HIGH COURT OF TRIPURA

AGARTALA

WP(C) 1110 of 2019

Shri Pankaj Behari Saha

S/o of Late Anil Chandra Saha,

carrying on the business of Bonded Warehouse

in the name and style of Udaipur Bonded Ware House

at New Town Road, Near Mahadeb Dighi, Udaipur, Go mati Tripura

-----Petitioner(s)

Versus

1. The State of Tripura

Represented by the Chief Secretary,

Government of Tripura, Agartala, New Civil Secretariat,

PO- Kunjaban, P.S- New Capital Complex (NCC),

District- West Tripura, PIN 799006

2. The Principal Secretary,

Finance Department, Government of Tripura, Agartala

New Civil Secretariat, PO- Kunjaban,

PS- New Capital Complex (NCC),

District- West Tripura, PIN 799006

3. The Commissioner of Taxes,

Government of Tripura

P.N. Complex, Gurkhabasti, PO- Kunjaban,

P.S- New Capital Complex (NCC), Agartala,

District- West Tripura, Pin code- 799006

4. The Superintendent of Taxes, Agartala

Charge- Udaipur, PO- Udaipur, PS- Udaipur,

District- Gomati, Pin code-799120

5. The Superintendent of Taxes,

Tax Audit Cell, HQ, Agartala

P.N. Complex Gurkhabasti, PO- Kunjaban,

PS- New Capital Complex (NCC), Agartala,

District- West Tripura, Pin Code- 799006

-----Respondent(s)

For Appellant(s) : Mr. A. K Saraf, Sr. Adv

Mr. B. Roy, Adv.

For Respondent(s) : Mr. S. S. Dey, Adv. General

Mr. A. Nandi, Adv.

Date of hearing : 13.07.2022

Date of pronouncement : 03.08.2022.

Whether fit for reporting : Yes

Page 2 of 20

HON‟BLE MR. JUSTICE T. AMARNATH GOUD

HON‟BLE MR.JUSTICE ARINDAM LODH

Judgment & Order

The present writ petition is filed by the petitioner under Article 226

of the Constitution of India to issue a writ in the nature of certiorari or mandamus

or appropriate writ or direction or order

(i) For enforcement of the fundamental rights of the petitioner guaranteed

under Part-III of the Constitution of India.

(ii) Violation of Articles 14, 19(1) (g) and 21 of the Constitution of India.

(iii) Legality and validity of Notification dated 04.06.2018 issued by the

Commissioner of Taxes, Government of Tripura in the purported exercise of

powers under Section 85 of the Tripura Value Added Tax Act, 2004 delegating the

powers of the Commissioner of Taxes under Section 31 of the Act to all the

Superintendent of taxes posted in Tax Audit Cell to be exercised within the State

of Tripura with effect from 31.03.2018.

(iv) Notice No. F(1)/ST/TAX/AUDIT/UDP/2018/2723 -24 dated 04.04.2018

issued by the Superintendent of Taxes, Tax Audit Cell, HQ, Gurkhabasti, Agartala

in purported exercise of powers under section 31(1) of the Tripura VAT Act, 2004

directing the petitioner to produce or cause to be produced the accounts and

documents relating to the turnover of sales and/or purchase for the period from

2013-2014 to 2017-2018 for scrutiny of the returns furnished by the petitioner.

(v) Notice No.F(1)/ST/TAX/AUDIT/UDP/2018/2083 dated 22.02.2019 issued

by the Superintendent of Taxes, Tax Audit Cell, HQ, Gurkhabasti, Agartala

directing the petitioner to submit the segregated accounts of opening stock,

closing stock, fright charge, import fee, bid money etc, in respect of imported and

domestic goods for assessment years 2013-14 to 2016-17 for assessment.

Page 3 of 20

(vi) Notice No.F(1)/ST/TAX/AUDIT/UDP2018/2777 dated 26.02.2019

issued by the Superintendent of Taxes, Tax Audit Cell, HQ, Gurkhabasti, Agartala

directing the petitioner to show cause as to why penalty @ Rs.100/ - per day

should not be imposed for the alleged delay in submission of returns subject to a

maximum of Rs.10,000/ - as per section 25(4)(d) of Tripura VAT Act, 2004 for

assessment years 2013-14 to 2016-17.

(vii) Notice No.F(1)/ST/TAX/AUDIT/UDP/2018/3034 dated 01.03.2019

issued by the Superintendent of Taxes, Tax Audit Cell, HQ, Gurkhabasti, Agartala

informing the petitioner that as per the returns furnished, the dealer was liable to

pay the balance amount of tax stated in the notice for the Month of May, 2013 to

January, 2014 during the assessment year 2013 -14 and directing the petitioner to

show cause as to why amount of balance tax payable along with interest shall not

be recovered and also to show cause as to why penalty should not be imposed as

per the provisions of Tripura VAT Act, 2004 and Rules, 2005.

