M/S ROHTASH SWEETS AND FAST FOODS V. COMMISSIONER COMMERCIAL TAX

STRE/255/2018

AI Insights

The case involves M/S Rohtash Sweets And Fast Foods, the revisionist, who contested an assessment order passed by the Commercial Tax Tribunal, Meerut, which affirmed the tax demand of Rs. 21,56,000 on a total turnover of Rs. 2,25,00,000 for the assessment year 2014-15. The primary legal contention was the alleged invalidity of the notice issued under Rule 45(13)(a) of the U.P. Value Added Tax Rules, 2008, which required the assessee to file a revised return within 15 days. The assessee argued that the notice was invalid as it was issued just before the expiry of the statutory period for deemed assessment under Section 27(2)(b) of the Act. The Tribunal and the High Court rejected this argument, emphasizing that the assessing officer's actions were within legal bounds and the regular assessment under Section 28 was validly initiated.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 742671 (HC-UTTAR_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 02-08-2019
• Assessment Year: misc
• Other Referred Cases: M/s. Sheo Prasad Vinod Kumar, Jhansi Vs Union of India & Others, Commissioner of Customs And Central Excise Vs. Hongo India (P) Ltd. And Another, Commissioner of Income-tax, Kanpur Vs. Mohd. Farooq, Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur & Others, S/s Purwar Trading Co.
• Laws Referred To: U.P. Value Added Tax Act, 2008, U.P. Value Added Tax Rules, 2008
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: C S C ADVOCATE
• Assessee Lawyers: SUYASH AGARWAL; RAKESH AGARWAL
• Keywords: Deemed Assessment; Jurisdiction; Self-assessment; Technical defect; Mandatory time period
• Section: 28(2)(ii); 45(7); 45(13)(a); 27(2)(b)

Judgement Text

"1 A.F.R. Court No. - 1 Case :- SALES/TRADE TAX REVISION No. - 255 of 2018 Revisionist :- M/S Rohtash Sweets And Fast Foods Opposite Party :- Commissioner Commercial Tax Counsel for Revisionist :- Suyash Agarwal,Sri Rakesh Ranjan Agarwal Counsel for Opposite Party :- C.S.C. Hon'ble Saumitra Dayal Singh,J. 1. The present revision has been filed by the assessee against the order dated 14.08.2018 passed by the Commercial Tax Tribunal, Meerut in Second Appeal No.141 of 2018 for A.Y. 2014- 15 arising from an assessment made under Section 28(2)(ii) of the U.P. Value Added Tax Act, 2008 (hereinafter referred to as the Act). By that order, the Tribunal rejected the second appeal filed by the assessee and affirmed the first appellate order and the assessment order whereby the assessee was subjected to assessment to tax on a total turnover of Rs. 2,25,00,000/-. A total demand of tax Rs. 21,56,000/- was created of which Rs.19,42,326/- is the demand of disputed tax. 2. During the assessment year in question, the assessee - a registered dealer was engaged in the business of manufacture and sale of sweetmeats and bakery items. It filed its periodic returns for the relevant tax periods. Also, it filed its annual return on 28.12.2015, in the prescribed manner. In that regard, it has been clarified, though the last date for filing the annual return prescribed under Rule 45(7) of the U.P. Value Added Tax Rules, 2008 (hereinafter referred to as the Rules) was 30.10.2015, the same had been extended up to 31.12.2015. On 19.03.2017, a notice was issued to the assessee under Rule 45(13)(a) of the Rules. It alleged that the annual return filed by the assessee was incomplete. Other defects had also been noted in that notice. The assessee was directed to file its revised return within a period of 15 2 days, as contemplated under that Rule. 3. The assessee did not file reply to the said notice. In fact, since the notice dated 19 March, 2017 had been first served on the assessee on 20 March, 2017, it was claimed to be an invalid exercise of power since the period contemplated under Section 27(2)(b) of the Act expired on 31 March 2017, before the end of 15 days mandatory time period (that was also granted by the assessing authority to the assessee to file its revised return). In other words, before expiry of 15 days time under the notice dated 19.03.2017, an order of deemed assessment was claimed to have into existence, on 31 March, 2017. Later, on 27.02.2018 another notice was issued by the assessing authority of the assessee under Section 28 of the Act, stating that the return filed by the assessee for the A.Y. 2014-15 was incomplete and that the assessee had not filed its revised return despite service of notice under Rule 45(13) of the Rules. Accordingly, the assessee was required to participate in those