W.P.No.10810/2010
M.P.Rajya Power Loom Assistant Commissioner of Commercial
Bunkar Sahkari Tax
2.12.2010.
Shri Sumit Nema, counsel for the petitioner.
Shri Naman Nagrath, Additional Advocate General for
respondents.
The petitioner has sought following reliefs:
(I) To quash the assessment orders dated 30.3.10(P/3)
passed under MP VAT Act and Entry Tax Act by the
respondent no.1.
(II) To issue any other writ or order or direction or relief
which the Hon’ble Court deems fit and proper in the
facts and circumstances of the case.
(2) In short the contention of the petitioner is that without
issuing notice under sub-section (5) of Section 20 of Madhya
Pradesh VAT Act, 2002, proceedings for best judgment
assessment were initiated by respondent no.1 which
proceedings are without jurisdiction.
(3) Stating aforesaid, it was submitted by Shri Nema that the
order Annexure P/3 passed by respondent no.1 may be quashed.
(4) Shri Naman Nagrath, the learned Additional Advocate
General appearing for respondents, opposed the contention, who
submitted that in fact a notice in form no.20, as required under
sub- section (5) of Section 20 of the VAT Act was issued to the
petitioner and thereafter order in Annexure P/3 was passed. Apart
from this, order Annexure 3 is appealable and the petitioner may
avail alternative efficacious statutory remedy by filing appeal
before the appellate authority. On raising such contention, the
learned counsel for the petitioner submitted that in the
case,question of invoking provision of sub-section (5) of Section
20 of the VAT Act arises only after completion of proceedings
under sub-section (4) of Section 20 of the Act, but in this case
directly proceedings under sub-section (5) were initiated by
respondent no.1. So the entire proceedings may be quashed.
W.P.No.10810/2010
M.P.Rajya Power Loom Assistant Commissioner of Commercial
Bunkar Sahkari Tax
(4) In reply to this, Shri Naman Nagrath submitted that the
petitioner may raise all these contentions before the appellate
authority who shall consider and decide the objections of the
petitioner.
(5) To appreciate rival contentions of the parties, it would be
appropriate if sub-sections (4) and (5) of Section 20 of Madhya
Pradesh VAT Act are referred which read as under;
Section 20: Assessment of tax.
“(4) (a) The Commissioner shall serve on a
registered dealer referred to in the proviso to sub-
section(1)of this Section or sub-section (3) of Section
20-A or a registered dealer who is not eligible for
assessment under sub-section (1) of Section 20-A with
a notice in the prescribed form appointing a place which
may be the business premises or any other place and
day and directing him.-
(I) to appear in person or by an agent
entitled to appear in accordance with the provisions of
Section 23; or
(ii) to produce evidence or have it produced
in support of the returns; or.
(iii) to produce or cause to be produced
accounts, registers, cash memoranda or other
documents relating to his business.
(b) The Commissioner, after hearing the
registered dealer or his agent and examining the
evidence produced in compliance with the requirements
of sub-clause (ii) or sub-clause (iii) of clause (a) and
such further evidence as he may require, shall assess
or reassess him to tax.
(5) If a registered dealer referred to in clause (a) of
sub-section(4),-
(a) has not furnished returns and statement
in respect of any period by the prescribed date; or
(b) has knowingly furnished incomplete or
incorrect returns or statement for any period; or.
© having furnished such returns has failed
to comply with any of the terms of a notice issued under
clause (a) of sub-section (4); or
1. (I) has not maintained any accounts; or
(ii) the accounts maintained by him are not
in accordance with the provisions of sub-section
(1) of Section 39 or
W.P.No.10810/2010
M.P.Rajya Power Loom Assistant Commissioner of Commercial
Bunkar Sahkari Tax
(iii) has not regularly employed any method
of accounting; or
(iv) the method employed is such that in the
opinion of the Commissioner assessment cannot
properly be made on the basis thereof;
the Commissioner shall, after issue of a notice in the
prescribed form appointing a place which may be the
business premises or at the place specified in the notice
and in the prescribed manner, assess the dealer to the
best of his judgment”.
Sub Section (4) specifically provides issuance of notice in
prescribed form. Rule 29 of the M.P.VAT Rules, 2006 provides
issuance of a notice under sub-section (4) of Section 20 in form
no.19. A specific notice is required under form no.19 , under sub-
section(4) of Section 20 of the VAT Act and after receiving such
notice, if the requisite information is not furnished by the registered
dealer as required under sub-section (4), the Assessing Officer is
empowered to proceed under sub-section (5) of the Act (supra).
(6) It appears that in this case, no notice in form 19 was issued
to the petitioner and directly a notice in form 20 was issued. Sub
section (5) also provides issuance of notice in prescribed form by
the Assessing Officer. Rule 31 of the Rules provides issuance of
notice under sub section (5) of Section 20 in form no.20. It
appears that under the Rules two separate forms are provided for
issuance of notice under sub-section (4) and under sub-section
(5) and the assessing officer while proceeding under sub-section
(4) ought to have issued a notice in form 19 and then if the notice
is not complied with, then the Assessing Officer is empowered to
proceed under sub-section (5) by issuance of another notice as
prescribed in form 20. It appears that in this case, without issuing
notice in form 19, a notice in form 20 was issued and the
Assessing Officer because of non-furnishing of the requisite
information as required under sub-section (4) and proceeded
under sub-section (5) of the Act.
W.P.No.10810/2010
M.P.Rajya Power Loom Assistant Commissioner of Commercial
Bunkar Sahkari Tax
(7) The final order which has been passed by respondent
no.1 is an appellate order and the petitioner is having efficacious
alternative remedy of filing a statutory appeal against Annexure P/
3,so we do not find it appropriate to entertain this petition at this
juncture merely because of non-issuance of notice in form 19. The
petitioner may raise all these contentions before the appellate
authority by filing an appeal against the order Annexure P/3.
(8) In view of the aforesaid, we dispose of this matter with
following directions:
(i) The petitioner may file an appeal against the order
Annexure P/3(two in numbers) dated 17.6.2010 passed by
respondent no.1within a period of 30 days from today.
(ii) The appellate authority on filing such an appeal within 30
days from today shall entertain the appeal without going into
question of limitation and shall proceed to decide the appeal in
accordance with law.
(iii) The petitioner may raise all its contentions before the
appellate authority including non-issuance of notice in form 19 or
premature issuance of notice in form 20, who shall consider
grievance of the petitioner in accordance with law.
With the aforesaid directions, this petition is finally
disposed of with no order as to costs.
( Krishn Kumar Lahoti ) (Mrs.Sushma Shrivastava)
Judge Judge
JLL