(viii) Notice No. F(1)ST/TAX/AUDIT/UDP/2018/3496 dated 12.03 .2019

issued by the Superintendent of Taxes, Tax Audit Cell, HQ, Gurkhabasti, Agartala

informing the petitioner that as per Rule 20 of the Tripura VAT Rules, 2005 every

registered dealer liable to pay tax have to deposit 90% of the tax for the month or

quarter ending on 31

st

March of a year within 31

st

March of that year and since

90% of the total tax was not deposited within 31

st

March during the year 2013-14

to 2016-17 directed the petitioner to show cause as to why interest should not e

charged on the balance amount of 90% of tax payable as per the provisions of

Tripura VAT, Act, 2004 and Rules, 2005.

(ix) Notice No. F(1)ST/TAX/AUDIT/UDP/2018/3605 dated 16.03.2019

issued by the Superintendent of Taxes, Tax Audit Cell, HQ, Gurkhabasti, Agartala

directing the petitioner to show cause as to why the different in amount of

purchase should not be considered as concealment and as to why the same should

not be put to tax by determining its turnover and as to why in addition to VAT,

Page 4 of 20

due, interest and penalty should not be impose for concealment of purchase and

its relative turnover.

(x) Order of Assessment dated 30.03.2019 passed by the Superintendent of

Taxes, Tax Audit Cell, HQ, Agartala for the Assessment year 2013-2014 to 2016-

2017 in purported exercise of powers under Section 31 of the Tripura VAT Act,

2004 and the Notices of Demand issued in pursuance thereof.

(xi) Legality and validity of proviso to Rule 20 of the Tripura VAT Rules,

2005 providing for deposit of 90% of the tax payable for the month or qua rter

ending on 31

st

March of a year within 31

st

March itself.

[2] The facts of the case are that the petitioner is carrying on the

business of bonded ware house in the name & style of M/s Udaipur Bonded Ware

House, Udaipur, Gomati, Tripura under a valid license issued by the Competent

Authority under the Tripura Excise Act 1987 & Rules made under. Petitioner also

has a valid registration TIN 16111128003 issued under Tripura VAT Act 2004. The

nature of business of the petitioner is to purchase goods from local and also from

various parts of India by duly paying taxes as applicable like Sales Tax, Excise

Duties etc.

[3] The respondent No.3 the Commissioner of Taxes, Government of

Tripura has delegated respondent No.4, the Superintendent of Taxes, Agartala the

powers including power of assessment under Section 31 of Assam VAT Act 2004

which has been adopted by State of Tripura under Section 85 of Tripura VAT Act

vide notification dated 01.04.2006 and later another notification dated 04.06.2018

has also been issued delegating powers on respondent No.5. Both are extracted as

under:

Page 5 of 20

NO.F.1-1(2)-TAX/92/5125 -186

GOVERNMENT OF TIPURA

OFFICE OF THE COMMISSIONER OF TAXES

KAR BHAWAN: AGARTALA

Dated, Agartala, the 01

st

April, 2006.

N O T I F I C A T I O N

In exercise of the powers conferred by Section 85 of

the Tripura value Added Tax Act, 2004 (Tripura Act No.1 of

2005) the powers of the Commissioner of Taxes under Section

10, 19, 20, 22, 24, 25, 27, 30, 31, 32, 34, 36, 37, 38, 39, 40,

43, 44, 46, 48 (4), 48 (5) 49 52, 53(3), 59, 60, 66(2), 75, 77

and 80 of the Said Act are hereby delegated to the

Superintendent of Taxes w.e.f 27

th

April, 2005.

The Concerned officers will exercise the powers so

delegated to them in their respective arrears.

(M.S. Bhattacharjee)

Commissioner of Taxes

Government of Tripura

Copy to :-

1. The Manager, Tripura Government Press, Bordowali, Agartala

with request to publish the above Notification in the extra -

ordinary issue of Tripura Gazette, 10 (ten) copies of the above

Notification may please be sent to the Commissioner of Taxes

immediately.

2. All Inspector of Taxes…………………….

3. The Asstt. Commissioner of Taxes, Agartala and Churaibari

Check-Post.

4. Dy. Commissioner of Taxes, Agartala/Churaibari.

5. The Superintendent of Taxes, Charge -I/II/III/IV/V/VI/

Agartala P.Tax, Lux. Tax etc. Agartala /Udaipur /

Dharmangar/Kailashahar/Belonia/Ambassa/Agartala

Airport/Checkpost/Vigilance Cell Agartala.

6. Statistical Section/Establishment Section/General Section.

7. Guard File.

01/04/2006

(M.S. Bhattacharjee)

Commissioner of Taxes

Government of Tripura

Page 6 of 20

NO.F.1-1(2)-TAX/9

GOVERNMENT OF TIPURA

OFFICE OF THE COMMISSIONER OF TAXES

P.N. COMPLEX, GURKHABASTI, AGARTALA

Dated, Agartala, the 04

TH

June, 2018

N O T I F I C A T I O N

In continuation of this office, Notification vide No.F.1 -

1(2)-TAX/92/5125 -186 dated 1

st

April, 2006 and in exercise

of the power conferred by section 85 of the Tripura Value

Added Tax Act, 2004 (Tripura Act.No.1 of 2005) the powers of

the Commissioner of T axes under Section 31 of the act is

hereby delegated to all the Superintendent of Taxes posted in

Tax Audit Cell and they shall exercise the powers to entire

state of Tripura.