assessment proceedings. The assessee filed a specific objection as to the jurisdiction of the Assessing Authority to proceed under Section 28 of the Act. The assessee also appears to have furnished reply on merits. Further notices were also issued to him, thereafter. However, it is a fact that the assessee did not fully participate in the assessment proceedings. Finally, an ex parte assessment order was passed against him on 31 March, 2018. In the first appeal filed by the assessee therefrom, the assessee appears to have only raised the issue of lack of jurisdiction with the Assessing Authority to pass an assessment under Section 28 of the Act. That objection was rejected. In the further appeal to the Tribunal, again, the assessee appears to have raised solitary issue of lack of jurisdiction of the Assessing Authority. It was again rejected by the Tribunal, by the impugned order. 4. According to the Tribunal, the assessee's assessment proceedings had been taken up under the self assessment 3 procedure prior to 31 March 2017, inasmuch as, undisputedly, the Assessing Authority had issued the notice under Rule 45(13)(a) of the Rules on 19 March, 2017. Then, the fact that the Assessing Authority did not allow for 15 days time to the assessee to file a revised return before the date 31.03.2017 was merely a technical defect, in view of the fact that despite sufficient time of 11 days granted or being available to the assessee, it did not make use of the same and did not file its revised return, before 31 March, 2017. Revised return being not filed, the deemed/self assessment proceedings under section 27 of the Act came to an end and the regular assessment proceedings were validly initiated. Thus, according to the Tribunal, there was no defect in the assessment order. 5. The present revision was entertained on the following questions of law. It is being decided at the stage of admission itself with consent of parties. “(i) Whether an assessment on deemed basis had arisen on 31.03.2017 by virtue of Section 27(2)(b) of the U.P. VAT Act, 2008 in absence of any prior notice having been issued to the assessee so as to allow him 15 days' time to submit his revised return in terms of Rule 45(13)(a) of the Rules framed under the aforesaid Act though the Assessing Officer had issued such notice to the assessee on 19.03.2017 served on 20.03.2017 ? (ii) Whether in the alternative the Tribunal was right in not deciding the appeal of the applicant on merits ?\" 6. Heard Sri Rakesh Ranjan Agarwal, learned Senior Advocate, assisted by Sri Suyash Agarwal, learned counsel for the applicant-assessee and Sri B.K. Pandey, learned Standing Counsel for the revenue. 7. Learned Senior Counsel would submit, the time limit provided under Rule 45(13)(a) of the Rules is mandatory and the same could not be cut short in absence of any enabling provision either under the Act or the Rules. Relying on the provisions of Section 27(1) read with Section 27(2)(b) of the Act, he submits, an order of deemed assessment would come into existence upon lapse of one year from the end of the assessment year in which 4 the last date of filing of return for the relevant assessment year fell, unless that process had been lawfully interjected by the Assessing Authority. 8. Therefore, first, the notice requiring the assessee to file a revised return should have been issued and served on the assessee on such date, and in such manner, as may necessarily have allowed the assessee 15 days time to file its revised return or reply or object before the last date mentioned under Section 27(2) (b) of the Act arrived. That notice should have therefore been served not later than 16 March, 2017. Since, the notice was issued on 19 March, 2017 and it was served on 20th March, 2017, the Assessing Authority did not allow the assessee mandatory minimum 15 days time to file its revised return. The notice was invalid. Consequently, a deemed order of assessment came into existence on 13 March, 2017. Also, for that reason, the Assessing Officer could not have assessed the assessee under Section 28 of the Act. 9. As to the prescription of time under Rule 45(13)(a) of the Rules, it has been submitted the legislature has not provided or permitted for curtailment or alteration of that period. A fixed period of limitation to do an Act having been prescribed, it was not for the Assessing Officer to curtail the same or to change the same. Reliance has been placed on the Division Bench decision of this Court in M/s. Sheo Prasad Vinod Kumar, Jhansi Vs Union of Inda & Others, 2001 U.P.T.C.