No.3, Commercial Tax Officer, Patna North Circle, Patna in purported exercise of powers vested in him under Section 47 of the Bihar Value Added Tax Act, 2005 (hereinafter referred to as ‘the Act’) and the Rules framed thereunder. A copy of the notice issued under Section 47 is impugned at Annexure-4. The petitioner complains that the copy of the notice was not served on him.
4. The petitioner has also filed an interlocutory application bearing I.A. No.1 of 2019 to question the reassessment order dated 19.05.2015 passed by the Commercial Taxes Officer in purported exercise of jurisdiction under Section 31(2) of ‘the Act’ as well as the consequential demand raised thereunder, copies of which are impugned at Annexures- 2/1 and 2/2 respectively to the writ petition. The interlocutory application and the prayer of the petitioner to question the assessment orders has been allowed by us vide order passed on 19.07.2019.
5. The third prayer made in this writ petition is for a direction to the Commissioner, Commercial Taxes to decide the revision filed by the petitioner to question the exercise by the Commercial Taxes Officer under Section 74 of ‘the Act’, copy of which is at Annexure-3 to the writ petition.
6. A preliminary objection was raised by Mr. Vikash Kumar, S.C.11 on grounds that since the matter is pending in revision before the commissioner, the petitioner may raise all issues as raised herein before the Commissioner itself in the pending revision application.
7. Mr. Chiranjiva Ranjan, learned counsel for the petitioner while not disputing the objection on its merits, has relied upon a decision of this Court rendered in the case of M/s Tata Project Ltd. vs. the State of Bihar since reported in 2019(4) BLJ 387 to submit that since the issue which the petitioner intends to canvas already stands settled by this Court, a relegation of the petitioner to the jurisdiction of the Commissioner would be a formality. It is submitted that since the issue raised herein would invite an opinion as to whether the case is covered by the judgment in M/s Tata Project Ltd. (supra), this matter be considered by this Court itself especially where the petitioner questions the very lack of jurisdiction in the Assessing authority in reopening of the assessment.
8. Brief facts leading to the present writ petition is that the return filed by the petitioner under RT -III in terms of Section 24 of ‘the Act’ was within time and since it was not put to scrutiny, it became a case of deemed assessment under Section 26(1) of ‘the Act’. It is not in dispute that no departmental audit objection was raised on the returns filed in terms of Section 26(3) of ‘the Act’ for reopening of the proceedings.
9. The situation continued as thus when an audit objection was raised by the Accountant General through letter dated 03.11.2014 raising objections on the input tax credit claim raised by the petitioner in his return filed under RT-III. The Deputy Commissioner while issuing notice to the petitioner under Section 33 of ‘the Act’ initiated proceedings thereunder which has culminated in an order dated 19.05.2015 (Annexure 2/1), passed by the Commercial Tax Officer who assumed jurisdiction of the matter in the meanwhile and finding infirmity in the input tax credit so claimed by the petitioner that while rejecting the said claim, a tax liability of Rs. 4,73,854/- was raised and along side a penalty 3 times thereof to the tune of Rs. 14,21,562/- was imposed, to raise a demand of Rs. 18,95,116/- as manifest from demand notice at
