ULTRATECH CEMENT LIMITED V. JOINT COMMISSIONER COMMERCIAL TAXES

SCA/7844/2016

AI Insights

The case involves two Special Civil Applications (SCA) filed by M.H. Khanusiya and Ultratech Cement Limited against the State of Gujarat concerning the imposition of entry tax under the Gujarat Tax on Entry of Specified Goods into Local Areas Act, 2001. The petitioners challenged the demand and assessment notices issued for entry tax on hydraulic excavators, arguing that the goods were not 'specified goods' under the Act and that the notices were barred by limitation. The court examined the legal provisions of the Entry Tax Act and the associated rules, particularly focusing on the requirements for filing returns and the implications of not filing such returns on the limitation period for assessment. The court found that the notices were issued in accordance with the law but noted procedural lapses in the assessment process, leading to the quashing of the assessment order in one of the applications.

• Counselvise Citation: [2018] 140 COUNSELVISE.COM (IT) 726635 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 15-06-2018
• Assessment Year: misc
• Other Referred Cases: Standard Chartered Finance Ltd. v. Commissioner of Income Tax, Bangalore, Brooke Bond India Ltd. v. State of Gujarat, State of Gujarat v/s Yantraman Automac Pvt. Ltd, Tractors and Farm Equipment Ltd v. State of Gujarat, Jindal Stainless Ltd. v/s State of Haryana, Classic Auto mobiles vs. State of Gujarat, A. Kunhikoya Thangal vs. State of Kerala and ors, M. Pentiah and ors vs. Muddalal Veeramallappa
• Laws Referred To: Entry Tax Act, VAT Act, Constitution of India
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: HARDIK VORA
• Assessee Lawyers: UCHIT SHETH; S N SOPARKAR
• Keywords: Assessment; Entry Tax; Limitation; Natural Justice; Specified Goods
• Section: 11; 10; 8; 17; 226; 67; 70; 70A; 70A; 34(8)

Judgement Text

"C/SCA/5379/2016 CAV JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO. 5379 of 2016 With SPECIAL CIVIL APPLICATION NO. 7844 of 2016 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE M.R. SHAH sd/­ and HONOURABLE MR.JUSTICE B.N. KARIA sd/­ ========================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? No 2 To be referred to the Reporter or not ? No 3 Whether their Lordships wish to see the fair copy of the judgment ? No 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ? No ============================================= M H KHANUSIYA....Petitioner(s) Versus STATE OF GUJARAT & 1....Respondent(s) ============================================= Appearance: MR UCHIT N SHETH, ADVOCATE for the Petitioner(s) No. 1 MR. HARDIK VORA AGP for the Respondent(s) No. 1 NOTICE SERVED BY DS for the Respondent(s) No. 1 – 2 Special Civil Application No.7844 of 2016 MR. S.N. SOPARKAR, Senior Advocate for Singhi & Co. for the petitioner MR. HARDIK VORA AGP for the Respondent(s) No. 1 ============================================= CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE B.N. KARIA Date : 15/06/2018 CAV JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1.0. By way of this petition being Special Civil Application No.5379 of 2016 under Article 226 of the Constitution of India, the petitioner has prayed for appropriate writ, direction and order Page 1 of 39 C/SCA/5379/2016 CAV JUDGMENT quashing and setting aside the impugned demand notice dated 20.02.2016. The petitioner has also prayed for an appropriate writ, direction and order to quash and set aside the impugned assessment order dated 13.06.2016. 1.1. The petitioner has also prayed for appropriate writ, direction and order permanently restraining the respondent from recovering the entry tax or penalty under the Entry Tax Act on purchase of Hydraulic Excavator made on 29.09.2016. 2.0. So far as Special Civil Application No.7844 of 2016 is concerned, the petitioner has also prayed to quash and set aside the impugned notices for payment of tax issued in Form ­3 dated 13.04.2016 passed by the respondent no.2 herein. The petitioner has also prayed to quash and set aside the impugned notices for assessment issued in Form ­2 dated 13.04.2016 by the respondent no.2. The petitioner has also prayed to quash and set aside the impugned notices for demand dated 13.04.2016 issued by the respondent no.3 to the petitioner. Special Civil Application No.5379 of 2016 3.0. The facts leading to the present Special Civil Application No.5379 of 2016 in nutshell are as under: 3.1. That the petitioner is a proprietorship firm and works a contractor engaged in road construction. That the petitioner is registered under VAT Act. That on 29.09.2006 the petitioner purchased a hydraulic excavator for use in execution for works contract. According to the petitioner, the purchase was duly recorded in the books of accounts. According to the petitioner, Page 2 of 39 C/SCA/5379/2016 CAV JUDGMENT hydraulic excavator is a machine mounted on chains and not on rubber tyres. Therefore, according to the petitioner, the petitioner believed that such machine was not “specified goods” for the purpose of entry tax and hence it did not pay entry tax at the relevant time on such machine. That after a period of approximately 12 years, in the year 2016, the petitioner received one inquiry from the respondent authorities as to whether entry tax was paid on the hydraulic excavator which was purchased on 29.09.2006. That by written submission dated 25.1.2016, the petitioner submitted that hydraulic excavator was a machine used in execution of works contract and hence it was not “specified goods”, no entry tax has been paid on such purchase. It was also contended that assessment of entry tax in respect of such purchase was time barred by now. That the respondent authority issued notice dated 30.01.2016 issued in Form 401 asking the petitioner to submit challan showing payment of entry tax. That vide notice dated 1.2.2016 Commercial Tax Officer issued notice proposing to impose entry tax. The notice to impose entry tax was issued under Section 34(8) of the VAT Act. That the petitioner submitted the reply to the notice on 5.2.2016 wherein again it was contended that hydraulic excavator was not “specified goods” and also that assessment of entry tax for goods purchased on 29.09.2006 was time barred. It is the case on behalf of the petitioner that thereafter without passing any assessment order, the respondent authorities have issued the impugned demand notice to the petitioner on 20.02.2016 asking the petitioner to deposit entry tax on the purchase made on 29.09.2006 along with penal interest and penalty. Vide communication dated 24.02.2016 the petitioner Page 3 of 39 C/SCA/5379/2016 CAV JUDGMENT requested respondent authority to reconsider its decision. However, nothing further was done and the respondent authorities continue to demand the entry tax on the purchase of hydraulic excavator purchased in the year 2006. Hence, the petitioner has preferred present Special Civil Application under Article 226 of the Constitution of India. Special Civil Application No. 7844 of 2016 4.0. The facts leading to the present Special Civil Application No.7844 of 2016 in nutshell are as under: 4.1. That the petitioner Ultratech Cement Limited purchased the following equipment from the respective vendors. Equipment Invoice Received Date Amount (in Rs.) Tata – Hitachi Hydraulic excavator model ZX450H with Loading Shovel Invoice No. 27462419 dated 30.03.2012 23.04.2012 1,20,33,756/­ Tata – Hitachi Hydraulic excavator model ZX450H with Loading Shovel Invoice No. 27462291 dated 29.02.2012 02.04.2012 1,18,13,130/­ Hydraulic Excavator L&T 300D Invoice No. 911402203 dated 30.09.2014 27.11.2014 1,42,88,262/­ 4.2. That on 06.04.2016, pursuant to instructions received from the Respondent No. 1­ Joint Commissioner of Tax, the Respondent Page 4 of 39 C/SCA/5379/2016 CAV JUDGMENT No. 3­ Commercial Tax Officer, Amreli conducted a search/survey at the premises of the Petitioner under the provisions of the Gujarat Value Added Tax Act, 2003 and the rules framed thereunder. That on the very same day i.e. on 06.04.2016, a notice in Form­401, under Section 67, 70 and 70A of the VAT Act, came to be issued to the Petitioner, seeking an explanation from the Petitioner qua the failure on payment of Entry Tax on the equipment purchased by the Petitioner, in 2011­12 and 2013­14. That on 12.04.2016, the