-329; decision of the Supreme Court in Commissioner of Customs And Central Excise Vs. Hongo India (P) Ltd. And Another, (2009) 315 ITR 449 (SC); a full Bench decision of this Court in the case of Commissioner of Income-tax, Kanpur Vs. Mohd. Farooq, (2009) 317 ITR 305 and; another decision of the Supreme Court in the case of Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur & Others, 2008 (3) SCC 70. 10. By way of a further submission, learned Senior Counsel, 5 would state, though in view of the opening words of Section 27 of the Act, the scheme of deemed assessment under Section 27 of the Act is \"subject to\" provisions of Section 28 of the Act, yet, that consequence in law may arise only when the mandatory time limit of 15 days contained in Rule 45(13)(a) of the Rules is strictly adhered to. Otherwise, that Rule would become redundant. Thus the Assessing Authority is bound to act in conformity with the provisions of Section 27 of the Act read with Rule 45 of the Rules before he may render the deemed assessment procedure (under section 27) subject to or subservient to the regular assessment procedure (under section 28). 11. In other words, the Assessing Authority cannot circumvent the procedure by first issuing a notice contrary to the statutory provisions, and thus, prejudice the assessee by not allowing him sufficient time to revise his return, and thereafter, take benefit of such notice by drawing up regular assessment proceedings. Further emphasis has been laid on the use of the words “stipulated time” under Rule 45(13)(c) of the Rules. Since Rule 45(13)(a) of the Rules contemplates only a single period of time being 15 days, the “stipulated time” referred to in sub-Rule(c) cannot be any different from that period. In any case, it cannot be lesser than 15 days. 12. Opposing the revision, the learned Standing Counsel would submit, under Section 27 of the Act, no order is required to or may be passed by the Assessing Officer. That provision only creates a legal fiction as to the effect of filing of tax return, on the liability of tax and entitlement to Input Tax Credit (I.T.C.) which may otherwise arise upon passing of a regular assessment order. He has placed reliance on a recent decision of this court in Sales/Trade Tax Revision No. 232 of 2019 (The Commissioner, Commercial Tax U.P. Vs. S/S Purwar Trading Co.) decided on 24.07.2019. Thus, it has been submitted, Section 28 of the Act is an independent provision and in its operation, the jurisdiction of the 6 Assessing Officer is not governed or conditioned or restricted by the proceedings that may have been drawn up, concluded or dropped under Section 27 of the Act. 13. Referring to Section 29(3) of the Act, it has been submitted, the period of limitation prescribed for the Assessing Authority to pass an assessment is three years from the end of the relevant assessment year. However, for the legal fiction of deemed assessment to come into play, a shorter period of two years is prescribed. It is therefore his submission, irrespective of the fate of the proceedings under Section 27 of the Act i.e. whether those were valid or not, the Assessing Authority would retain to itself full jurisdiction to make an assessment under Section 28 of the Act. 14. In the above regard, he has also referred to Rule 45(13) (a) of the Rules to submit, under that provision of law, the Assessing Officer has a very limited jurisdiction to examine the annual returns to see whether such return is incomplete or incorrect or contains wrong particulars or whether net tax had not been paid in accordance with law. Contrasting those provisions with Section 28 of the Act, it has been submitted, the power to make a regular assessment, is not limited or governed or controlled by Section 27 of the Act. In fact Rule 45(13)(c) only specifies a contingency when a regular assessment may follow. However, it is not a general pre-condition to make a regular assessment under Section 28 of the Act. 15. Sections 27 and 28 of the Act read as below: “27. Self assessment- (1) Subject to provisions of section 28, every dealer, who has submitted the return of last tax period as well as the prescribed Annexures of Consolidated Details in the prescribed form and manner, shall be deemed to have been assessed to an amount of tax admittedly payable on the turnover of purchase or sale or both, as the case may be, disclosed in such Annexures and to an amount of input tax credit shown admissible in such Annexures. (2) For all purposes under this Act and rules made thereunder- (a) Annexures of Consolidated Details submitted by a dealer, shall be deemed to be an assessment order and facts disclosed or figures mentioned in such Annexures shall be deemed part of such assessment order; and (b) last date of the assessment year, succeeding the assessment year in 7 which the date prescribed for submission of such Annexures of Consolidated Details falls, shall be deemed to be the date of such assessment order. 