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2026 DAILYLAW 10794 (GAU)

Parmeshwari Tea Company v. State of Assam

2026-01-06

N Unni Krishnan Nair

body2026
JUDGMENT : N. UNNI KRISHNAN NAIR, J. 1. Heard Dr. A. Todi, learned counsel for the petitioner. Also heard Mr. B. Gogoi, learned Additional Advocate General, Assam, appearing for the respondents. 2. As the above noted writ petitions arise out of the same transaction and give rise to similar questions of fact and law, they were taken up together for hearing and are being disposed of by this common order. 3. The challenge in the above noted writ petitions is to the Notice of Demand dated 07-10-2015 issued for the assessment years 2005-2006, 2006-2007 and 2007-2008, in pursuance to a common show-cause notice dated 03-10-2015. In WP(C).No.6496/2015, the notice of demand dated 07-10-2015 issued for the year 2005-2006 is under challenge, in WP(C)No.6530/2015, the challenge is to the Notice of Demand dated 07- 10-2015 issued for the Assessment Year 2006-2007. Similarly, in WP(C)No.6594/2015, the challenge is to the notice of Demand dated 07- 10-2015 along with the assessment order dated 07-10-2015 for the assessment year 2007-2008. 4. The petitioner company in the above noted writ petitions is engaged in the business of manufacturing of tea. For the purpose of carrying on its business, the petitioner purchases raw materials, i.e., tea leaves locally and use such materials in manufacture of tea in the petitioner's factory. The petitioner company is a registered dealer under the provisions of the Assam Value Added Tax Act, 2003, as well as under the Central Sale Tax Act, 1956. The petitioner company projects that it was regularly submitting its returns before the Superintendent of Taxes, Diphu unit and had also paid the taxes so assessed. The assessment in respect of the petitioner company for the year 2006-2007 was completed on 15.10.2009 and the assessment for the year 2007-2008 was completed on 13.04.2009. Poised thus, the Superintendent of Taxes, Diphu, issued a show-cause notice dated 03.10.2015 to the petitioner company, inter alia, alleging therein, that the petitioner company had failed to submit audit report as required under Section 62 (2) of the Assam Value Added Tax Act, 2003, in the prescribed form by a Chartered Accountant or a Cost Accountant as the case may be, for the last 3 (three) consecutive periods w.e.f.,2005-2006, 2006-2007 & 2007-2008. Accordingly, the petitioner company was held to be liable for payment of penalty of Rs.1,00,000/- (Rupees One Lakh), for each such year under Section 62 (3) of the Act. Accordingly, the petitioner company was held to be liable for payment of penalty of Rs.1,00,000/- (Rupees One Lakh), for each such year under Section 62 (3) of the Act. The petitioner company was directed to submit its show-cause in writing before the Superintendent of Taxes, Diphu, on or before 09.10.2015 by 11.30 a.m. The petitioner company on receiving the show-cause notice dated 03.10.2015 submitted its show-cause reply on 07.10.2015 denying the allegations leveled against them. It was submitted by the petitioner company that they had duly submitted their audit reports for the Assessment Years involved and the same was also projected to form the part of the case records. It was further projected that basing on the audit reports and other documents submitted along with the annual returns, the assessment of the return for the years involved, were completed by the authorities. Accordingly, the petitioner company had requested the authorities to reconsider the matter and drop the show-cause notice dated 03.10.2015. The Superintendent of Taxes, Diphu, vide 3 (three) separate Notices of Demand all dated 07.10.2015, issued individually for the years 2005- 2006, 2006-2007 & 2007-2008, upon carrying out an assessment/scrutiny proceeded to impose a penalty of Rs.1,00,000/- (Rupees One Lakh) upon the petitioner company under Section 62 (3) of the Act of 2003, for each of the assessment years involved. Being aggrieved the above noted writ petitions came to be instituted by the petitioner. 