representative of the Petitioner appeared before the Respondent No. 3, and inter alia submitted that the aforesaid equipment not being Motor Vehicles in terms of the Gujarat Tax on Entry of Specified Goods into Local Areas Act, 2001 (“Entry Tax Act”) was not amenable to Entry Tax and therefore there arose no liability on the Petitioner to make payment of Entry Tax on the equipment. Pursuant to the aforesaid, the Respondent No. 3, while issuing notice dated 13.04.2016 for assessment under Form­2 of the Gujarat Tax on Entry of Specified Goods into Local Areas Rules, 2001 (“Entry Tax Rules”) called upon the Petitioner to attend the hearing scheduled on 10.05.2016, and simultaneously also issued a notice dated 13.04.2016 for payment of Entry Tax and penalty under Form­3 of the Rules, calling upon the Petitioner to pay an amount of Rs. 51,38,946/­ towards the Entry Tax assessed for the years 2011­12 and 2013­14, along with penalty of an amount of Rs. 51,38,946/. That on 18.04.2016, the Petitioner received a notice dated 13.04.2016 from the Respondent No. 2, rejecting the contentions of the Petitioner submitted vide letter dated 12.04.2016, and further directed the Petitioner to deposit an amount of Rs. 79,72,386/­ (Entry Tax plus interest) within 10 days. Page 5 of 39 C/SCA/5379/2016 CAV JUDGMENT Hence, petitioner has preferred present Special Civil Application No.7844 of 2016 for the aforesaid relief. 5.0. Heard Shri Uchit Sheth, learned advocate for the petitioner of Special Civil Application No. 5379 of 2016 and Shri S.N. Soparkar, learned Senior Advocate for Singhi and Co, Advocate for the petitioner of Special Civil Application No.7844 of 2016 and Shri Hardik Vora, learned Assistant Government Pleader who has appeared on behalf of the respondent State. 6.0. Shri S.N. Soparkar, learned counsel for the petitioner of Special Civil Application No.7844 of 2016 has vehemently submitted that impugned assessment notice calling upon the petitioner to produce relevant data is coupled with the demand notice along with interest and penalty and therefore, same is nothing but an empty formality. It is further submitted that even the respondents have issued a notice for demand and has levied interest as well as penalty, even without carrying out any assessment, without affording any opportunity to the petitioner to make submissions. It is submitted that therefore, the initiation of proceedings by the respondents is itself erroneous and unlawful, and not in accordance with the provisions of the Entry Tax Act and the Entry Tax Rules. 6.1. It is further submitted by Shri S.N. Soparkar, learned counsel for the petitioner that in terms of the provisions of Section 8 of the Entry Tax Act, no order of assessment can be made after the expiry of three years from the last date prescribed for Page 6 of 39 C/SCA/5379/2016 CAV JUDGMENT furnishing of return­cum­challan of the particular period. It is submitted that further in view of Rule 6 of the Entry Tax, the return­cum­challan is required to be furnished to the concerned authority within a period of one month and fifteen days immediately succeeding the month for which return­cum­challan is required to be furnished. It is submitted that therefore, the respondents could have initiated the proceedings, if any, demanding Entry Tax from the Petitioner, under the provisions of the Entry Tax Act, latest by dates hereunder specified: Invoice Date Entry Date Period under Rule 6 Completion of 3 years 29.02.2012 02.04.2012 17.05.2012 17.05.2015 30.03.2012 23.04.2012 08.06.2012 08.06.2015 30.09.2014 27.11.2014 11.01.2015 11.01.2018 It is submitted that the impugned proceedings/ demand notices are clearly barred by limitation and therefore, liable to be quashed and set aside on this ground alone. 6.2. It is further submitted by Shri S.N. Soparkar, learned counsel for the petitioner that an assessment or reassessment under the Entry Tax Act can only be made based on a return­cum­challan filed by the assessee, which return­cum­challan is based on self­ assessment. It is submitted that in view thereof, if the assessee is of the opinion that the goods are not ‘Specified Goods’ for the purpose of the Entry Tax Act, and accordingly no return­cum­challan is filed, there can be no further assessment, reassessment, or levy of Page 7 of 39 C/SCA/5379/2016 CAV JUDGMENT penalty or interest. It is submitted that therefore, and the petitioner has not filed return­cum­challan under the Entry Tax Act as the goods are not ‘Specified Goods’, no assessment can be possible in absence of such return­cum­challan. In support of his above submission, he has relied upon the decision in the case of Standard Chartered Finance Ltd. v. Commissioner of Income Tax, Bangalore, reported in (2016) 381 ITR 453. It is further submitted by Shri S.N. Soparkar, learned counsel for the petitioner that the provisions of Section 10 of the Entry Tax Act cannot be said to be envisaging a situation wherein, even though a person is under a bonafide belief that the goods are not ‘Specified Goods’, is required to pay the Entry Tax. It is submitted that it is settled law that the liability to pay tax until filing of return would be in accordance with the assessee’s own assessment of his tax liability, and not on the basis of filing assessment, and that the assessee’s own assessment would include his bonafide claim to any deductions, exemption, or non­ taxability of any turnover of sales or purchases, which will be subject to determination by the assessing authority. It is submitted that thus, the obligation of the Petitioner to pay the Entry Tax until filing of the return­cum­challan would be entirely on the basis of self­assessment. In support of his above submission, he has relied upon the decision in the case of Brooke Bond India Ltd. v. State of Gujarat, 1998 SCC OnLine Guj : (1999) 113 STC 185. 6.3. It is further submitted by Shri S.N. Soparkar, learned counsel for the petitioner that it is settled law that fiscal statutes are to be interpreted strictly. It is submitted that further, an assessee cannot be compelled to pay tax even before an assessment is carried out in Page 8 of 39 C/SCA/5379/2016 CAV JUDGMENT respect of the assessee’s liability. It is further submitted by Shri Soparkar, learned counsel for the petitioner that Entry Tax Act does not provide a mechanism for a situation where the return­cum­ challan is not filed by an entity, more particularly as to how the authority can compel an entity to file such return­cum­challan after the expiry of the prescribed period. It is submitted that in absence of such a provision, the petitioner cannot be compelled to file the return­cum­challan at this stage, when the period prescribed under Rule 6 of the Entry Tax Rules has already lapsed. 6.4. It is further submitted by Shri S.N. Soparkar, learned counsel for the petitioner that the assessee under the provisions of section 11(1)(a)(iii) of the Gujarat Value Added Tax Act, 2003, is entitled to claim tax credit equal to the amount of tax paid under the Entry Tax Act. It is submitted that in view thereof, if the provisions of the Entry Tax Act were to be interpreted in a manner wherein the Respondent authorities are empowered to compel the Petitioner to file return­cum­challan under the Entry Tax Act after the expiry of the prescribed period under Rule 6 of the Entry Tax Rules, it would tantamount to depriving the petitioner of the opportunity of claiming such tax credit in respect of the VAT paid during the corresponding period. It is submitted that such interpretation would be very prejudicial and unjust to the petitioner and the same could not have been the intention of the legislature while drafting the provisions in question. It is submitted that therefore, even for the aforesaid reason, the authorities cannot compel or call upon the Petitioner to file the return­cum­challan at this stage. Page 9 of 39 C/SCA/5379/2016 CAV JUDGMENT 6.5. It is further submitted by Shri S.N. Soparkar, learned counsel for the petitioner that even otherwise in terms of the provisions of Section 17 of the Entry Tax Act, it is unambiguously clear that penalty can only be levied upon an assessee only after giving a reasonable opportunity of being heard. It is submitted that impugned notices, inasmuch as they have failed to adhere to the provisions of Section 17 of the Entry Tax Act, are illegal and unlawful and liable to be quashed. Making above submissions and relying upon the above decisions, it is requested to allow the present Special Civil Application No. 7844 of 2016. 