This shall take effect from 31

st

March, 2018.

(Nagesh Kumar, B, IAS)

Commissioner of Taxes

Government of Tripura

Copy to :-

1. The Manager, Tripura Government Press, Bordowali, Agartala with

request to publish the above Notification in the extra -ordinary issue of

Tripura Gazette, 10 (ten) copies of the above Notification may please be

sent to the Commissioner of Taxes, Tripura.

2. The Additional Commissioner of Taxes, Agartala for information.

3. The Asstt. Commissioner of Taxes, Agartala for information.

4. The Superintendent of Taxes, Charge -

I/II/III/IV/V/VI/VII/VII/ VIII/Tax Audit Cell/ Agartala Enforcement

Wing/Udaipur Enforcement Wing/Choraibari Enforcement Wing/Udaipur

/Belonia/Ambassa/Teliamura/Bishalgarh/Dharmanagar/Kailashar.

5. Statistical Section/General Section/Establishment Section/ Guard File.

(Nagesh Kumar, B, IAS)

Commissioner of Taxes

Government of Tripura

[4] In pursuance of the powers delegated , the respondents No.5 for

assessment year 2013-14 to 2016-17 issued demand notices in terms of the

assessment orders dated 30.03.2019 . The said orders were challenged by the

petitioner by way of WP(C) 560 of 2019. Initially there was an interim order dated

30.03.2019 in favour of the petitioner directing the respondents not to take any

Page 7 of 20

coercive steps. Later in view of fresh facts placed by the respondents the said writ

petition has been dismissed as withdrawn on 25.06.2019 with liberty to file a fresh

writ petition.

[5] The petitioner by way of present writ petition has challenged the

notification dated 04.06.2018 whereby the respondent No.3 invoking powers

under Section 85 of Tripura VAT Act 2004 has delegated the powers under Section

31 of the Act to all the Superintendent of Taxes in Tax Audit Cell. The respondent

No.5 is one of such Superintendent. In pursuance of such delegation, the

respondent No.5 has issued notices under the Act on several occasions like notice

dated 04.04.2018 to produce accounts & documents relating to turn over of

sales/purchase for 2013-14 to 2017-2018, notice dated 22.02.2019 issued under

Section 31 informing the petitioner that he failed to submit accounts; notice dated

26.02.2019, stating the petitioner failed to furnish returns for assessment year

2013-14 to 2016-17 within stipulated time, hence imposition of penalty under

Section 25(4)(d) of Tripura VAT Act, notice dated 01.03.2019 to pay balance tax

per earlier notices in May 2013 to January 2014 during Assessment year 2013 -

2014 and recovery thereof with interest; notice dated 12.03.2019 for charging

interest as per Rule 20 of Tripura VAT Rules 2005 framed under Tripura VAT Act

2004; notice dated 16.03.2019 to show cause treating the action of petitioner in

concealing statements and hence imposition of tax determining on turnover.

[6] To all above notices, petitioner has submitted his reply dated

06.03.2019 stating the said notices are barred by limitation under Section 33 of

the Act since the assessment has been completed after five years and prayed to

withdraw the notices issued in reference to Assessment year 2013-14.

(B) Reply dated 15.03.2019 has been submitted to notice dated

12.03.2019 stating that Tripura VAT Act, Rules do not apply for the reasons stated

in the reply and prayed for withdrawal of the said notice.

Page 8 of 20

(C) Reply dated 25.03.2019 has been submitted to notice dated

16.03.2019 explaining the facts and also pointing out the discrepancies.

The respondent No5 without considering the reply of the petitioner

has drawn an adverse inference against the petitioner and has invoked power

under Section 31(5), 25(1)(c) Rule 20 and levied taxes, interest & penalty. The

assessment order dated 30.03.2019 issued by the respondent No.5 are also under

challenge along with the notification dated 04.06.2018 stated supra. The main

point which falls for consideration is this lis is the point of jurisdiction. That the

respondent No.3 cannot delegate the powers upon respondent No.5 and the action

taken by respondent No.5 is not in consonance with the Act & Rules.

[7] Hence, this writ petition.

[8] The Counter affidavit and written argument have been filed on behalf

of the respondents wherein contending that no fundamental right of the petition

has been violated, writ is not maintainable as no cause of action is made out, the

impugned orders are appealable under Section 69 of the Act before Appellate

Authority and a revision under Section 72 before High Court. Further, contended

that respondent No.3 is having power under Section 85 to delegate to persons

appointed under Section 18(1) of the Act. The audit wing is delinked with tax

collection wing as per proviso to Section 28(1). Thus, the orders of imposition of

interest, penalty, determining tax demand are as per Law.

[9] Heard both sides.

[10] Learned senior counsel for the petitioner Mr. A.K. Saraf, filed written

argument and apart from other submissions contended mainly on the point of

jurisdiction and the delegation of power by respondent No.3 to respondent No.5 is

contrary to law and the respondent No.5 being an authority to audit cannot act as

an assessing authority and also as collection authority. The imposition of penalty &

interest is also without any authority.

