Assistant Commercial Taxes Officer, Ward-II vs Radhika Jewellers

Jainendra Kumar Ranka, J.—In all these cases, the revision petitions were admitted on the following questions of law:

(i) Whether, in the facts and circumstances of the case, the Rajasthan Tax Board was justified in law and has not acted illegally and perversely in confirming the order of the Deputy Commissioner (Appeals) deleting the order of assessing officer charging enhanced composition amount and interest on the basis of subsequent notification making amendment in the Composition Scheme?

(ii) Whether, in the facts and circumstances of the case, the Rajasthan Tax Board has not acted illegally and perversely in holding that the notification amending the Composition Scheme cannot be given effect on the existing dealers having composition certificate?

These sales tax revision petitions have come up assailing the order passed by the Rajasthan Tax Board, Ajmer, dated December 24, 2008 rejecting appeals filed by the petitioner-Department. Since common facts and question of law are involved in all these sales tax revision petitions, therefore, these are being decided by a common order.

Facts of S.B. Sales Tax Revision Petition No. 154 of 2009 (ACTO, Alwar v. Radhika Jewellers, Bajaja Bazar, Alwar) are being incorporated.

Brief facts are that respondents being the jewellers and dealing in bullion, opted for Scheme formulated by the Government of Rajasthan popularly known as "Composition Scheme" for Sarafa/bullion dealers and the said Scheme came into operation in the year 1999 vide Notification No. 1095 : S.O. 95/R4(4)FD/Tax Div/99-227 dated May 7, 1999. This was applicable for Jewellers dealing in bullion articles, ornaments and jewellery made of gold and silver notified u/s 5 of the Rajasthan Sales Tax Act, 1994 (for short, "the Act of 1994"). This Scheme was for a limited period of 5 years and came into force from April 1, 1999. It is prescribed in the said Scheme that one, who opts for the said Scheme had to pay sales tax in accordance with the Scheme and on payment of desired amount, nothing was required to be done by the assessee. It was even prescribed in the said Composition Scheme that there was no necessity of passing an assessment order every year rather, the composition certificate was sufficient to deem it as an assessment order. The dispute in all these revision petitions is to the effect that subsequent to the said Composition Scheme, amendments came to be made in the said Composition Scheme vide Notification No. 1430 : F. 4(30) FD/Tax-Div/2002-166 dated March 22, 2002 and Notification No. 1703 : F. 4(4) FD/Tax-Div/99-pt-65 dated June 28, 2003 whereby, even all those dealers, who opted for Composition Scheme with effect from 1999 had to shell out some more additional amount in the light of the subsequent notifications.

It is an admitted fact that the assessing officer passed an order in the case of S.B. Sales Tax Revision Petition No. 154 of 2009 (ACTO, Alwar v. Radhika Jewellers, Bajaja Bazar, Alwar) on August 2, 2004 modifying the order and intimating the assessee-respondents that in the light of the notifications dated March 22, 2002 and June 28, 2003, the amount payable is worked to Rs. 9,100 and after adjustment of the amount paid as per Composition Scheme, which comes to Rs. 7,560 an additional amount of Rs. 1,540 was levied on the respondents. It is important to observe that prior to issuance of the said assessment order, no notice whatsoever was issued to the respondents-assessees and straightway, assessment order as aforesaid was passed creating an additional tax liability.

The assessee-respondents challenged the same before the learned Deputy Commissioner (Appeals), who after detailed analysis of the facts and circumstances and in view of the order passed by the Rajasthan Taxation Tribunal, Ajmer, quashed the said order passed by the petitioner-assessing-officer mainly on the issue that without any show-cause notice and since additional liability was created, therefore, for want of show-cause notice, order passed is unjustified. It has also been held by the Deputy Commissioner (Appeals) that once the Composition Scheme came into force, therefore, with retrospective effect, it cannot be modified.

Dissatisfied with passing of the said order by the Deputy Commissioner (Appeals), the petitioner challenged the order before the Rajasthan Tax Board, Ajmer, who vide common order dated December 24, 2008 as aforesaid, dismissed the appeals preferred by the petitioner. Hence, these sales tax revision petitions by the petitioner-Department.