28. Assessment of tax after examination of Records- (1) In following types of cases or dealers, the assessing authority, after detailed examination of books, accounts and documents kept by the dealer in relation to his business and other relevant records, if any, and after making such inquiry as it may deem fit, subject to provision of sub- section (9), shall pass an assessment order for an assessment year in the manner provided in this section:- (a) in cases of such dealers as are specified or selected for tax audit by the Commissioner or any other officer, not below the rank of a Joint Commissioner, authorized by the Commissioner in this behalf; in such manner and within such time as may be prescribed. [See Rule 43] (b) in case of a dealer falling in any of the categories below, (i) dealer who has not submitted Annexures of Consolidated Details or revised Annexures of Consolidated Details of turnover and tax, within the time prescribed or extended; or such Annexures of Consolidated Details contain wrong or incorrect particulars or do not accompany declaration or certificate for exemption or reduction in the rate of tax, or (ii) dealer by whom tax return for one or more tax periods of the assessment year have not been submitted; or (iii) dealer in whose case assessing authority has passed provisional assessment order under section 25 in respect of one or more tax periods to the best of its judgment; or (iv) dealer in whose case, on the basis of material available on records, if the assessing authority is satisfied that the turnover of sales or purchases or both, as the case may be, and amount of tax shown payable as disclosed by the dealer in Annexures of Consolidated Details are not worthy of credence or tax shown payable in these Annexures has not been deposited by the dealer, or the amount of input tax credit claimed is wrong or the amount of tax payable shown is incorrect; or (v) dealer who has prevented or obstructed an officer empowered to make audit, survey, inspection, search or seizure under the provisions of this Act; or [(vi) ...............] omitted Provided that where the aggregate turnover of any dealer, does not exceed rupees twenty five lakh or such larger amount as may be determined by the State Government from time to time, in any assessment year, the Commissioner shall determine the parameters and modalities to select the dealers for the annual assessment after examining the books of accounts or records of such dealers: Provided further that notwithstanding anything contained in section 26, the dealer not selected under the first proviso shall be deemed to have been assessed, on the last date of assessment year succeeding the assessment year in which the date of filing of annexures of consolidated details of the assessment year falls. (2) Where after examination of books, accounts, documents and other records referred to in sub-section (1), - (i) the assessing authority is satisfied about correctness of turnover of sale or purchase or both, as the case may be, disclosed by the dealer, it may assess the amount of tax payable by the dealer on such turnover and determine the amount of input tax credit admissible to the dealer or amount of reverse input tax credit payable by the dealer; and (ii) where assessing authority is of the opinion that turnover of sale or purchase or both, as the case may be, disclosed by the dealer is not worthy of credence, it may determine to the best of its judgment the turnover of sale or purchase or both, as the case may be, and assess 8 the tax payable on such turnover and determine admissible amount of input tax credit and reverse input tax credit payable by the dealer. (3) Before making an assessment under sub-section (2), dealer shall - (i) be required to furnish Annexures of Consolidated Details if he has not already submitted such Annexures; (ii) be given reasonable opportunity of being heard; and (iii) be served with a notice to show cause, where determination of turnover, input tax credit or reverse input tax credit, or assessment of tax, all or any one of them, as the case may be, are to be made to the best of the judgment of the assessing authority. (4) The show cause notice referred to in sub-section (3) shall contain