Page 9 of 20

[11] Mr. Saraf, learned senior counsel in support of his contention has

relied upon a judgment passed by the apex court in State of Kerala vs. K.M.

Cheria Abdulla & Company reported in (1965) 1 SCR 601 where the apex court

while explaining scope of revisional power indicated the limitation within such

power can be exercise by holding as under:

“It would not invest the revising authority with power to

launch upon enquiries at large so as either to trench upon the

powers which are expressl y reserved by the Act or by the

Rules to other authorities or to ignore the limitations inherent

in the exercise of those powers. For instance, the power to

reassess escaped turnover is primarily vested by Rule 17 in

the assessing officer and is to be exer cised subject to certain

limitations, and the revising authority will not be competent

to make an enquiry for assessing a taxpayer. Similarly, the

power to make a best judgment assessment is vested by

Section 9(2)(b) in the assessing authority and has to b e

exercised in the manner provided. It would not be open to

revising authority to assume that power.

[12] Reliance has also been place on another judgment in Commissioner

of Income Tax, Mumbai Vs. Amitabh Bachchan reported in (2016) 11 SCC 748

while examining contours of suo motu revisional power under Section 263 of the

Income Tax Act, 1961 held as under:

“9. Under the Act different shades of power have been

conferred on different authorities to deal with orders of

assessment passed by the primary author ity. While Section

147 confers power on the assessing authority itself to proceed

against income escaping assessment, Section 154 of the Act

empowers such authority to correct a mistake apparent on the

face of the record. The power of appeal and revision i n

contained in chapter XX of the Act which includes Section 263

that confers suo motu power of revision on the learned CIT.

The different shades of power conferred on different

authorities under the Act has to be exercised within the areas

specifically delineated by the Act and the exercise of power

under one provision cannot trench upon the powers available

under another provision of the Act…….”

[13] In another judgment by apex court in The Barium Chemicals Limited

vs. The Company Law Board , reported in AIR 1967 SC 295 held as under:

Delegatus Non Potest Delegare means that a delegate

has no power to delegate. The said maxim indicates a rule of

construction of a statute or other instrument conferring an

authority. Ordinarily, a discretion conferred by a statute on

instrument conferring an authority. Ordinarily, a discretion

conferred by a statute on any authority in intended to be

exercised by that authority, and by no other. But the intention

Page 10 of 20

may be negative by any contrary indication in the language,

scope or object of the Statute.

[14] In Mohd Naved vs. State of Uttarakhand & Ors reported in 2020 SCC

Online Utt 236 with regard to power of delegation in paragraph 38 held as under:

38. In practice government demands a great deal of delegation. This

has to be authorized by statute, either expressly or impliedly.

Statutory delegation of powers must be construed in the same way

as other powers, and will not therefore extend to sub -delegation in

the absence of some express or implied provision to that effe ct. The

delegate, must also keep within the bounds of the power actually

delegated, which may be narrowed than the possessed by the

delegating authority.

[15] Mr. S. S. Dey, learned Advocate General appearing for the

respondents contended that the notifications issued are well within the powers

conferred upon respondent No.3 and the delegation of powers upon respondent

No.5 are not in violation of Act & Rules. The impugned notices issued are in

accordance with law. The petitioners ought to have preferred appeal under Section

69 of the Act. He further argued that the delegation of power is done under

Section 85 of TVAT Act, whereby he may delegate his power to any person

appointed under Section 18(1) of the same Act. By exercising this power the

Commissioner by a notification dated 04.06.2018 delegated his powers under

Section 31 to the Superintendent of Taxes Audit Cell and they were given the

territorial jurisdiction in the whole State of Tripura. There is nothing illegal. Mr.

Dey, learned Advocate General further argued that the instant writ petition is not

maintainable and prayed to dismiss the same.

[16] Mr. S. S. Dey, learned Advocate General has relied on a decision of

Delhi High Court in H.G. International versus The Commissioner of Trade and

Taxes, Delhi (Order dated 16.08.2017) where that court had the occasion to

observe as follows:

15. Mr. Taneja then referred to the decisions in

Tata Sponge Iron Ltd. vs Commissioner of Sales Tax, Orissa

[2012] 49 VST 33 (Ori) and ABB India Limited vs State o f

Odisha [2015] 77 VST 124 (Ori) wherein it was held that the

officer who prepares the audit report cannot himself pass an

assessment order based on such audit report. The said

Page 11 of 20

decisions are distinguishable in their application to the

present case since th e corresponding provisions under the

Orissa Value Added Tax, 2004 („OVAT ACT‟) is Section 41(4)

which does not envisage the same officer who conducts the

audit also making the consequent assessment. The said

provision reads as under:

41(4) After completio n of tax audit of any dealer under sub -

section (3), the officer authorised to conduct such audit shall,

within seven days from the date of completion of the audit,

submit the audit report, to be called “Audit Visit Report” to

the assessing authority in the prescribed form along with the

statements recorded and documents obtained evidencing

suppression of purchases or sales, or both, erroneous claims

of deductions including input tax credit and evasion of tax, if

any, relevant for the purpose of investigatio n, assessment or

such other purposes.