7.0. Shri Uchit Sheth, learned advocate for the petitioner of Special Civil Application No. 5379 of 2016 has vehemently submitted that entry tax is leviable only on entry of specified goods. It is submitted that Section 3 of the Gujarat Tax on Entry of Specified Goods into Local Areas Act, 2001 (herein after referred to as “the Entry Tax Act”) which is the charging section imposes tax only on the entry of “specified goods”. It is submitted that the phrase “specified goods” has been defined under Section 2(k) of the Entry Tax Act to mean goods specified in column 2 of the Schedule and such other goods as notified by the State Government. It is submitted that thus, entry tax is leviable only on entry of specified goods. The rates of entry tax are also prescribed only for such specified goods. 7.1. It is further submitted by Shri Sheth, learned advocate for the petitioner that even returns are required to be filed only if a Page 10 of 39 C/SCA/5379/2016 CAV JUDGMENT person believes he is liable to pay entry tax. It is submitted that there is no provision requiring filing of Nil returns. It is submitted by Shri Sheth, learned advocate for the petitioner that Section 7 of the Entry Tax Act requires filing of returns by a person liable to pay tax under the Entry Tax Act. It is submitted that a person is liable to file returns under the Entry Tax Act only if he bonafidely believes that he has imported specified goods from outside the State. It is submitted that Rule 6 of the Entry Tax Rules requires furnishing of “return­cum­challan” in Form 1 by an importer to the assessing authority within whose jurisdiction the specified goods are brought for consumption, use or sale. It is submitted that even in the prescribed format i.e. Form 1, the description of the “specified goods” imported along with value, rate of tax, etc needs to be filled along with a statement that the tax amount as per such return has been deposited by the importer. It is submitted that even return­cum­challan needs to be filed only if a person believes that he has imported “specified goods” into the State of Gujarat. It is submitted that there is no provision requiring persons to file Nil returns in cases where non­specified goods are imported into the State of Gujarat. 7.2. It is further submitted by Shri Sheth, learned advocate for the petitioner that even there is no provision under the Entry Tax Act for assessment if return is not filed by an importer. It is submitted that there is no provision under the Entry Tax Act empowering the authorities to call upon a person to file return and pay entry tax in a case where such person has not filed return under the Entry Tax Act under a belief that the goods imported by Page 11 of 39 C/SCA/5379/2016 CAV JUDGMENT him were not specified goods leviable to tax. It is submitted that Section 8 of the Entry Tax Act allows assessment only in cases where return­cum­challan is filed by the importer. It is submitted that therefore, the demand of entry tax from the Petitioner in the absence of any machinery provision under the Entry Tax Act to assess a person who has not filed returns under the Entry Tax Act is without jurisdiction, bad and illegal. 7.3. In the alternatively, it is submitted by Shri Sheth, learned advocate for the petitioner that in any case initiation of assessment proceedings beyond the period of 3 years, is time­barred. It is further submitted by Shri Sheth, learned advocate for the petitioner that if it is held that assessment under Section 8 of the Entry Tax Act can be initiated even against persons such as Petitioner who have bonafidely not filed return under the Entry Tax Act, then in any case initiation of assessment proceedings in the case of the Petitioner is beyond the stipulated period of 3 years under Section 8(5) of the Entry Tax Act and therefore without jurisdiction, bad and illegal. 7.4. It is further submitted that the submission on behalf of the State Government that the time limit of 3 years is applicable only to persons who have filed return under the Entry Tax Act has no substance. It is submitted that only provisions for assessment under the Entry Tax Act are contained in Section 8(3) and 8(4) of the Entry Tax Act. It is submitted that it is categorically provided in Section 8(5) of the Entry Tax Act that no assessment order shall be passed under sub­sections (3) and (4) of the Entry Tax Act after Page 12 of 39 C/SCA/5379/2016 CAV JUDGMENT expiry of 3 years from the “last date prescribed for furnishing returns of the particular period”. It is submitted that thus if at all it is held that assessment under Section 8 of the Entry Tax Act can be initiated even for persons who have not filed return under the Entry Tax Act, then the time limit which is stipulated for assessment under Section 8 of the Entry Tax Act would also be applicable and therefore initiation of assessment proceedings is beyond a period of 3 years from the last date prescribed for furnishing of returns is time­barred, and therefore, without jurisdiction, bad and illegal. 7.5. It is further submitted by Shri Uchit Sheth, learned advocate for the petitioner that even there is no provision for filing nil return and hence time­barring of assessment cannot be restricted to persons who have filed returns. It is further submitted by Shri Sheth, learned advocate for the petitioner that there is no provision under the Entry Tax Act requiring or allowing filing of Nil return, in a case where a person imports goods which he bonafidely believes to be non­specified goods. It is submitted that therefore, as such a person who does not file return under the Entry Tax Act, under a bonafide belief that the goods brought into the State by him are not specified goods, then he does not commit breach of any provision under the Entry Tax Act so as to make the time limit of assessment under Section 8(5) of the Entry Tax Act inapplicable to him. 7.6. It is further submitted by Shri Uchit Sheth, learned advocate for the petitioner that the requirement of filing nil return Page 13 of 39 C/SCA/5379/2016 CAV JUDGMENT consciously absent in the statute since registered dealer would in any case be filing returns under the Vat Act. It is submitted that in fact the legislature has consciously refrained from requiring filing of Nil returns under the Entry Tax Act. It is submitted that because assessing authorities under the Entry Tax Act are appointed under Section 5 of the Entry Tax Act. It is submitted that as per the Notification dated 13.9.2001 issued under Section 5 of the Entry Tax Act, all the authorities of Sales Tax/Vat are appointed as assessing officers of the Entry Tax Act. It is submitted that phrase “Registered dealer” has been defined under Rule 2(c) of the Entry Tax rules to mean a dealer defined under clause (20) of section 2 of the VAT Act. It is submitted that thus a registered dealer under the Vat Act is ipso facto a registered dealer for the purpose of the Entry Tax Rules. It is submitted that Rule 6(2)(b) of the Entry Tax Rules requires a registered dealer to file return­cum­challan within a period of 22 days from the end of the month for which return is required to be furnished. It is submitted that such period is in pari materia with Rule 26 of the Gujarat Value Added Tax Rules, 2006 which requires payment of tax under the Vat Act within a period of 22 days from the end of the month. It is submitted that a registered dealer under the Vat Act is mandatorily required to file return under Section 29 of the Vat Act wherein he is required to show all purchases and sales made including purchases made from outside the State. It is submitted that since the entry turnover of purchases made from outside the State would be shown by a registered dealer in the returns filed under the Vat Act and the assessing authorities for the purpose of the Vat Act and the Entry Tax Act are common, the Entry Tax Rules require filing of returns only if the person Page 14 of 39 C/SCA/5379/2016 CAV JUDGMENT believes that he has imported specified goods. It is submitted that the requirement of filing nil return under the Entry Tax Act even though the entire turnover of purchases is shown in the returns furnished under the Vat Act would only be duplication, therefore the Entry Tax rules consciously require filing of returns only in cases where the person believes that entry tax is payable on the transaction. 