Shri R.B. Mathur, learned counsel for the petitioner-Department submitted that amendments so brought in by the Government of Rajasthan on March 22, 2002 and June 28, 2003 had retrospective operation and Composition Scheme as prevailing on it was brought into in year 1999, was slightly modified and since there was a retrospective operation of the said Scheme, therefore, the assessing officer-the petitioner was correct and justified in levying the additional tax by passing an assessment order, which is well reasoned. The petitioner-Department was bound by the notifications and he correctly came to the conclusion while passing the order impugned and thus he pleaded that both, the Rajasthan Tax Board, Ajmer, as well as the Deputy Commissioner (Appeals) were not justified in quashing the claim of the petitioner when it is as per the amendments brought into and duly conveyed through press release and other modes by the Government of Rajasthan. Accordingly, he pleaded to reverse the findings of the said two appellate authorities.

Despite notice duly served upon the respondents-assessees, no one has put in appearance on their behalf.

After hearing learned counsel for the petitioner-Department and perusing the orders passed by the various authorities, in my opinion, Tax Board was justified in dismissing the appeals filed by the petitioner-Department and confirming the order of the Deputy Commissioner (Appeals). As has been stated hereinabove, vide notification dated May 7, 1999, the Composition Scheme was brought into force for registered Sarafa dealers other than MMTC Ltd., RBI or SBI or any other bank or any other corporate body, dealing in bullion, articles, ornaments and jewellery made of gold and silver notified u/s 5 of the Act of 1994, which came into force with effect from April 1, 1999. The said Scheme was for a limited period of five years and all the respondents herein opted for the said Scheme and thus availed of benefits arising out of the said Composition Scheme. It has been prescribed in the said Scheme that even no assessment order is required to be passed in a case where Composition Scheme has been opted by the assessees. It is also prescribed that even the certificate issued on account of Composition Scheme, is deemed sufficient to hold it as an assessment order, only requirement was that the assessee need to have paid the due tax regularly as per the Composition Scheme and deposited the same in the Government Treasury account and informing the assessing officer and once he complied with these directives as contained in the Scheme, therefore, nothing further was to be done by the respondents-assessees. It is surprising that how without a proper show-cause notice, additional amount of tax could be imposed on the respondents-assessees in the light of subsequent two notifications referred to hereinabove. Even if two subsequent notifications were brought in by amendments then, it is trite law that a person has to be heard prior to imposition of any tax liability or otherwise. No person can be condemned unheard and it is settled proposition that in all such cases, principles of natural justice have to be followed particularly in fiscal laws, where without any proper show-cause notice, no liability can be inflicted upon the other side. Therefore, Tax Board as well as the Deputy Commissioner (Appeals) both have merely quashed the order passed by the assessing-officer on the prime issue that no notice was issued by the assessing-officer prior to imposition of the said additional tax.

It was the duty of the assessing-officer to convey to the respondents-assessees and bring into their knowledge about the subsequent two notifications. One, who opted for Composition Scheme and complying with the directives of the said Scheme paying regular tax for 5 years during which period, the Composition Scheme was applicable then, if there was a sudden change in the amendment or a fresh notification then, it ought to be conveyed to the other side.

Since both the aforesaid notifications curtailed the right of the respondents-assessees, according to me, by no stretch of imagination, they can be said to retrospective and thus they can be said to be prospective in nature only. Right conferred by the statute for some beneficial scheme cannot be curtailed by later notifications when the same benefits have accrued to the assessees and given by the Department. All necessary benefits ought to have been given its due till the period of scheme, which arise out of the said scheme.

This court in the case of Assistant Commercial Taxes Officer v. Yogeshwar Goyal & Sons, Alwar [2013] 66 VST 120 (Raj) (in SBSTR No. 66 of 2011 and SBSTR No. 198 of 2011 vide order dated February 1, 2013) came to the same conclusion.

In the light of the above facts and circumstances, in my view, the Tax Board as well as the Deputy Commissioner (Appeals) came to the correct conclusion. Consequently, the questions of law are decided against the petitioner-Department and in favour of the respondents-assessees. There will be no order as to costs.