5. Dr. A. Todi, learned counsel for the petitioner had at the outset submitted that the Notice of Demand dated 07.10.2015 as issued for the assessment years, in question, would not be maintainable, inasmuch as, the same was issued without taking into account the show-cause reply submitted by the petitioner company on 07.10.2015, in pursuance to the show-cause notice dated 03.10.2015. He submits that the show-cause reply was required to be submitted by the petitioner on or before 09.10.2015 at 11.30 a.m. However, without taking into consideration the show-cause reply submitted by the petitioner on 07.10.2015, the Superintendent of Taxes, Diphu, proceeded to issue the notice of demand on 07.10.2015 for each of the assessment years involved. Accordingly, he submits that the notice of Demand dated 07.10.2015 being so issued without considering the reply submitted by the petitioner in the matter, would require an interference. Mr. Accordingly, he submits that the notice of Demand dated 07.10.2015 being so issued without considering the reply submitted by the petitioner in the matter, would require an interference. Mr. A. Todi, submits that the assessment of the petitioner company for the assessment years 2005-2006, 2006-2007 & 2007-2008, were completed in the manner required and accordingly, the same was not open for further assessment in view of the bar imposed by the provisions of Section 39 of the Act of 2003, which mandates that no assessment shall be made after expiry of 5 (five) years from the end of the year to which the assessment relates. Accordingly, he submits that the notice of Demand all dated 07.10.2015 impugned in the above noted writ petition would mandate an interference from this Court. 6. Per contra, Mr. B. Gogoi, learned Additional Advocate General, Assam, submits that the show-cause notice dated 03.10.2015 was issued to the petitioner company alleging violation of the provisions of Section 62 (2) of the Act of 2003, which mandates that the dealer shall furnish the report as mentioned in the provisions of Section 62 (1) within a period of 7 (seven) months from the end of the year to which the return relates. Mr. B. Gogoi, submits that the violation in the present proceedings being of the provisions of Section 62 (2), the bar under Section 39 would not be applicable in the present proceedings. Accordingly, he submits that the notice of demand for tax all dated 07.10.2015 impugned in the above noted writ petitions would not mandate an interference from this Court. 7. I have heard the learned counsel for the parties and have perused the materials available on record. 8. Although the respondents have not filed an affidavit in the above noted writ petitions, the para wise comments prepared by the Superintendent of Taxes at Diphu and submitted before the Commissioner of Taxes, Assam, vide a communication dated 29.05.2025 pertaining to all the 3 (three) writ petitions noted hereinabove was placed on record by the learned counsel for the respondents. A perusal of the said para wise comments would go to reveal that the assessment of the petitioner company under the provisions of the Act involved was completed by the respondents much before issuance of the impugned notice dated 03.10.2015. 9. A perusal of the said para wise comments would go to reveal that the assessment of the petitioner company under the provisions of the Act involved was completed by the respondents much before issuance of the impugned notice dated 03.10.2015. 9. The challenge presented in the above writ petitions having emanated from the show-cause notice dated 03.10.2015, the same being relevant is extracted hereinbelow: “GOVERNMENT OF ASSAM OFFICE OF THE SUPERINTENDENT OF TAXES:DIPHU:KARBI ANGLONG, ASSAM NO.DPU/TIN-18260032788/2005-06/2015/1727 Date: 3/10/15 To, M/s Parmeswari Tea Co. PO: Santipur, PS: Borpathar Dist: Karbi Anglong, Assam. Sub: Show-Cause. Whereas it has been observed that you have failed to submit Audit Report of your business as required U/S 62(2) of the AVAT Act, 2003 in the prescribed form by a Chartered Accountant under the Chartered Accountant Act, 1949 or a cost Accountant under the cost and works Accountants Act, 1959 within the prescribed time limit for the last three consecutive periods from 2005-06 to 2007-08 and you are therefore liable for penalty of Rs. 1,00,000.00 for each such year u/s 62(3) of the Act. You are therefore, asked to show-cause in writing either by yourself or through an authorized representative before the undersigned on or before 09-10-2015 at 11-30 A M. without fail. Failure to comply with the terms of this notice will invite other penal action also. Given under my hand and Seal of this office in this day of 3rd October/2015. (SC Mazumder) Superintendent of Taxes. DIPHU” 10. A perusal of the said show-cause