7.7. It is submitted that in the present case the purchase of excavator by the Petitioner is recorded in his books of account. The petitioner is a registered dealer under the Vat Act. It is submitted that the petitioner has even been subjected to scrutiny assessment under the Vat Act and thus as such the assessing authority was aware about the entry of goods into the State of Gujarat. It is submitted that thus the time limit of 3 years stipulated under Section 8(5) of the Entry Tax Act would be applicable to the Petitioner and thus the assessment proceedings are time barred by limitation. It is further submitted by Shri Uchit Sheth, learned advocate for the petitioner that even statutory notice for assessment under Section 8 specifically contains the circumstance where person has not filed returns. It is submitted that statutory notice for assessment in Form 2 which is prescribed for the purpose of Section 8 of the Entry Tax Act by Rule 7(2) of the Entry Tax Rules specifically contains a circumstance where person has not filed returns and the officer wants to make assessment. It is submitted that thus, the legislature also believes that assessment of persons who has not filed returns under the Entry Tax Act is required to be made under Section 8 of the Entry Tax Act. It is Page 15 of 39 C/SCA/5379/2016 CAV JUDGMENT submitted that in fact in the case of the Petitioner the very notice for assessment in Form 2 was issued to the Petitioner. It is submitted that therefore, in light of such legal provisions and in view of such facts, it is not open for the learned Respondent authorities to contend that Section 8 of the Entry Tax Act is not applicable to assessment of persons who have not filed returns under the Entry Tax Act. It is submitted that if the assessment is under Section 8 of the Entry Tax Act then the time limit for such assessment stipulated under Section 8(5) of the Entry Tax Act would also be applicable and therefore, the assessment is time­ barred. 7.8. It is further submitted by Shri Sheth, learned advocate for the petitioner that Entry Tax Act and the Vat Act are intricately connected. It is submitted that Section 4(3) of the Entry Tax Act provides for reduction of liability under the Vat Act if entry tax is paid on import of specified goods. It is submitted that correspondingly Section 11(1)(c) of the Vat Act provides that a dealer would be entitled to input tax credit of the tax paid under the Entry Tax Act. It is submitted that therefore, determination of liability under the Entry Tax Act is necessary before determining liability under the Vat Act. It is submitted that therefore, if a person believes that he has not imported specified goods and therefore he does not pay entry tax and if subsequently in assessment he is found liable to entry tax then he would be entitled to credit of such entry tax in assessment under the Vat Act. It is submitted that therefore, it is imperative that the assessment under the Entry Tax Act precedes the assessment under the Vat Act. It is submitted that Page 16 of 39 C/SCA/5379/2016 CAV JUDGMENT therefore, it is for such reason that while the time limit for completion of assessment under Section 8(5) of the Entry Tax Act is stipulated to be 3 years, the time limit for initiation of scrutiny/audit assessment under the Vat Act is also stipulated to be 3 years under Proviso to Section 33(3) of the Vat Act. It is submitted that if the assessment under the Entry Tax is not completed prior to assessment under the Vat Act then this would lead to an anomalous situation in as much as while a dealer will be held liable to pay entry tax he would lose his right to be granted input tax credit under the Vat Act. It is submitted that such situation could never have been envisaged by the legislature particularly in case of a registered dealer under the Vat Act. It is submitted that therefore, the respondent cannot be allowed to initiate assessment under the Entry Tax Act after expiry of the statutory limitation period of 3 years. 7.9. It is further submitted by Shri Sheth, learned advocate for the petitioner that even otherwise impugned levy of entry tax at the rate of 15% under the Entry Tax Act by treating excavators as specified goods is bad in law and, contrary to the scheme and object and purpose of Entry Tax Act. It is submitted that excavators used in execution of works contract were classifiable as “Earthmoving Equipment” under Entry 98A of the Gujarat Sales Tax Act, 1969 for which the stipulated rate of tax was 8%. It is submitted that after introduction of the Vat Act w.e.f. 1.4.2006 the Excavators used in execution of works contract are covered under Entry 35 of the notification issued under Section 5(2) of the Vat Act at least till the entry was amended on 15.2.2010 and the stipulated Page 17 of 39 C/SCA/5379/2016 CAV JUDGMENT rate of tax for Entry 35 was 4% during the year in question i.e. 2006­07. It is submitted that aforesaid has been held by this Court in the case of State of Gujarat v/s Yantraman Automac Pvt. Ltd reported in 93 VST 423 (Guj). 7.10. It is further submitted by Shri Sheth, learned advocate for the petitioner that imposition of entry tax at the rate of 15% on excavators used in execution of works contracts by treating them to be “motor vehicles” even though the local rate of tax on such excavators was 4% during the year 2006­07 as held by this Court in the case of Yantraman Automac Pvt. Ltd. (supra) is contrary to the scheme and purpose of the Entry Tax Act, discriminatory and violative of Article 304(a) of the Constitution of India as held by this Court in the case of Tractors and Farm Equipment Ltd (supra). It is therefore submitted that the impugned order is required to be quashed and set aside even on merits of the case. Making above submissions and relying upon the recent decision of the 9 Judge Bench of the Hon'ble Supreme Court in the case of Jindal Stainless Ltd. v/s State of Haryana in Civil Appeal No. 3453 of 2002 decided on 11.11.2016, it is submitted that even on merits the impugned demand notice / order is required to be quashed and set aside. Making above submissions and relying upon the above decisions, it is requested to quash and set aside the impugned demand notice dated 20.2.2016 and impugned assessment order dated 13.6.2016 passed under the Entry Tax Act as time­barred as it is passed beyond the period of 3 years prescribed under section 8 of the Entry Tax Act and in any case after an inordinate delay of more than 9 years, without jurisdiction, bad and illegal and it is Page 18 of 39 C/SCA/5379/2016 CAV JUDGMENT also prayed to hold that levy of entry tax on excavators at the rate of 15% even though the local rate of tax under the Vat Act on excavators during the period in question was 4% is contrary to the object and purpose of the Entry Tax Act, discriminatory and violating Article 304(a) of the Constitution of India as held by this Hon. Court in the case of Tractors and Farm Equipment Ltd. (supra). 8.0. Both these petitions are vehemently opposed by Shri Hardik Vora, learned Assistant Government Pleader appearing on behalf of the respondent State Authority. 8.1. It is vehemently submitted by Shri Vora, learned Assistant Government Pleader that the impugned assessment / demand notices are absolutely in consonance with the scheme of the Entry Tax Act. It is further submitted by Shri Vora, learned AGP that in the present case it is admitted that assessee has not filed return as prescribed under Section 8 of the Entry Tax Act. It is further submitted that therefore, the assessee cannot take benefit of time limit prescribed in Section 8(5) of the Act as entire Section 8 is regarding assessment to be made and consequence after filing return. It is submitted that if the return is not filed, Section 8 would not be applicable. 