16. Thus, under the OVAT Act the officer undertaking the audit

has to forward the report to the assessing officer who then, in

terms of Section 42 of the OVAT Act, makes an „audit

assessment. The position under Sectio n 58 of the DVAT Act is

very different.”

[17] Reliance has also been placed on another judgment of the apex court

in Kerala Trade Links, Adichira vs. Commercial Tax Officer and Ors (order passed

on 05.02.2009) where the apex court has observed that the contention of counsel

for the appellant that the Audit officer’s main function is to make audit assessment

under Section 24 is certainly correct. However, while scrutinizing the accounts or

other materials, if he notices that assessment under Section 24 is barred by

limitation and if the assessment is otherwise tenable under Section 25, then

certainly he is entitled to invoke section 25 and make assessment as an Assessing

officer, if he is authorized by Commissioner under Section 2(v) of the Act. Since in

this case the first respondent is authorized by the Commissioner to function as an

Assessing Officer, he is entitled to make a turnover escaping assessment under

Section 25 as above. The very purpose of conferring concurrent jurisdiction on

different officers is to ensure collection of tax, if the regular officer falls in it. We

therefore find that the order passed by the first respondent is within his powers

and so much so, order cannot be challenged on the ground of want of jurisdiction.

The Writ Appeal is therefore, dismissed.

Page 12 of 20

[18] To appreciate the contentions of both sides mainly on the point of

jurisdiction it is necessary to examine certain provisions under the Tripura VAT

ACT & Rules.

Definitions:

Assessee : means a person by whom any tax or any o ther sum of

money is payable under this Act, and includes -

(a) every person in respect of whom any proceeding under this Act

has been taken for the assessment of his income or of the income of

any other person in respect of which he is assessable, or of th e loss

sustained by him or by such other person or of the amount of refund

due to him or to such other person.

(b) every person who is deemed to be an assessee under any

provision of this Act:

(c) every person who is deemed to be an assessee in default und er

any provision of this Act

Assessing authority: means any person appointed by the State

Government or the Commissioner to perform all or any of the

functions of the assessing authority under this Act.

Audit: An official examination of accounts with ve rification by

reference to witness and vouchers.

Collection: The term „Collection‟ means only recovery of tax

already assessed and levied and in respect of which liability to pay

has arisen.

Demand: The action of demanding to ask for with legal right or

authority to ask; for peremptorily, imperiously or urgently.

Commissioner: Commissioner means any person appointed by the

State Government to be a commissioner of Taxes.

Gazette: Gazette generally means the official Gazette, published

under the authority of the Government.

Official Gazette: The words OFFICIAL GAZETTE refer to the

official Gazette of the State which enunciates the scheme and not to

the Central Govt. Gazette.

NOTIFICATION : means a notification published by authority of

the local Government in the official Gazette, Pun. Act XVII of 1887

(Land Revenue), S.3, Cl. 15.

Superintendent of Taxes : Superintendent of Taxes means (in

respect of dealer a Superintendent of Taxes referred to in Rule 8 or)

any person appointed as such by the State Government under

Section 18 and within whose jurisdiction the dealer‟s place of

business is situated or if the dealer has more than one such place,

the Superintendent within whose jurisdiction the general branch or

Head office in Tripura of such business is situated, or if the dealer

has no place of business within the State of Tripura, the

Superintendent who has been so notified by the Commissioner under

Rule. 8.

Page 13 of 20

Section 18. (1) The State Government may, for carrying out

the purposes of this Act, appoint a Commissioner of Taxes,

and such other persons to assist him as it thinks fit.

(2) Persons appointed under sub -section (1) shall exercise

such powers as may be conferred, and perform such duties as

may be required, by or under this Act.

(3) The State Government may, instead of appointing any

person under sub -section (1), invest, by notification, any

officer to exercise any power under this Act and also specify

therein the area, in which, power is to be exercised and

thereupon such officer or officers shall be deemed to have

been appointed under sub -section (1).

Section 25. Return defaults:- (1) If a dealer required to file

return under sub-section (1) or sub-section (2) of section 24 -

(a) fails without sufficient cause to pay the amount of tax due

as per the return for any tax period ; or

(b) furnishes a revised return under sub -section (3) of section

24 showing a higher amount of tax to be due than was

shown by him in the original return; or

(c) fails to furnish return; such dealer shall be liable to pay

interest in respect of-

(i) the tax payable by him according to the return, or

(ii) the difference of the amount of tax according to the

revised return; or

(iii) the tax payable for the period for which he has failed

to furnish return; at the rate of one and half percent

per month from the date the tax payable had become

due to the date of its payment or to the date of order

of assessment, whichever is earlier.

Section 25 (4)…

(d) having paid the tax payable according to a return in time,

fails to furnish along with the return proof of payment made

in accordance with sub -section (4) of section 24 ; the

Commissioner may, after giving the dealer reasonable

opportunity of being heard, direct him to pay in addition to

any tax, interest and penalty under sub-section (3) payable or

paid by him, a penalty of a sum of rupees one hundred per

day of default subject to a maximum of rupees ten thousand.