notice would reveal that the Superintendent of Taxes, Diphu, had required the petitioner company to show-cause in writing on or before 09.10.2015 as to why a penalty of Rs.1,00,000/- (Rupees One Lakh) for each of the assessment years involved under Section 62(3) of the Act would not be imposed for failure on the part of the petitioner company to submit the audit report as required under the provisions of sub section (2) of Section 62 of the Act of 2003 from the prescribed authority. The petitioner in his reply had denied the said allegation and had projected that the audit reports were duly furnished and it was basing on the said audit reports and other documents submitted that the annual returns for the assessments years 2005-2006, 2006-2007 & 2007-2008, were examined and the assessments completed. 11. Section 39 of the Act of 2003, being relevant is extracted hereinbelow; "39. 11. Section 39 of the Act of 2003, being relevant is extracted hereinbelow; "39. No assessment after five years.- no assessment under the foregoing provisions of this Act, shall be made after the expiry of five years from the end of the year to which the assessment relates: Provided that in case of offence under this Act for which proceedings for prosecution has been initiated, the limitation as specified in this sub-section shall not apply." 12. The assessment for the years 2005-2006, 2006-2007 & 2007-2008, having been completed, the provisions of Section 39 of the Act of 2003 mandates that no assessments under the provisions of Section 35 and 36 shall be permissible to be made after the expiry of 5 years from the end of the year to which the assessment relates. Although, the proviso to Section 39 of the Act of 2003 culls out an exception in cases of offence under the Act, for which proceedings for prosecution has been initiated; wherein, it mandates that the period of limitation shall not apply. However, the proviso would have no application to the issue arising in the present proceedings. 13. A perusal of the materials brought on record would reveal that within the period of limitation as mandated under the provisions of Section 39 of the Act of 2003, the respondent authorities had not initiated any audit assessment under the provisions of Section 36 of the Act of 2003, with regard to the returns submitted by the petitioner under the provisions of sub-section (2) of Section 35 of the Act for the years 2005-2006, 2006-2007 and 2007-2008. 14. In view of the bar existing in the provisions under the provisions of Section 39 to carry out an assessment upon the conclusions after lapse of 5(five) years from the end of the year to which the assessment relates, admittedly in the present case on the date of issuance of the notice dated 07.10.2015, five years in respect of all the 3 (three) assessment years, in question, having lapsed, this Court is of the considered view that it was not open to the respondent authorities to carry out an assessment in the matter on any ground including the ground of non submission of an audit report i.e., the violation of provision of Section 62(2). 15. 15. Accordingly, the Notice Of Demand dated 07.10.2015 impugned in the above noted writ petitions imposing a penalty of Rs.1,00,000/- (Rupees One Lakh) upon the petitioner company for violation of the provisions of sub section 2 of Section 62 of the Act of 2003, would mandate an interference from this Court. 16. In WP(C).No.6594/2015 and WP(C).No.6530/2015 in addition to the challenge to the show-cause Notice Of Demand dated 07.10.2015 issued in pursuance to the common show-cause notice dated 03.10.2015, for the assessment years 2005-2006, 2006-2007 and 2007-2008 imposing a penalty of Rs.1,00,000/-(Rupees One Lakh) upon the petitioner company, further show-cause notices both dated 03.10.2015 and demand notices both dated 07.10.2015 which was issued to the petitioner company for the assessment year 2006-2007 and 2007-2008 was also under challenge. The show-cause notices being the same, the show-cause notice as involved in the proceeding of WP(C).No.6530/2015 being relevant is extracted hereinbelow; “ GOVERNMENT OF ASSAM OFFICE OF THE SUPERINTENDENT OF TAXES ::DIPHU:: KARBI ANGLONG, ASSAM. NO. DPU/CST-18139903808/2015-16/2015/1728 Date: 3/10/2015 To M/s Parmeswari Tea Co. PO:- Santipur, PS- Borpathar Dist Karbi Anglong, Assam. Sub: Show-Cause Whereas it is seen from the case records that out of stock transfer of goods made by you amounting to Rs. 