8.2. It is further submitted that Entry Tax Officer would not get idea about entry of goods in the State except on the basis of return filed. It is submitted that in the case under consideration also on the basis of information, search/ survey was made and information regarding entry of vehicles was found out. It is submitted that Page 19 of 39 C/SCA/5379/2016 CAV JUDGMENT therefore, irrespective of the fact that whether the concerned importer who brings the goods within the State of Gujarat bona fide believes or not whether the goods imported are “specified goods” or not he has to file return as required under Section 8 of the Entry Tax Act. 8.3. It is submitted that on considering Section 3 and Section 10 of the Act, the liability of entry tax arise at the time of entry of the goods and it is the duty of every person who brings such goods into local area to pay tax. It is submitted that accordingly officers are entitled to issue demand notice. It is submitted that for issue of such demand notice, no time limit is specified in the Act. In support of his above submission, Shri Vora, learned AGP has heavily relied upon the decision of the Jharkhand High Court in the case of Classic Auto mobiles vs. State of Gujarat and the decision of the Kerala High Court in the case of A. Kunhikoya Thangal vs. State of Kerala and ors reported in (2007) 6 VST 432 and in the case reported in 2004(3) KLT 915. 8.4. It is vehemently submitted by Shri Vora, learned Assistant Government Pleader that Section 8 of the Entry Tax Act stipulates assessment after return is filed. It is further submitted that no power is given to authorities to make assessment in the situation where no return is filed. It is submitted that in such circumstances, the authorities have power to issue demand notice in the circumstances, the tax is liable to be paid at the time of entry of specified goods into the State and not paid by petitioner. It is submitted that as per the scheme of entry tax, any dispute Page 20 of 39 C/SCA/5379/2016 CAV JUDGMENT regarding specified goods may be adjudicated thereafter. 8.5. It is further submitted that there is no bar to issue demand notice prior to adjudication, if law permits. In support of his above submission, he has also relied upon Section 210(3) of the Income Tax Act, 1961 which gives power to the officers to issue demand notice at the stage of determining advance tax without any adjudication. 8.6. It is vehemently submitted by Shri Vora, learned Assistant Government Pleader that from reading of Entry Tax Act, the possible interpretation is that officer can issue demand notice once he is of the view that goods entered into territories of State are specified goods and no tax is paid thereon. It is submitted that dealer can thereafter pay tax and file return. It is submitted that on the basis of the filed return, assessment would be carried out. It is submitted that at that stage whether the goods are “specified goods” is required to be charged. It is submitted that any other interpretation would allow the dealer to escape from tax if not caught for non filing of return and / or non payment of tax. In support of his submissions, Shri Vora, learned AGP has heavily relied upon the decision in the case of M. Pentiah and ors vs. Muddalal Veeramallappa reported in AIR 1961 SC 1107. Making above submission and relying upon the above decision, it is requested to dismiss the present petitions. 9.0. Heard the learned advocates for the respective parties at length. Page 21 of 39 C/SCA/5379/2016 CAV JUDGMENT 10. So far as Special Civil Application No. 5379 of 2016 preferred by the M/s. M.H. Khanusiya is concerned, the petitioner has prayed for an appropriate writ, direction and order quashing and setting aside the impugned notice dated 20.02.2016 by which, the petitioner is called upon to pay entry tax under the provisions of Entry Tax Act. The petitioner also prayed to quash and set aside the assessment order dated 13.06.2016. 10.1. So far as Special Civil Application No. 7844 of 2016 preferred by the petitioner ­Ultratech Cement Limited, the petitioner has challenged the impugned demand notice dated 13.04.2016, by which, the petitioner is called upon to pay entry tax with interest and penalty on three purchases of Hydraulic Excavator. 11. The impugned notices / orders of assessment (in Special Civil Application No. 5379 of 2016) are challenged by the respective petitioners on the ground stated herein above and mainly on the ground that the impugned notices are barred by limitation provided under Section 8(5) of the Entry Tax Act as well as before the order of assessment is passed, such a demand cum notice directing the petitioner to pay entry tax is not permissible and is bad in law and also on the ground that on the goods so brought within the State of Gujarat, entry tax is not leviable as they are not\"specified goods\" and Page 22 of 39 C/SCA/5379/2016 CAV JUDGMENT therefore, on such goods they are not liable to pay entry tax. 11.1 While considering the issue involved in the present petitions, the relevant provisions of the Entry Tax Act, 2001 are required to be referred to and considered, which are as under: Section 3: Incidence Tax: 3(1).Subject to the other provisions of this Act, on and from the 1 st day of September, 2001, there shall be levied and collected on the entry of specified goods into a local area, a tax on the purchase value thereof at such rates as may be fixed by the State Government by notification in the Official Gazette, but not exceeding the maximum rates specified in column 4 of the Schedule; and different rates may be fixed for different specified goods. Section 3(3): The tax shall be in addition to the tax levied and collected as octroi by a municipal corporation of a city constituted under the Bombay Provincial Municipal Corporations Act, 1949 or any other local authority, as the case may be, within its local area. Section 4: Reduction in tax liability. (1)The amount of tax leviable under this Act shall, subject to such conditions as may. Be prescribed’, be reduced to the extent of the amount of tax paid, if any, under the law relating to Sales Tax as may be in force in any other State or Union Territory by an importer who had purchased the specified goods in that State. (2)The amount of tax leviable under this Act shall, subject to such conditions as may be prescribed’, be reduced to the extent of the amount of tax to be paid, If any, under the Central Sales Tax, Act, 1956 on the purchase of the specified goods in the course of inter­ Page 23 of 39 C/SCA/5379/2016 CAV JUDGMENT State trade or commerce. Section 7: Returns:­ (1) Every person liable to pay tax under this Act shall furnish returns in such from for such period, by such dates, and to such authority as may be prescribed. (2) If any person liable to pay tax under this Act, having furnished return under sub­ section (1) discovers any commission or incorrect statement therein, he may furnish a revised return before the expiry of (one month) from the last date prescribed for furnishing the original return. Section 8: Assessment. (1)The amount of tax due from a person liable to pay tax under this Act shall be assessed separately for such period as may be prescribed. (2)If the Assessing Authority is satisfied that the return furnished by a person liable to pay tax under this Act is correct and complete, he shall assess the amount of tax due from the person on the basis of such return (3)If the Assessing Authority is not satisfied that the return furnished by a person liable to pay tax under this Act is correct and complete, and the Assessing Authority thinks it necessary to require the presence of the person or the production of further evidence, the Assessing Authority shall serve on the person in prescribed manner a notice’ requiring him on a date and at a place specified therein, either to attend and produce or cause to be produced such evidence as is specified in the notice.. On the date specified in the notice, or as soon as may be thereafter, the Assessing Authority shall, after considering all the evidence which may be produced, assess the amount of tax due from the person. (4)If a person fails to comply With the requirements of any notice issued under sub­section (3), the Assessing Authority shall determine the purchase value Of tile specified goods under the proviso to clause (I) of section 2 and assess to the best of his judgement, the amount of tax due from him. (5)No order of assessment under sub­section (3)or (4) shall be made after the expiry of Page 24 of 39 C/SCA/5379/2016 CAV JUDGMENT three Year$ from the last date prescribed for furnishing of returns of the particular period. If for any reason, such order is not made within the period aforesaid, then the return so furnished shall be deemed