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2018 DIGILAW 752 (GAU)

Kamakhya Coal Tar Industries v. State of Assam

2018-05-07

AJIT SINGH, PRASANTA KUMAR DEKA

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JUDGMENT : AJIT SINGH, J. This order passed in Revision Petition No. 5/2016 shall also decide Revision Petition No. 6/2016, as they involve the same issue and were heard together. Both these Revision Petitions are directed against the common judgment dated 2.11.2015 passed by the Assam Board of Revenue, whereby it has dismissed petitioner's Appeal Nos. 53 STA/2013 and 54 STA/2013 affirming the order dated 8.5.2013, as passed by Respondent No. 3 - Joint Commissioner of Taxes, who in turn has affirmed the assessment orders dated 4.2.2012 passed by Respondent No. 2 - Superintendent of Taxes. 2. The Revision Petitions relate to assessment years 2007-2008 and 2008-2009. 3. Petitioner No. 1 is a Partnership Firm and Petitioner No. 2 is one of its Partners. It is engaged in the business of purchase and sale of coal tar/wood tar, putty etc. It is also registered as dealer under the Assam Value Added Tax Act, 2003 (in short “Act of 2003”). The petitioners submitted monthly tax returns for the Assessment Years 2007-2008 and 2008-2009 under the Act of 2003 along with 4% payment of tax for items - coal tar and putty. Respondent No. 2 - Superintendent of Taxes scrutinized the returns of both years in exercise of powers conferred under Section 33 of the Act of 2003 and found the same to be in order. He then accepted the charge of tax on turnover of coal tar and putty at 4%. But, later, after more than one year, Respondent No. 2 issued notice dated 9.12.2011 to the petitioners for re-scrutiny of the same returns on the ground that putty and coal tar were misclassified as these items were taxable at 12.5%. This notice was issued under Rule 19 of the Assam Value Added Tax Rules, 2005 (in short “Rules, 2005”) The petitioners, in their reply dated 19.12.2011, agreed that tax payable on putty was 12.5%, but denied that coal tar was wrongly classified and reiterated that tax payable on it was 4%. Respondent No. 2, in his wisdom, also vide communication dated 20.12.2011, sought clarification from Respondent No. 4 - Commissioner of Taxes regarding taxability of coal tar. And Respondent No. 4, vide his order dated 27.1.2012, clarified that coal tar is taxable at 13.5%. Respondent No. 2, in his wisdom, also vide communication dated 20.12.2011, sought clarification from Respondent No. 4 - Commissioner of Taxes regarding taxability of coal tar. And Respondent No. 4, vide his order dated 27.1.2012, clarified that coal tar is taxable at 13.5%. Respondent No. 2, armed with the said clarification, suddenly, by exercising powers conferred under Section 34 of the Act of 2003, vide orders dated 4.2.2012, assessed the petitioner for coal tar at 12.5% as an unclassified item covered under Entry I of the Fifth Schedule. 4. The petitioners, aggrieved with the assessment orders dated 4.2.2012, filed two separate Revision Petitions for the two Assessment Years before Respondent No. 3 - Joint Commissioner of Taxes, who, vide common order dated 8.5.2013, dismissed both the Revision Petitions. The petitioners then preferred appeals before the Board of Revenue, but again, they were dismissed summarily, vide order dated 1.8.2013. The petitioners, undeterred, preferred Revision Petition Nos. 14/2014 and 15/2015 in the High Court and this High Court, vide orders dated 11.6.2014 and 18.6.2014, set aside the order dated 1.8.2013 passed by the Board of Revenue with a direction that Revision Petitions be decided afresh. The Board of Revenue, after remand, by the common judgment dated 2.11.2015, has again dismissed the petitioners' appeals. It is in this background, the petitioners have filed the present Revision Petitions. 5. It is argued on behalf of the petitioners that assessment orders dated 4.2.2012 passed by Respondent No. 2 in exercise of powers conferred under Section 34 of the Act of 2003 are illegal and unsustainable under law as the same were passed without any prior notice and without an opportunity of hearing to the petitioners. The learned Senior Additional Advocate General, Assam, in reply, has defended the orders on the ground that petitioners were given reasonable opportunity of being heard before the orders were passed. 6. Pursuant to our direction, the learned Senior Additional Advocate General, Assam has produced the original records pertaining to passing of assessment orders dated 4.2.2012. Admittedly, assessment orders dated 4.2.2012 were passed by Respondent No. 2 in exercise of powers conferred under Section 34 of the Act of 2003. This section deals with provisional assessment of a dealer by the prescribed authority. It also clearly provides that no provisional assessment shall be made unless the dealer has been given reasonable opportunity of being heard. Admittedly, assessment orders dated 4.2.2012 were passed by Respondent No. 2 in exercise of powers conferred under Section 34 of the Act of 2003. This section deals with provisional assessment of a dealer by the prescribed authority. It also clearly provides that no provisional assessment shall be made unless the dealer has been given reasonable opportunity of being heard. As mentioned above, it is the case of petitioners that no prior notice for provisional assessment was issued before passing of assessment orders dated 4.2.2012. The learned Senior Additional Advocate General, Assam has fairly stated that despite carefully going through the original records, he could not find any show cause notice issued to the petitioners for provisional assessment. The petitioners were, thus, not given fair opportunity of hearing before the assessment orders were passed. This being the situation, the assessment orders passed by Respondent No. 2 are apparently in violation of the provisions of Section 34 of the Act of 2003 and also the principles of natural justice. The notice mentioned in the assessment orders are actually in respect to curing of defects detected during scrutiny of returns as provided under Section 33 of the Act of 2003. It does not fulfill the compliance of giving an opportunity of hearing mandated under Section 34 of the Act of 2003. We, accordingly, set aside the assessment orders dated 4.2.2012 passed by Respondent No. 2. In the result, we also set aside the assessment orders dated 4.2.2012 and 8.5.2013 passed by Respondent Nos. 2 and 3, respectively. 7. Revision Petitions are allowed.