M/s. Nag Enterprise vs State Of Tripura And Ors.

The petitioner being a dealer within the meaning of Section 2(b) of the Tripura Sale Tax Act, 1976 [TST Act in short] and Section 2(8) of the Tripura Value Added Tax Act, 2004 [TVAT Act in short], by means of this writ petition has challenged the action of the respondents, the respondent No.3 in particular, whereby the respondent No.3, the Superintendent of Taxes, Bishalgarh without serving any notice to the petitioner had assessed the turnover of the petitioner for the assessment years 2001-02, 2002-03, 2003-04, 2004-05, 2005-06 and 2006-07 at a time.

The petitioner has averred in the writ petition that suddenly he received one notice dated 10/11.03.2016 from the Certificate Proceeding being case No.148/Taxes/CERT [Superintendent of Taxes Vrs. M/s. Nag Enterprise] in terms of the order dated 22.02.2016 passed by the respondent No.4, the Certificate Officer, for realization of a sum of Rs.19,39,668.00. The petitioner was asked to pay the said amount within 15 days from the date of receipt of that notice. Else, the recovery would be made as the arrear of land revenue under Section 62 of the Tripura Land Revenue and Land Reforms Act, 1960. As the petitioner was quite at dark about the assessment, he sought for some accommodation so that he could gather the necessary documents. The petitioner asked such documents viz. (i) Permit Form XVIII A and (ii) Permit Form XVIII B under TST Act which were issued in the name of the petitioner's firm. (iii) assessment demand notice, (iv) assessment order (v) the return filed by the petitioner before the respondent No.3. The respondent No.3, according to the petitioner, supplied three number of demand notices viz. the demand notice dated 22.01.2009 for the assessment year 2001-02, demand notice dated 22.01.2009 for the year 2002- 03 and demand notice dated 22.01.2009 for the year 2003-04 along with a copy of the assessment order dated 20.01.2009 for the assessment period of 1999-2000 to 2004-05. The petitioner gathered such documents only on 04.04.2016. After having those documents from the office of the respondent No.2, the petitioner came to know that the assessment was carried out for the period of 1999-2000 to 2004-05 and the respondent No.3 passed a common assessment order on 20.01.2009. In the said assessment order, the tax with interest and the penalty at 150% as per provision of the TST Act was imposed on the petitioner. The tax and the penalty at 150% under Section 13 of the TST Act was determined against each assessment year viz. Rs.34,543/- for the assessment year 2000-01, Rs.5,75,056/- for the assessment year 2001-02 and Rs.2,05.388/- for the assessment year 2002-03 and thus the total amount of tax, interest and penalty came to be Rs.8,14,987/-. On the very day i.e. 20.01.2009 the demand notices were issued but the petitioner has claimed that he did not receive any such demand notice.

From the records, particularly from the order of assessment, it has surfaced that the notice under Section 9(4) of the TST Act was issued on the petitioner on 11.06.2006, 17.07.2008 and 31.12.2008 but the petitioner has asserted that he has not received any notice. On 20.01.2009, the assessment was finally completed in the manner as stated but there was no representation from the petitioner before the assessing authority. The petitioner was saddled with the liability of Rs.8,14,987/- for those consecutive assessment years holding that during the assessment year 2002-03, the return of the petitioner though was for nil but during that period the petitioner did receive three number of permits in Form XVIII A under the TST Act.

There is no dispute that Tripura Value Added Tax Act, 2004 has come in force w.e.f. 27.04.2005 by publishing the notification in the Tripura Gazette. Section 89 of the TVAT Act provides as under:

"89. Repeal and Savings :-

(1) The Tripura Sales Tax Act, 1976 (Act. No. ll of 1976), and the Tripura Additional Sales Tax Act 1990 (Act 6 of 1990) (hereinafter referred as the repealed Acts) as in force in the State of Tripura are hereby repealed from the date of commencement of this Act.

Provided that such repeal shall not affect the previous operation of the said Acts or any right, title, obligation or liability already acquired, accrued or incurred thereunder and subject there to, anything done or any action taken including any appointment, notification, notice, order, rule, form, regulation, certificate, license or permit in exercise of any power conferred by or under the said Acts, shall be valid and always be deemed to have been valid, during the period that Act was in force notwithstanding the repeal of the Act.

(1) A. The Tripura purchase Tax Act 1990 (Act no.9 of 1990) (here in after referred as repealed Act) as in force in the State of Tripura is hereby repealed.