to have been accepted as correct .and complete for assessing the tax due from such person Section 9:Reassessment If, after a person liable to pay tax under this Act has been assessed under Section 8 for any period, the Assessing authority has reason to believe that any purchase value or part thereof has, in respect of that period, escaped assessment ; or has been under assessed or assessed at a lower rate, then the Assessing .Authority may, within five years from the date of the order of assessment of the particular period, after giving the person a reasonable opportunity of being heard, reassess, to the best Of his judgement, the tax due from him. Section 10 .Payment of tax (1)The tax shall be paid in the manner hereinafter provided. (2)A person liable to pay the tax, shall, before furnishing return as required by sub­section (1) of section 7, first pay into the Government treasury in the prescribed manner, the whole of the amount of tax due from him according to such return. (3)If a person liable to pay the tax furnishes a revised return in accordance with sub­section (2) of section 7, and if such revised return shows that the amount of tax is larger than the amount of tax already paid or payable. He shall first pay into the Government treasury in the prescribed manner the additional amount of tax according to such revised return. (4)The amount of (I)tax due where return has been furnished without full payment thereof, or (ii) difference in the tax assessed under section 8 or reassessed under section 9 for any period and the sum already paid by the person in respect of such period, and (iii)penalty (if any) levied under section 17 shall be paid by the person into the Government treasury by such date as may be specified in the notice. Issued Page 25 of 39 C/SCA/5379/2016 CAV JUDGMENT by the Assessing Authority for this purpose, being a date not earlier than thirty days from the date of service of the notice (5)Any tax or penalty which remains unpaid after the date specified in the notice for payment, shall be recoverable as an arrear of land revenue, and for that purpose all the Assessing Authorities shall have and exercise all the powers of a Collector under the provisions of the Bombay Land Revenue Code, 1879. Section 10A : Special mode of recovery (1) Notwithstanding contained anything contained in any law or contract to the contrary, the Assessing Authority may at any time or from time to time, by notice in writing, a copy of which shall be forwarded to the importer at his last known address, require:­ (a) any person from whom any amount of monies is due or may become due, to an importer on whom notice has been served under sub­section(1) or (b). any person who holds or may subsequently hold monies fro or an account of such importer to pay to the Assessing Authority, either forthwith upon the monies becoming due or being held or within the time specified in the notice (but not before the monies becomes due or is held as aforesaid) so much of the monies as in sufficient to pay the amount due by the importer in respect of the arrears of tax or penalty under this Act, or the whole of the money when it is equal to or less then the amount. Section 11:Refund of tax The Assessing Authority shall, on an application made in such form and within such period as may be prescribed, refund to a person the amount of tax and penalty, if any, paid by such person in excess of the amount due from him. The refund may be either by cash payment, or at the option of such person, by deduction of such excess from the amount of tax and penalty, if any due from such person in respect of any Page 26 of 39 C/SCA/5379/2016 CAV JUDGMENT other period : Provided that the Assessing Authority shall first apply such excess towards the recovery of any amount due in respect of which a notice under subsection (4) of section 10 has been issued, and shall then refund the balance, if any, in such manner as may be prescribed. Section 17:Penalty (1) If any person liable to pay tax under this Act fails to comply with any of the provisions of this Act, then the Assessing Authority may, after giving such person a reasonable opportunity of being heard, by, order in writing, impose on him, in addition to any tax payable, a sum by way of penalty not exceeding twice the amount of tax. (2) If the person does not, without reasonable cause, pay the tax within the time, he is required by or under the provisions of this Act, to pay it, the Assessing Authority may, after giving sllch person a reasonable opportunity of being heard, by order in writing, impose upon him by way of penalty, in addition to the amount of tax and penalty under sub­ section (1), a sum of equal to eighteen per cent per annum for the period during the time the person continues to make default in the payment of tax. (3) If any person commits breach of any rule punishable with penalty, the Assessing Authority may, after giving such person a reasonable opportunity of being heard, by order in writing impose upon him a sum by way of penalty not exceeding the sum of penalty specified in the rule. Rule 3.Payment of Tax: Every importer, ­ (a) Who is not a registered dealer shall, within two days of entry of specified goods into local area, pay into a Government Treasury the tax payable under the Act; (b) who is a registered dealer shall, within a period of one month and three days immediately succeeding the month for which return is required to be furnished, pay into a Government Treasury, the tax due and payable under the Act. (c). Notwithstanding anything contained Page 27 of 39 C/SCA/5379/2016 CAV JUDGMENT in this rule, for the goods specified under entry at serial number 12 in the Scheduled appended to the Government Notification, Finance Department No. (GHN­20) GEA­2008/(S­3) (3) TH, Dated THE 1st April, 2008, brought into local area, an electronic operator referred to in clause (d) of rule 2 only shall be liable to pay tax. Such electronic operator shall, within two days of entry of specified goods into local area, pay into a Government Treasury, the tax due and payable under the Act: Rule 4.Method of payment of tax and penalty. (1) Every payment of tax and penalty shall be accompanied by a return­cum chalan in Form I obtained from a Government Treasury or the Assessing Authority appointed under section 5 of the Act. (2) The payment made into a Government Treasury shall be accompanied by a return­ cum­chalan, in quadruplicate. The copies marked “Original” and “Duplicate” shall be returned to the importer duly receipted, of which the copy marked “Duplicate” shall be submitted by the importer to the Assessing Authority in accordance with the provisions of this rule. Rule 5. Reduction in tax liability. The amount of tax shall be reduced under sub­sections (1) and (2) of section 4 of the Act, subject to the following conditions, namely: ­ (I)The importer shall produce before the Assessing Authority,­ (a) the purchase invoice, along with a copy thereof, wherein the amount of tax payable, under the law relating to Sales Tax in the State or the Union Territory or as the case may be, the Central Sales Tax, was charged by the vendor who is a dealer registered under such law and who had sold the specified goods to the importer from that State or, as the case may be, the Union Territory, or (b) A declaration, along with a copy thereof, from such vendor, declaring inter­alias that he had included the amount of such tax in the price charged by him in the purchase invoice. (ii)The importer shall furnish to the Assessing Authority the copy of the purchase invoice Page 28 of 39 C/SCA/5379/2016 CAV JUDGMENT mentioned in clause (a) or as the case may be, the copy of the declaration mentioned in clause (b). Rule 6. Return­cum­chalan. (1)An importer shall furnish a return­cum­chalan in Form 1, appended to these rules, to the Assessing Authority within whose jurisdiction the specified goods are brought for consumption, use or sale. (2)An importer, ­ (a) Who is not a registered dealer shall furnish return­ cum­chalan under subrule (1), within three days of entry of specified goods into local area, (b) Who is a registered dealer shall furnish return­cum­ Chalan under subrule (1), within a period of one month and fifteen days immediately succeeding the month for which return­cum­chalan is required to be furnished. (c).Notwithstanding anything contained in this rule, an electronic operator referred in clause (d) of rule 2, whether registered dealer or not, shall furnish online, a return Form 1A within a period of seven days immediately succeeding the month for which return is required to be furnished. Such importer shall also furnish the details in Form AA within three days of entry of specified goods into local area.