all such reasons on which the assessing authority has formed its opinion about incorrectness of the turnover of sale or purchase or both, as the case may be, amount of tax, amount of input tax credit or amount of reverse input tax credit. (5) Order of assessment shall be in writing and copy of assessment order along with prescribed notice of demand of the balance amount of tax, if any, to be deposited by the dealer, shall be served on the dealer. (6) Dealer shall deposit amount of tax assessed in excess of amount of tax deposited by him for the assessment year, within a period of thirty days after the date of service of the assessment order and notice of demand. (7) Where the amount of tax deposited by the dealer is found in excess of tax assessed, the same shall be refunded to the dealer according to the provisions of this Act. (8) Assessing authority shall not be precluded from making assessment order under this section on the ground of passing of any provisional assessment order in respect of any tax period under section 25 and such provisional assessment order, if any, shall stand merged in the assessment order passed under this section. (9) Notwithstanding anything to the contrary in any other provision of this Act, where an unregistered dealer brings any taxable goods from outside the State more than once during an assessment year, separate assessment relating to goods brought on each occasion may be made for the same assessment year. (10) The provisions of this Act shall apply to each assessment order passed under sub-section (9) as they apply to an order passed under sub-section (2). (11) Dealers under sub-section (9) shall not be required to furnish Annexures of Consolidated Details and in cases of such dealers assessment under sub-section (9) may be made even before the expiry of the assessment year. (12) Provisions of sub-sections (5), (6) and (7) shall, mutatis mutandis, apply to every assessment order passed under any provisions of this Act.” 16. Also, Rule 45(13) of the Rules reads as below: “45. Submission of returns.- (1) …........................ …............................ (13)(a) Where, on examination of the annual return, it is found that the return is incomplete or correct or contains wrong particulars or net tax has not been paid according to the provisions of the Act and in these rules or not accompanied by required Forms of declaration or certificate, the assessing authority shall serve to the dealer a notice to submit the revised return within 15 days from the date of service of notice. (b) If the assessing authority is satisfied that revised annual return is complete and correct he shall accept the annual return for self assessment and shall inform the dealer accordingly. 9 (c) If dealer fails to submit the revised return within stipulated time, the assessing authority shall proceed for assessment in accordance with provision of section 28.” 17. Having heard learned counsel for the parties and having perused the record, under Section 24 of the Act, a taxable dealer is obliged to submit its tax return for different tax periods, as also its annual return. Section 25 of the Act provides for assessment of tax for a tax period i.e. a provisional assessment. Tax period has been defined under Section 2(ak) of the Act, as a period for which a dealer is liable to submit tax return under Section 24 of the Act. Section 26 of the Act provides, every taxable dealer, for each assessment year shall be assessed to tax payable by him and to amount of Input Tax Credit (I.T.C.) admissible to him. Thus, it fixes the scope and purpose of an assessment to be made. It is in the above statutory context, provisions of Sections 27, 28 and 29 of the Act appear and they provide for self-assessment; assessment of tax after examination of record and; assessment of tax of turnover escaped from assessment year appear. 18. The scope of Section 27 of the Act has been dealt with by this court in the case of S/s Purwar Trading Co. (supra), where it has been held as below: \"12. Perusal of sub-section 1 of Section 27 of the Act, makes it clear that a deemed assessment arises by operation of law to the amount of tax admittedly payable on the disclosed turnover of sale or purchase or both, as the case may be, disclosed by the assessee. Thus, the Act does not contemplate any order to be passed by the assessing authority but it only contemplates the effect or consequence of a disclosure made by the assessee in manner prescribed. Thus, by deeming fiction the act of disclosure made by a n assessee has been placed on parity with an assessment