Amway India Enterprises (P) Limited vs State and Others

Brahma Singh Verma, J.—Sri Bharat Ji Agrawal, senior advocate assisted by S.K. Posti, learned counsel for the petitioner. Sri A.S. Singh, Rawat, Additional Advocate-General present for the State/respondents.

Heard.

By means of this writ petition, the petitioner has sought following relief:

(i) that a suitable writ, order or direction in the nature of certiorari be issued quashing the order dated June 16, 2011 (enclosed as annexure 3 to this petition).

(ii) that a suitable writ, order or direction in the nature of mandamus or prohibition be issued restraining or prohibiting the respondent Nos. 2 and 3 from taking any proceedings in pursuance of the order dated June 16, 2011.

(iii) that a suitable writ, order or direction in the nature of mandamus or prohibition be issued restraining or prohibiting the respondent No. 3 from taking any proceedings for imposition of tax or realization of any tax on the basis of survey dated March 15, 2011 of the order dated June 16, 2011.

(iv) that any other suitable writ, order or direction as this honourable court may deem fit and proper in the facts and circumstances of the case be also issued in favour of the petitioner.

Brief facts of the petition according to the petitioner are that the petitioner is a private limited company incorporated under the Indian Companies Act having its registered office at Plot No. 8, Jasola, New Delhi. The petitioner-company has its principal place of business at C-1/103, Indira Nagar, Dehradun, in the State of Uttarakhand and was registered under the U.P. Trade Tax Act and after coming into force of VAT Act, it is registered under the Uttarakhand Value Added Tax Act (hereinafter referred to as, "the VAT Act") and also under the Central Sales Tax Act.

The petitioner is carrying on the business of direct selling of the various goods and the same are being sold at the same price in different States. For this, proper books of accounts are maintained by the petitioner reflecting the true and correct., position of the business activity and the same are duly verified, accepted and assessed by the judicial assessing authorities during the course of assessment proceedings for different years.

The petitioner has stated in para 6 of the writ petition that regular assessments have also been completed u/s 25 of the VAT Act by respondent No. 3 for assessment years 2005-06, 2006-07 and 2007-08. Copies of the said assessment orders for abovementioned years are annexed as annexure Nos. 1 to 2 to this writ petition.

The learned counsel for the petitioner has contended that on March 15, 2011, a survey was made by the Deputy Commissioner, Commercial Taxes (SIB), Dehradun, in which nothing incriminating was found. Thereafter, the Deputy Commissioner, Commercial Taxes (SIB), sought certain information, which were duly supplied by the petitioner, During the course of survey, only on the basis of survey, an order was passed on June 16, 2011 (annexure No. 3 to the writ petition) by the Deputy Commissioner, Commercial Taxes (SIB), directing the petitioner to deposit Rs. 1,32,06,645 for the assessment years 2005-06, 2006-07, 2007-08, 2008-09, 2009-10 and 2010-11

The learned counsel for the petitioner further contended that the Deputy Commissioner, Commercial Taxes (SIB), is neither the assessing authority nor has any jurisdiction to pass such order. However, the assessment orders for assessment years 2005-06, 2006-07 and 2007-08, have already been completed, hence order for the same assessment year cannot be passed again. It is also submitted that the Deputy Commissioner, Commercial Taxes (SIB) is only an authority for making investigation and enquiry but he is not the assessing authority of the petitioner. Therefore, the Deputy Commissioner, Commercial Taxes (SIB), cannot pass order of the assessment creating demand. Hence the writ petition.

Counter-affidavit has been filed by the State in which it is admitted in para Nos. 27 to 31 that the Deputy Commissioner, Commercial Taxes (SIB) is not assessing authority. The relevant paragraph Nos. 27 to 31 are quoted below:

That the contents of para 44 of the writ petition as stated are not admitted. The letter which was dispatched to the dealer from SIB Unit on June 16, 2011 was only for information. The letter was not an assessment order. The report, in relation to the survey of the dealer conducted by the said unit on March 15, 2011, has been sent to the concerned assessing officer regarding which any further legal proceeding has to be conducted by the concerned assessing officer.

That regarding the contents of para 45 of the writ petition it is submitted that the dealer should not consider the letter dated June 16, 2011 of the SIB Unit as assessment order because no demand letter has been dispatched in from V u/s 8(2) of the Uttarakhand Value Added Tax Rules, 2005, to the dealer.

That the contents of para 46 of the writ petition as stated are not admitted. In this relation this is to explain that the letter sent to the dealer on June 16, 2011 is only for information. It is up to the will and discretion of the dealer to either deposit, lawfully, the tax and interest suggested in the light of facts mentioned in the letter or to deposit the tax after the assessing officer passes the assessment order and issues the demand letter. The dealer has not been compelled to deposit the tax and interest through the said letter.

That regarding the contents of para 47 of the writ petition it is submitted that the bases mentioned by the dealer in para 47, sub-para 1 to para 15, on which the writ petition has been filed, is irrelevant and imaginary because, the letter dated June 16, 2011 which has been considered as assessment order is NOT an assessment order.

That the relief from para 48, sub-paras (i) to (iv) sought by the dealer is not maintainable in the light of the above submission. All proceedings in relation to the dealer have to be conducted by the concerned assessing officer after giving reasonable opportunity of hearing to the dealer.

The assessing officer has to conduct proceedings only after giving a reasonable opportunity of hearing to the petitioner. Therefore, the impugned letter dated June 16, 2011 sent by the SIB Unit is not legally binding on the dealer or the concerned assessing officer.

In view of the above, it is clearly mentioned in para 27 of the counter-affidavit that the impugned letter which was dispatched to the dealer from the Deputy Commissioner, Commercial Taxes (SIB) on June 16, 2011 was only for information. The letter was not an assessment order. And specifically, it is again mentioned in para 29 of the counter-affidavit that it is up to the will and discretion of the dealer either to deposit, lawfully, the tax and interest suggested in the light of facts mentioned in the letter or to deposit the tax after the assessing officer passes the assessment order and issues the demand letter. In the last para 31 it is further mentioned in the counter-affidavit that the assessing officer has to conduct proceedings only after giving a reasonable opportunity of hearing to the petitioner. Therefore, the impugned letter dated June 16, 2011 sent by the SIB Unit is not binding on the dealer or the concerned assessing officer.

Without commenting on the merits, in view of the averments made in the para 27 to para 31 of the counter-affidavit, the direction given to the petitioner to deposit the amount is set aside and no recovery shall be made in pursuance of the impugned order. However, it is made clear that the assessing officer may make assessment in accordance with law. With the above observation, the writ petition is allowed.