\" Provided that the electronic operator, who deposits an amount equivalent to intimated amount of tax payable for the period prescribed as under, may furnish the details in Form 1AA for the said month within the time limit as under: Period of Calender Month Time Limit From day 1st to 7th 10th day From day 8th to 15th 18th day From day 16th to 23rd 25th day From day 24th to end of month 3rd day of next month Page 29 of 39 C/SCA/5379/2016 CAV JUDGMENT (3) An importer shall furnish revised return­cum­chalan in Form 1. Rule 7. Assessment. (1)The amount of tax due from an importer, ­ (a) Who is not a registered dealer shall be assessed within three days of entry of specified goods into local area, (b) Who is a registered dealer shall be assessed within a period of three months immediately succeeding the month for which return­cum­chalan is required to be furnished. (2)The notice referred to in sub­section (3) of section 8 shall be in Form 2. (3)Where the tax could not be assessed as per sub­rule (1), the assessment shall be made by the Assessing Authority in whose jurisdiction the specified goods are found or detected as having been consumed, used or sold. (4)The amount of tax assessed, as per sub­rule (3) shall be recovered in cash from the importer and a receipt to that effect shall be issued. Rule 8. Notice for payment of tax or penalty. A notice under section 10 for payment of tax or penalty shall be in Form 3. 11.2 Return cum challan is required to be furnished in Form 1, as under: Form ­1(See rules 4 and 6) Return – cum – chalan / Revised return – cum – chalan Name and address of importer :­ PAN No._______________ _______________________________________________________________ Registration no. under the Gujarat Value Added Tax Act, 2003) (If any) _______________________________________________________________ CST Reg. No. (if any) ________________________________________________________________ Page 30 of 39 C/SCA/5379/2016 CAV JUDGMENT Period From : ­ To SR.N o. Description of specified goods imported Purchase value of specified goods imported Rate of Tax Amount of Tax Amount to be reduced under sub­ section (1) or (2) or Section 4 Amount of tax (depsoit or) payable 1 2 3 4 5 6 7 ________________________________________________________________ Total ________________________________________________________________ The amount of tax as per column no. 7 being Rs. __________ _ Rs. ___________________ (in words) paid in cash /chaque No. ___ Dated _____ of _________ (Bank)_________ (Branch). The above statement is true to the best of my knowledge and belief. Date: Signatures Place:­ Status of importer FOR USE IN THE TREASURY Received Rs. ________, Rs (in words) _____________ Date of Entry ______ Chalan No. _______ From Mr./ Ms. ____________________________________________ Address. __________________________________________________ Signature of Treasury officer or Bank Officer or Assessing Authority 11.3. Notice for assessment is provided under sub rule (2) of Rule 7 of Rules, 2001, shall be in Form 2, as under: Form – 2 See sub rule (2) of rule 7 Notice for Assessment To, M/s ————————————————————— ———————————————————————­ ———————————————————————­ Page 31 of 39 C/SCA/5379/2016 CAV JUDGMENT ———————————————————————­ WHEREAS desire to satisfy myself that the returns – cum chalan furnished by you in respect of the period from to are correct and complete. AND WHEREAS having effected an entry of specified goods into local area’ during the period from to in respect of which you are liable to pay tax under the Gujarat Tax on Entry of Specified goods into Local Areas Act, 2001 you have not furnished by the prescribed date return – cum – chalan in respect of the said period. You are hereby directed to attend at (place) at (time) on date and produce or cause to be produced any evidence on which you rely in support in the said returns­cum­chalan and at the same time produce or cause to be produced the following documents and account and furnish or cause to be furnished the following information. 1 . 2. 3. You are also directed to show cause as to why penalty under sub­section (1) of section 17 of the said Act in respect of the period from to should not be imposed upon you. Place Signature Date Designation (Seal ) 11.4. Notice for payment of tax for penalty as per Rule 8 shall be in Form 3, as under: Form – 3 (see rule 8) Notice for payment of tax or penalty To, Page 32 of 39 C/SCA/5379/2016 CAV JUDGMENT You are required to pay the sum of Rs. ____________________as under: 1. Amount of tax unpaid as per return – cum – chalan Rs. _______________ 2. Amount of tax assessed for the period from ______________to______________________ Rs.____________ 3. Amount of Penalty Rs_______________ You are here by directed to pay the outstanding dues of Rs._______________ Rupees (in word) in to the Government Treasury within days from the service of the notice failing which the same will be recovered as an arrear of Land Revenue. Date: Signatures Place: Designation 11.5. Considering the relevant provisions of the Entry Tax Act, 2011 referred to and reproduced herein above and as per the scheme of the Act, on and from first day of September 2001, there shall be levied and collected entry of specified goods into local area, a tax on the purchase value thereof at such rates as may be fixed by the State Government by Notification in the Official Gazette but not exceeding the maximum rates specified in column no.3 of schedule. It further provides that such entry tax shall be in addition to the tax levied and collected, as octroi by a Municipal Corporations or any other local authority. It also further provides that amount of tax leviable, shall, subject to such conditions as may be prescribed, be reduced to the extent of the amount of tax paid, if any, under the law relating to Sales Tax as may be in force in any other State or Union Territory by an importer who has purchased the specified goods in that State. It also further provides that amount of tax leviable under the Entry Tax Act, shall, subject to such conditions as may be prescribed, be reduced to the extent of the amount of tax paid, if any, under the Central Sales Tax Act, Page 33 of 39 C/SCA/5379/2016 CAV JUDGMENT 1956 on the purchase of the specified goods in the course of inter State trade or commerce. Similar reduction is provided in goods tax under the Gujarat Value Added Tax Act is paid. Section 7 is with respect to the returns. It provides that every person liable to pay tax under this Act shall furnish returns in such from, for such period, by such dates, and to such authority as may be prescribed. At this stage, it is required to be noted that as per the scheme of the Entry Tax Act and Rules, 2001 and as per the Rule 3 every importer is required to first pay the tax due and payable under the Entry Tax Act along with return in the form of return­cum­challan as per the Form No.1. If the importer is not registered dealer, in that case, is required to pay tax within the period of two days of entry of specified goods into local area and if such importer is registered dealer in that case, within a period of 21 days immediately succeeding the month for which return is required to be furnished. That as per the scheme of the Act and Rules after return­cum­ challan is filed, thereafter the question with respect to assessment will arise as provided under Section 8. As per sub­section(5) of Section 8, no order of assessment under sub­section (3) or (4) shall be made after the expiry of three years from the last date prescribed for furnishing of returns of the particular period. It further provides that if for any reason, such order is not made within the period aforesaid, then the return so furnished shall be deemed to have been accepted as correct and complete for assessing the tax due from such person. As per the scheme of the Act and as per Section 10, a person liable to pay the tax, shall before furnishing return as required by sub­section(1) of Section 7, first pay into the Government treasury in the prescribed manner, Page 34 of 39 C/SCA/5379/2016 CAV JUDGMENT the whole of the amount of tax due from him according to such return. As observed herein above and as provided under Rule 6 of the Rules, 2001, the importer is required to furnish return cum challan in Form 1, within three days of entry of specified goods into local area in case the importer is not registered dealer and in case importer is registered dealer shall furnish return cum challan under said Rule within a period of 21 days. Therefore, the limitation for assessment as provided under sub­section(5) of Section 8 shall be three years from the last date prescribed for furnishing the return, provided the importer has filed the return. In case, the importer has not filed the return at all, sub­section(5) of Section 8 shall not be applicable. We are fortified with the aforesaid view by the decision of the Kerala High Court in the case of A. Kunhikoya Thangal (supra). The Kerala High Court in the aforesaid decision while considering pari­materia provisions under the Kerala Act has specifically observed and held that limitation apply to the cases where return has been filed by the assessee and the period of limitation not applicable, where no return is filed by the assessee. 