Provided that such repeal shall not affect the previous operation of the said Act or any right, title, obligation or liability already acquired, accrued or incurred thereunder and subject there to, anything done or any action taken including any appointment, notification, notice, order, rule form, regulation, certificate, license or permit in exercise of any power conferred by or under the said Act, shall be valid and always be deemed to have been valid, during the period that Act was in force notwithstanding the repeal of the Act.

(2) Notwithstanding the Repeal of the Acts. -

(a) any action or proceedings already initiated under these Acts shall validly be continued under the provisions of this Act which relates to the period prior to the coming into force of this Act.

(b) any person liable to pay any tax, fee, penalty, interest or other amount under that Act for any period before coming into force of this Act, shall be levied, assessed and collected under the provisions of this Act as if this Act were in force during the period.

(3) All arrears of tax, interest, penalty, fee or other amount due at the commencement of this Act, whether assessed or levied before such commencement or assessed or levied after such commencement, may be recovered as if such tax, penalty, interest, fee or other amount is assessed or levied under the provisions of this Act and all methods of recovery including levy of interest, penalty or prosecution provided under this Act, shall apply to such arrears as if such amounts are assessed, levied and demanded under this Act.

(4) Notwithstanding anything contained in sub- section (1), any application, appeal, revision or other proceedings made or preferred to any authority under the said Act, and pending at the commencement of this Act, shall, after such commencement, be transferred to and disposed of by the officer or authority who would have had jurisdiction to entertain such application, appeal, revision or other proceedings under this Act as if it had been in force on the date on which such application, appeal, revision or other proceedings was made or preferred."

[Emphasis added]

Non-obstante clause clearly lays down that despite the repeal of the TST Act, any right, title, obligation or liabilities acquired, accrued or incurred under the previous Act shall continue to be valid notwithstanding the repeal of the Act. In this case, the action to enforce the obligation, liability, title or interest under the TST Act has been initiated after the TVAT Act came into force. In this context, clause (b) of Sub-Section 2 of the TVAT Act would apply. The said clause provides that any person liable to pay any tax, penalty, interest or other amount under the repealed Act for any period before coming into force of the TVAT Act, shall be levied, assessed and collected under the provisions of the TVAT Act as if that Act were in force.

Mr. B. N. Majumder, learned counsel appearing for the petitioner has categorically submitted that neither did the petitioner receive the notice dated 11.06.2006, 17.07.2008 and 31.12.2008, as stated, nor did he receive the assessment order dated 20.01.2009 or the demand notice in terms of the said assessment order, Annexure-P/4 collectively. According to Mr. B. N. Majumder, learned counsel, the assessment for the years 1999-2000, 2000-01, 2001-02, 2002-03, 2003-04 and 2004-05 the assessment was carried out in the year 2009 by the impugned assessment order dated 20.01.2006. In view of Section 33 of the TVAT Act, whose provisions shall only govern in the said assessment, no assessment can be carried out under Section 31 and 32 after expiry of the five years from the end of the tax period to which the assessment relates, subject to that, in case of offence under this Act for which proceeding for prosecution has been initiated, the limitation as specified in this sub-section shall not apply.

Mr. D. C. Nath, learned counsel appearing for the revenue has categorically submitted that no notice was issued on 11.06.2006 but the notice was actually issued on 11.06.2001, as revealed from the official records and further that three demand notices issued separately on 22.01.2009 for the assessment years 2000-01, 2001-02 and 2002-03 and those were sent by post in the address mentioned in the registration certificate by the respondent No.3.

On scrutiny of the assessment orders, it appears that a combined assessment order dated 20.01.2009 has been passed for the assessment period 1999-2000, 2000-01, 2001- 02, 2002-03, 2003-04 and 2004-05. In the said assessment order, simply it has been reflected that under Section 9 (4) of the Tripura Sale Tax Act, 1977 notices were sent on 11.06.2001, 10.08.2007, 17.07.2008 and 31.12.2008 asking the dealer to appear for assessment before the respondent No.2, but the dealer did not turn up and the assessing authority [the respondent No.3] has "finding no other alternative passed the assessment order ex parte under Section 9(4) of the TST Act, 1976".

Whether the petitioner was served with the notice duly or not, is a pertinent issue in the controversy. In view of that, by the order dated 19.04.2016, this court asked the revenue to produce the records to show whether any notice was issued to the petitioner before assessment or not. It appears from the order dated 27.04.2016 as under:

"Sri D. C. Nath has also produced before us two notices dated 11.06.2001 which bear endorsements on top that those have been sent by Registered post along with A.D. Sri Nath is directed to file the affidavit of the Superintendent of Taxes, enclosing therewith these two notices and the postal receipts by which the notices were sent. In the meantime Sri Nath may also obtain the information from the postal authorities whether these documents were sent to the petitioner or not. The petitioner on our asking states that he has not received any notice."