18449907.00 undue exemption availed for Rs. 1271989.00 u/s 6 A of the CST Act/56 read with Rule 12(5) of the CST (R&T) Rules 1957, hence you are liable to tax amounting Rs. 127199.00 and interest of Rs. 87767.00 (a total of Rs. 214966.00) for the period 2006-07. Like wise on total Stock transfer of goods for Rs.2,42,69,977.00 you have availed undue exemption tax amounting to Rs. 14,72,265.00 and amounting to Rs. 7,50,855.00(a total of Rs. Rs. 22.23,120.00) for the year 2007-08 Moreover, you have exported goods worth Rs.11,50,143.00 outside the territory of India during the period 2007-08 on the strength of 'H' Forms only u/s 9(2) of the AVAT Act, 2003 within the scope of Section 5 of the CST Act, 1956 but you have failed to furnish duly filled in and signed Certificate of Export in Form-56 u/s 5 of the CST Act, 1956 as prescribed by Rule 37(1) of the AVAT Rule, 2005 at the time of assessment dated 23-04-2009. It is to be noted that you have never obtained any such Certificate of Export in Form-56 as prescribed by Rule 37(2) of the AVAT Rules, 2005. It is to be noted that you have never obtained any such Certificate of Export in Form-56 as prescribed by Rule 37(2) of the AVAT Rules, 2005. You have also failed to maintain the due account of every such Certificate of Export in Form-57 as prescribed by Rule 37(3) of the AVAT Rules, 2005. Thus, you are liable for a total tax of Rs. 15,87,279.00 and interest of Rs. 8,09,512.00 during the year 2007-08. You are hereby asked to Show-Cause in writing either by yourself or through an authorized representative before the undersigned on or before 09-10- 2015 at 10-30 A.M. without fail, regarding the matters. Given under my hand and Seal of this office on this day of 3 rd October 2015. (S.C. Mazumder) Superintendent of Taxes DIPHU” 17. The petitioner responded to the said show-cause notice vide his show-cause reply dated 07.10.2015. However, the Superintendent of Taxes, Diphu, vide order dated 07.10.2015, determined an amount of Rs.2,14,966/- (Rupees Two Lakhs Fourteen Thousand Nine Hundred Sixty Six) for the assessment year 2006-2007 and Rs.23,96,791/- (Rupees Twenty Three Lakhs Ninety Six Thousand Seven Hundred Ninety One) for the assessment year 2007-2008, as payable by the Company on account of tax and penalty. The assessment was shown to have been made under Section 36 of the Act of 2003 read with Section 9(2) of the Central Sales Tax Act, 1956, on 07.10.2015. 18. A perusal of the notice dated 03.10.2015, would go to reveal that what was contemplated, therein was that the returns filed by the petitioner for the period 2005-2006 to 2007-2008 were selected for audit assessment. The said notice was so issued for carrying out an audit assessment in terms of the provisions of Section 36 of the Act of 2003; and it is to be seen as to whether such assessment could have been made in the matter. In terms of the provisions of Section 39 of the Act of 2003, the period of limitation for carrying out audit assessment under the provisions of Section 36 of the Act, i.e. for the years 2005-2006, 2006-2007 and 2007-2008 had lapsed on 31.03.2011, 31.03.2012 and 31.03.2013 respectively. Accordingly, this Court is of the considered view that the audit assessment sought to be made, invoking the provisions of Section 36 of the Act of 2003, vide issuance of the notice dated 03.10.2015, was clearly barred by limitation. 19. Accordingly, this Court is of the considered view that the audit assessment sought to be made, invoking the provisions of Section 36 of the Act of 2003, vide issuance of the notice dated 03.10.2015, was clearly barred by limitation. 19. Accordingly, the assessment order dated 07.10.2015 issued upon an assessment made under Section 36 of the Act of 2003 r/w Section 9(2) of the CGST Act of 1956, would also mandate an interference from this Court. 20. In view of the above discussions, the Notices Of Demand dated 07.10.2015 impugned in the above noted 3 (three) writ petitions imposing upon the petitioner, penalty of Rs.1,00,000/- (Rupees One Lakh) for violation of the provisions of Sub Section 2 of Section 62 stands set aside. 21. Further the assessment orders dated 07.10.2015, for the assessment years 2006-2007 as well as 2007-2008 as impugned in WP(C).No.6530/2015 and WP(C).No.6594/2015 also stand set aside. 22. in view of the above conclusions drawn by this Court, the writ petitions being WP(C).No.6594/2015, WP(C).No.6496/2015 and WP(C).No.6530/2015 stand allowed.