Section 27. Scrutiny of returns :- (1) Each and every return in

relation to any tax period furnished by a registered dealer to whom

notice has been issued by the Commissioner under section 24 shall

be subject to scrutiny by the Assessing Authority to verify the

correctness of calculation, application of correct rate of tax and

interest and input tax credit claimed therein; and full payment of tax

and interest payable by the dealer during such period.

(2) If any mistake is detected as a result of such scrutiny made as

per the provisions of sub -section (1), the Commissioner of Taxes

shall serve a notice in the prescribed form on the dealer to make

payment of the extra amount of tax along with the interest as per

the provisions of this Act, if it is payable, by a date specified in the

said notice.

Section 28. Tax audit:- (1) The Commissioner or any other tax

officer as directed by him shall undertake tax audit of the records,

stock in trade and the related documents of the dealer who are

Page 14 of 20

selected by the Commissioner in the manner as may be prescribed

for the purpose.

Provided that the audit wing shall be delinked from tax collection

wing as may be prescribed.

(2) The tax audit shall be generally taken up in the office, business

premises or warehouse of the dealer.

(3) For the purpose of tax audit under sub -section (1) the

Commissioner or any other tax officer di rected by him shall examine

the correctness of return or returns filed and admissibility of various

claims including input tax credit.

Section 29. Self assessment :- (1)…

(2) Not with standing anything contained in this section, if a

registered dealer has failed to furnish return or returns under sub -

section (1) of section 25 in respect of any tax period or periods, the

Commissioner shall proceed to make provisional assessment under

section 30.

Section 30. Provisional assessment: - (1) Where a registered

dealer fails to furnish the return in respect of any tax period within

the prescribed time, the Commissioner shall, not withstanding

anything contained in section proceed to assess the dealer

provisionally for the period of such default.

(2) The provisional assessment under sub -section (1) shall be made

on the basis of past returns, or past records, where no such returns

are available, on the basis of information received by the

Commissioner and the Commissioner shall direct the dealer to pay

the amount of tax assessed in such manner and by such date as may

be prescribed.

(3) If the dealer furnishes return along with evidence showing full

payment of tax, interest and penalty, if any, on or before the date of

payment specified under sub -section (2), the provisional assessment

made under sub -section (l) shall stand revoked to the extent of the

tax demanded, interest levied and penalty imposed, on the date on

which such return is filed by the dealer.

(4) Nothing contained in this section shall prevent the Com missioner

from making assessment under section 31 and any tax, interest or

penalty paid against provisional assessment shall be adjusted

against tax, interest and penalty payable on final assessment under

that section.

Section 31. Audit assessment:- (1) Where

(a) a registered dealer has failed to furnish any return under sub -

section (1) of section 25 in respect of any period; or

(b) a registered dealer is selected for audit assessment by the

Commissioner on the basis of any criteria or on random basis;

or

(c) the Commissioner is not satisfied with the correctness of any

return filed under section 24, or bonafides of any claim of

exemption, deduction, concession, input tax credit or

genuineness of any declaration, evidence furnished by a

registered dealer in support thereof; or

(d) the Commissioner has reasons to believe that detailed scrutiny

of the case is necessary, the Commissioner may,

notwithstanding the fact that the dealer may already have

been provisionally assessed under section 30, serve on such

dealer in the prescribed manner a notice requiring him to

appear on a date and place specified therein, which may be in

the business premises or at a place specified in the notice, to

either attend andproduce or cause to be produced the books

Page 15 of 20

of account and all evidence on which the dealer relies in

support of his returns including tax invoice, if any, or to

produce such evidence as specified in the notice.

(2) The dealer shall provide all cooperation and assistance to the

Commissioner to conduct the procee dings under this section

at his business premises.

(3) If proceedings under this section are to be conducted at the

business premises of the dealer and it is found that the dealer

or his authorized representative is not available or not

functioning from s uch premises, the Commissioner shall

assess to the best of his judgement the amount of tax due

from him.

(4) If the Commissioner, after considering all the evidences

produced in course of the proceedings or collected by him, is

satisfied that any dealer –

(a) has not furnished return in respect of any period by the

prescribed date; or

(b) has furnished incomplete and incorrect return for any

period; or

(c) has failed to comply with any notice under sub -section (1)

or sub-section (3); or

(d) has failed to maintain accounts in accordance with the

provisions of this Act or has not regularly followed any

method of accounting; the Commissioner shall assess to

the best of his judgement the amount of tax due from

such dealer.

(5) If the Commissioner is s atisfied that the dealer, in order to

evade or avoid payment of tax –

(a) has failed to furnish without reasonable cause, returns in

respect of any period by the prescribed date; or

(b) has furnished incomplete and incorrect returns for any

period;or

(c) has availed himself of tax credit to which he is not entitled

to ;

Or

(d) has followed such method of accounting which does not

enable the Commissioner to assess the tax due from

him, he shall, after giving the dealer reasonable

opportunity of being heard, direct him to pay, in addition

to tax and interest payable byhim, a penalty not

exceeding one and half times of the tax due but which

shall not be less than 10% of that amount.