11.6. Therefore, submission on behalf of the petitioner that impugned notice and / or assessment order are barred by limitation as provided under Section 8 of the Act is concerned, cannot be accepted. 12.0. Now, so far as submission on behalf of the petitioner that as they were of the opinion and they believed that the goods which were imported, were not specified goods and therefore, not liable to pay entry tax and therefore, they were required to file return and therefore, did not file the return is concerned, the aforesaid Page 35 of 39 C/SCA/5379/2016 CAV JUDGMENT submission is contrary to the scheme of the Act and Rules as observed herein above. If the submission on behalf of the petitioner is accepted in that case, every importer would not file return and return­cum­ challan and would not be pay tax on the ground that it believes that goods are not specified goods. As per the scheme of the Act and the Rules, as soon as goods are imported, the tax shall be paid along with return and the return­cum­challan in form 1, in which amount to be reduced under sub­section(2) of Section 4 of Entry Tax Act, 2001 is also required to be stated and question whether goods imported is specified goods or not are required to be considered during the assessment, provided return is filed along with tax and the return­ cum­challan in form 1 is filed. 12.1. Similarly, the submission on behalf of the petitioner that unless and until assessment order is passed and the amount of tax is determined there is no question of making payment of tax is concerned, the aforesaid submission is also contrary to the scheme of the Act and Rules. 13.0. Now, so far as submission on behalf of the petitioner that under the provisions of Gujarat Value Added Tax Act, the assessee is entitled to claim tax credit equal to the amount of tax under the Entry Tax Act and therefore, the submission on behalf of the petitioner that if the provisions of Entry Tax Act were to be interpreted in a manner wherein the respondent authorities are empowered to compel the petitioner to file return cum challan under the Entry Tax Act after the expiry of prescribed period under Rule 6 of Entry Tax Rules it would be tantamount to depriving the petitioner of the opportunity of claiming such tax credit in respect of the VAT paid during the Page 36 of 39 C/SCA/5379/2016 CAV JUDGMENT corresponding period is concerned, still the petitioner can file return­ cum­challan and on payment of tax can still get credit under the provisions of Gujarat Value Added Tax Act, if at all the same is allowable. Similarly, while filing return­cum­challan and making the payment of entry tax, the importer shall be entitled to reduction in tax liability as provided under Section 4 of the Act. Even in the form 1 there is a specific column with respect to the reduction in tax liability as per Section 4(1)(2) of the Act. Therefore, while making payment of entry tax as demanded, the petitioner shall be entitled to deduction in tax liability as provided under Section 4 of the Act. In view of the above and for the reasons stated above, challenge to the impugned notice / demand cum notice fail. 14.0. Now, so far as reliance placed upon the decision of the Hon'ble Supreme Court in the case of Standard Chartered Finance Ltd (supra) relied upon by Shri S.N. Soparkar, learned counsel for the petitioner of Special Civil Application No.7844 of 2016 is concerned, at the outset, it is required to be noted that on facts said decision shall not be applicable. It appears that in the case before the Hon'ble Supreme Court the assessee have filed its return for the relevant assessment year but no assessment order was passed and therefore, it is held that no assessment order is passed there could not be a notice for re­assessment. 15.0. Now, so far as submission on behalf of the petitioner of SCA No. 7844 of 2016 that hydraulic excavator imported are not \"specified goods\" is concerned, at the outset, it is required to be noted that said aspect is required to be considered during the assessment proceedings, provided the petitioners­ importer files return­cum­ Page 37 of 39 C/SCA/5379/2016 CAV JUDGMENT challan and respond to the notice for assessment. Therefore, it is observed that as and when return cum challan is filed along with payment of tax demanded, the said aspect be considered in accordance with law and on its merits, more particularly, said aspect may be considered during the assessment, provided the petitioner files return cum challan as per the impugned notice. 16.0. Now, so far as challenge to the impugned assessment order in SCA No. 5379 of 2016 is concerned, it is the case on behalf of the petitioner that same is in breach of principle of natural justice. The notice for assessment has been issued on 08.06.2016 and the petitioner was asked to remain present on 09.06.2016. The petitioner submitted brief written reply to the notice and requested for adjournment. However, learned AO has passed the order on 13.06.2016. The noting in the assessment order that one Shri NB Shah was heard for the petitioner is disputed by the petitioner and it is specific case on behalf of the petitioner that the said consultant was not available on that date. Be that as it may, it appears that assessment order dated 13.06.2016 has been passed in haste and therefore, same can be said to be in principles of natural justice as no sufficient opportunity has been given to the petitioner. Therefore, the matter is required to be remanded to the appropriate authority to pass fresh order in accordance with law and on merits after giving opportunity to the petitioner on all aspects, however provided and subject to first filing the return­cum­challan by the petitioner insofar as required and on payment of tax first as per the Scheme of the Act. 17.0. In view of the above and for the reasons stated above, Special Civil Application No. 7844 of 2016 is dismissed with above Page 38 of 39 C/SCA/5379/2016 CAV JUDGMENT observations and directions. The Special Civil Application No. 5379 of 2016 is hereby partly allowed and the impugned assessment order dated 13.06.2016 is hereby quashed and set aside with above liberty and with above observations and directions. Rule is discharged in Special Civil Application No. 7844 of 2016 and Rule is made partly absolute to the aforesaid extent in Special Civil Application No. 5379 of 2016. No costs. sd/­ (M.R. SHAH, J.) sd/­ (B.N. KARIA, J.) After the order was pronounced, learned advocate appearing for the petitioner of Special Civil Application No.7844/2016 has requested to continue the ad­interim relief granted vide order dated 06.05.2016 which was continued during the pendency of the petition, so as to enable the petitioner to approach the Hon'ble Supreme Court and obtain appropriate order. Considering the fact that vide order dated 06.05.2016, the Division Bench has granted the ad­interim relief, and the same has been continued till date, the ad­interim relief granted earlier vide order dated 06.05.2016 is hereby ordered to be continued upto 15.07.2018. sd/­ (M.R. SHAH, J.) sd/­ (B.N. KARIA, J.) Kaushik Page 39 of 39 "