In terms of the said order dated 27.04.2016, the respondent No.3 has submitted one affidavit stating as under:

"10. That, in reply to the averments and/or contentions made in paragraph No.6 & 7 of the Writ Petition I state that, it is fact that 03(three) Nos. of Demand Notices issued separately on 22.01.2009 in the name of the dealer for the assessment year 2000-01, 2001-02 and 2002-03 respectively and sent by post as per address mentioned in the Registration Certificate at the material time by the then Superintendent of Taxes.

According to the dealer he did not receive any of the Notices issued on 11.06.2006, 17.07.2008 and 31.12.2008 before conducting assessment when no such notice dated 11.06.2006 was issued from the Office of the Superintendent of Taxes at any stage but the notice actually issued on 11.06.2001 as revealed from the available Office records. However, to be more confirmed that was taken up by the Superintendent of Taxes, Charge-V, Agartala under whose control the dealer was dealing in his business took up the matter with the Director, Postal Services, Agartala Division, Agartala vide his office letter No.F.2(28)-VAT/CH- V/2016/14, dated 28.04.2016 requesting for supply of information and documents related to serving of Notice dated 11.06.2001sent by Registered Post with AD to the dealer concerned M/s. Nag Enterprise, Sekerkote Bazar, Bishalgarh, P.S. Bishalgarh, District-Shipahijala, Tripura.

In response to the letter, the Superintendent of Post (Head Quarter), O/o. the Director of Postal Services, Agartala vide his office letter No.CPT/Corr/Part-III, dated 06.05.2016 stated that as per Postal Department rule, the preservation period of records in respect of Inland Registered articles is 1(one) year from the date of booking of the article and as per "Citizen Charter" of the Department of Posts, complaints are to be lodged with 60 (sixty) days of the transaction/availing of a service and hence, the issue being time barred case, their Office is unable to provide any information."

Mr. Nath, learned counsel has candidly submitted that the respondents, particularly the respondent No.3, is not having any record to show that the said notices were received by the petitioner. Moreover, in the reply, the respondents have categorically stated that the assessment was made by the respondent No.3 under the provisions of the TST Act on 20.01.2009. There cannot be any amount of dispute that Section 89 (2)(b) of the TVAT Act clearly provides that any person liable to pay tax, interest and penalty or other amount under that Act for any period before coming into force of the TVAT Act shall be levied assessed and collected under the provisions of the TVAT Act as if that Act were in force during that period. Therefore, on the face of the records, the assessment order dated 20.01.2009, for those assessment years could not have been setting apart the TST Act, rather it would have been assessed under the procedure of TVAT Act and the liability in terms of the repealed Act. This court in M/s. Joy Udyog Ltd. vs. The State of Tripura and Ors. [Judgment dated 10.03.2014 delivered in W.P.(C) No.196 of 2010] has held as under:

"We are aware that Clause (b) uses the words levied, assessed and collected but we are of the considered view that the obligations or rights which are to be assessed and collected have to be assessed and levied in accordance with the repealed Acts because the new Act cannot be retrospective in operation in respect of liabilities. Therefore, though the liability may have to be assessed in accordance with Tripura Sales Tax Act, 1976, the same will have to be assessed as per the procedure proscribed under the TVAT Act and the Officers exercising powers under the TVAT Act will have the jurisdiction to make assessment under the Sales Tax Act also."

Sub-Section 3 of Section 89 of the TVAT Act also makes it clear that all arrears of tax, interest, penalty, fee or other amount due as on 27.04.2005 whether assessed or levied before the said date may be recovered if such tax, penalty, interest, fee or other amount is levied under the new Act. The appellate and revisional authority shall also be as per the TVAT Act. Therefore, the intention of the legislature is abundantly clear that even the recovery shall have to be made under the TVAT Act.

Since there is no cogent evidence that the notice was duly served to the petitioner before the assessment or before the assessment order dated 20.01.2009 was passed, this court is of the view that the impugned assessment order, the demand notice from the said assessment order and the certificate proceeding for realization of the amount due are liable to be quashed. The respondent No.3 shall be at liberty to start the fresh assessment proceeding in accordance with law. It is made clear that if such proceedings are initiated, the assessee shall have the liberty to raise all objections including the objection that such proceedings are barred by limitation.

Having held so, the writ petition is allowed. However, there shall be no order as to costs.