Section 32. Assessment of dealer who fails to get

himself registered : (1) If the Commissioner, upon information

which has come into his possession, is satisfied that any dealer who

has been liable to pay tax under this Act, in respect of any period,

has failed to get himself registered, the Commissioner shall proceed

in such manner as may be prescribed to assess to the best of his

judgement the amount of tax due from the dealer in respect of such

period and all subsequent periods and in making such assessment

shall give the dealer reasonable opportunity of being heard.

Page 16 of 20

(2) The Commissioner may, if he is satisfied that the default was

without reasonable cause, direct that the dealer shall pay, in addition

to the amount of tax so assessed, such amount as interest and

penalty as prescribed in section 25.

Section 37. Payment and Recovery of Tax, Penalty and

Interest: (1) Tax shall be paid in the manner herein provided and

at such intervals as may be prescribed.

(2) A registered dealer furnishing returns under sub -section (1) of

section 24 shall pay into Government treasury, in such manner

and at such interval as may be prescribed, the amount of tax

due from him for the period covered under the return along

with the amount of penalty or interest or both payable by him

under section 24 and shall furnish a receipt from the Treasury

showing the payment of such amount.

(3) A registered dealer furnishing a revised return in accordance

with the sub-section (3) of section 24, which shows that a

greater amount of tax is due than was paid or payable in

accordance with the original return, shall furnish along with

the return a receipt showing payment of the differential

amount in the manner provided in sub -section (2).

(4) (a) The amount of tax -

(i) due where returns have been filed without full payment of

tax due;

or

(ii) assessed under section 29, section 30 and section 31 less

the sum already paid in respect of such period together

with interest, if any, required to be paid and the penalty,

if any, imposed to be paid under sub -section (5) of

section 31 or subsection (2) of section 32.

(b) the amount of penalty imposed under any provision of this

Act not covered under sub -chause ii) of clause (a); or (c)

any other dues under this Act.

shall be paid by the dealer into Government Treasury by

such date as specified in the demand n otice.

(5) Where a dealer fails to make payment of the tax assessed or

interest levied or penalty imposed on him or any other amount

due from him under this Act within thirty days of the date of

service of the notice of demand, the Commissioner may, after

giving the dealer reasonable opportunity of being heard, direct

that such dealer shall, in addition to the amount due pay, by

way of penalty, a sum equal to 2% of such amount of tax,

penalty, interest or any other amount due, for every month,

for the period for which payment has been delayed by him

after the date on which such amount was due to be paid.

(6) The amount that remains unpaid after the due date of payment

in pursuance of the notice issued under sub -section (4) and

sub-section (5) shall be rec overable as arrears of land

revenue, or in accordance with the provisions contained in

section 38.

(7) Where in pursuance of sub -section (6), any proceeding for the

recovery as an arrears of land revenue of any tax, penalty,

interest or part thereof or a ny other amount remaining

unpaid, have been commenced and the amount of tax,

penalty, interest or any other amount is subsequently

enhanced or reduced as a result of any assessment made or

order passed in the appeal, revision or rectification under this

Act, the Commissioner may, in such manner and within such

period as may be prescribed, inform the dealer and the

authority by whom or under whose order the recovery is to be

made and thereupon such proceeding may be continued as if

the amount of tax, penalty , interest or any other amount as

modified, enhanced or reduced, had been substituted for the

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tax, penalty, interest or any other amount which was to be

covered under sub-section (6).

Section 85. Delegation of Powers - The Commissioner may,

subject to such restrictions and conditions as may be prescribed,

delegate, by notification in the Official Gazette, any of his powers

under this Act to any person appointed under sub -section (1) of

section 18 to assist him.

Rule 8. (1) There shall be the following aut horities to

assist the Commissioner :-

(i) Additional Commissioner of Taxes,

(ii) Joint Commissioner of Taxes,(iii) Deputy Commissioner of

Taxes,

(iv) Assisstant Commissioner of Taxes.

(v) Superintendent of Taxes,

(vi) Inspector of Taxes.

(vii) Any other person appointed as such by the State Government.

(2) Subject to the provisions of the Act and the Rules made there

under, the Commissioner, may, by notification in the official

Gazettee, delegate the powers to be exercised by above

classes of officers and shall specify the area of the person in

respect of which powers are to be exercised by each of the

above class of officers.

Provided that the power of revision conferred upon the

Commissioner under Section 70 of the Act shall not be

delegated.

Amendment in proviso to sub -rule (2) of Rule 8:

The existing proviso to sub -rule (2) of Rule 8 of the Tripura

Value Added Tax Rules, 2005 shall be substituted by the

following proviso:

“Provided that the power of revision conferred upon him

under sub-section (2) of Section 70 of the Act, the

Commissioner, may, by notification in the Official Gazette, and

with the approval of Secretary, in -charge of Finance

Department in the Government delegate the power to be

exercised by any officer not below the rank of Joint

Commissioner of Taxes with certain terms, and he may alter

or withdraw such power delegated to any such officer(s), as it

seems fit, from time to time.”

Rule 27: Notice of Demand: The notice of demand shall be in

Form-XV.

Rule 45. Selection of dealers for audit :-

(1) The Commissioner shall, under sub -section (I) of Section 28, of

the Tripura Value Added Tax Act, 2004 select the dealers for

audit.

(4) Audit of selected dealers :

(i) For the purpose of audit, an audit team may consist of the

following persons:

(a) Superintendent of Taxes and Inspector of Taxes with the

Superintendent of Taxes as its head;

(b) Asstt. Commissioner of Taxes, Superintendent of Taxes

and Inspector of Taxes with Asstt. Commissioner of

Taxes as its head;

Page 18 of 20

(c) Deputy Commissioner of Taxes, Asstt. Commissioner of

Taxes, Superintendent of Taxes and Inspector of Taxes

with Deputy Commissioner of Taxes as its head;

Provided that the members of the Audit team shall not

be entrusted with the responsibility of collection of

taxes.

Provided further that the State Government may

authorise any other Government Department,

Organisation or undertaking to perform the functions of

an Audit team.

(ii) The Audit report drawn by an audit team : -

(a) headed by Superintendent of Taxe s shall be scrutinized by

the Asstt. Commissioner of Taxes;

(b) headed by an Asstt. Commissioner of Taxes shall be

scrutinized by a Deputy Commissioner of Taxes;

(c) headed by a Deputy Commissioner of Taxes, shall be

scrutinize by an Addl. Commissioner o f Taxes;

(5) (i) Person or persons who are selected by the Commissioner

of Taxes in the manner prescribed in clause (i) of sub -

rule (4) shall audit the records and examine the

correctness of return or returns generally and

admissibility of various claims, including input tax credit.

(iii) The result of audit shall be communicated by the auditing

authority to the assessing authority.

Rule 57. DELEGATION AND EXERCISE OF POWER:

The powers to call for returns, to make assessment, to cancel or

rectify them, to impose penalty and to order maintenance of

accounts shall not be delegated to any officer below the rank of

Superintendent of Taxes.

Rule 58. The officers to whom powers may be delegated under

section 85 shall exercise the powers subject to the pr ovisions of the

Act and the Rules thereunder and to such restrictions as may be

imposed by the Commissioner in delegating the powers.

[19] The notification dated 01.04.2006 and in continuation another

notification dated 04.06.2018 both have been issued by the third respondent

under Section 85 of the Act. A fair reading of Section 85 of the Act specifically

indicates the commissioner may subject to the such restriction and conditions as

may be prescribed, delegate, by notification in the official gazette, any of his

powers under this act to any person appointed under sub-section (1) of Section 18

to assist him has not been complied with in its true letter and spirit.

[20] The respondents have not placed any official gazette to show that the

said notifications have been gazatted as contemplated under Section 85 of the

Page 19 of 20

Act. The counter affidavit is also silent about such Gazette Notification. In the

absence of which, this court has no hesitation to draw an inference that the

requirement under Section 85 has not been complied with. Hence, the notification

under challenge is invalid.

[21] A fair understanding in taxation law as (a) audit (b) assessment (c)

demand/recovery/collection are three different stages and are dealt by different

and competent authorities under the statute. Originally under notification dated

01.04.2006, certain powers have been delegated in favour of Superintendent of

Taxes. But in notification dated 04.06.2018, the powers under Section 63 are

delegated to all Superintendent of Taxes posted in Tax Audit Cell. This power is

enhancing the action of the authority in audit cell also as an authority under

assessment and an authority for demand and collection of Taxes including

imposition of Interest & penalty. It is pertinent to mention that Section 28 has not

been delegated.

[22] The entire action involving the 5

th

respondent-authority for issuing

the impugned notices imposing the penalty and collecting of interest are the one

without jurisdiction. Under Rule 41, the audit authority shall only communicate

their finding to the assessing authority. A reading of Section 28 and Rule 45

clearly indicates that role of the audit & assessment authorities under the Act are

different. The powers of assessment under the statute are not vested on the au dit

cell. And in the absence of such, commissioner cannot delegate. The powers of

commissioner under section 31 has been delegated to the Superintendent of

Taxes by notification dated 01.04.2006 and also the Superintendent of Taxes

posted in tax audit cell by notification dated 04.06.2018.

[23] It is pertinent to note that the powers delegated under notification

dated 01.04.2006 upon the Superintendent of Taxes and powers delegated by

notification dated 04.06.2018 upon all the Superintendent of Taxes posted in Tax

Audit Cell are altogether different. As stated (supra) audit, assessment &

Page 20 of 20

collection are three different functions. Collection of penalty under Section 31

(5)(d) unless it is audited and assessment is made, it cannot be construed that

the Assessee is liable to pay penalty and as well as interest upon the tax amount.

[24] In view of the above, this court is of the opinion that the notification

dated 04.06.2018 is in consonance under Section 85 of the Act and also the

Superintendent of Taxes posted in Tax Audit Cell can only act as the Audit

Authority and not as Assessing Authority or Collection Authority.

[25] In view of the above discussion, the impugned notices be treated as

audit reports only and the Audit authority shall forward it to the Assessing

authority for taking action in accordance with law.

[26] The order passed in this writ petition is confined to this writ petition

only and same cannot be treated as judgment in rem and will not have any

retrospective effect enabling other Assessees to rely on this order.

[27] With the above observation this writ petition is accordingly disposed

of.

JUDGE JUDGE

Dipak