order that may otherwise be passed. The purpose and effect of the deeming fiction is that notwithstanding any order passed by the assessing authority, the assessee who may have filed a return, would become bound to pay admitted tax and to avail Input Tax Credit (ITC) as he otherwise would be, had he been regularly assessed to tax. 13. That intent has been further made clear by Section 27(2)(b) of the Act. It provides for the date on which such deemed order of assessment may come into existence or deeming fiction may come to life. That date has been defined or prescribed by the Act as the last date of the assessment year following the assessment year during which the last date to file the return for the relevant assessment year expired. 14. Thus, Section 27 of the Act does not contemplate coming into existence of any order, in any manner, neither by conscious exercise of power nor upon application of mind by the assessing authority. In fact neither an order is required to nor can be passed by the assessing authority and no order ever comes into existence. Rather, it is a pure legal fiction created by the legislature. Only the imagination in law gives birth to two effects or consequences of an assessment order. The imagination is driven, solely by the self-act of the assessee of filing his return of turnover. That solitary act needs no contribution or any corresponding or consequential or other 10 act to be performed by the assessing authority. It gestates for one year from the end of the assessment year in which the last date to file that return expired. Upon completion of that period of time the imagination in law springs forth. 15. Thus, by way of first effect or consequence, the assessee becomes bound to discharge the admitted tax liability. Second, he earns a right to claim ITC. Both effects or consequences arise due to passage of prescribed time, solely on account of the return filed by him. That being done, no other or further consequence can ever arise as the legislature did not contemplate or provide for a third effect or consequence of the event of filing return by an assessee. The settled rule of interpretation prohibits any extension beyond the clearly visible legislative field, noted above. Reliance may be placed on that expression of law made by Justice S.R. Das (as his lordship then was), in his dissenting opinion in the Constitution bench decision of the Supreme Court in State of Travancore-Cochin & Ors Vs. Shanmugha Vilas Cashewnut Factory, Quilon; AIR 1953 SC 333 (para 38), which principle was reiterated and applied by another Constitution bench of the Supreme Court in Bengal Immunity Co. Vs. State of Bihar; AIR 1953 SC 661 (para 31). Consequently, no assessment order can be assumed or imagined to exist in law, for any other purpose such as rectification of mistake etc. 16. Also, the powers of the assessing authority to pass any assessment order are contained in the later provisions being Sections 28 and 29 of the Act. A regular assessment order may be passed by the assessing officer under Section 28 of the Act. Also, in the event of any escapement of the turnover from assessment, the assessing authority has been given the power to make a re-assessment under Section 29 of the Act. While a regular assessment may be made in the normal period of limitation, that is prescribed as three years, under Section 29(3) of the Act, the re-assessment order may be passed even thereafter subject to the stipulations contained under Section 29 of the Act\". 19. Section 28 of the Act provides for a full-fledged or regular assessment to be made. However, it departs from its predecessor enactment i.e. U.P. Trade Tax Act, 1948. The Act contemplates a regular assessment upon examination of records be made only in certain cases specified in sub-section (1) of Section 28 of the Act. Thus, though section 26 of the Act requires an assessment to be made in each case, as to tax payable and I.T.C. entitlement available, besides the legal fiction under section 27 of the Act the same may also arise as a consequence of an assessment after examination of records or upon reassessment order made under section 29 of the Act i.e. as a result of conscious application of mind by the assessing authority to the books of account, return of annual turnover, prescribed statements and replies etc. that may collectively form the record of the assessment case. 20. First, under section 28(1)(a) of the Act an assessment may be made after examination of records in case(s) of such dealers, who may be specified or selected for tax audit. Second, under section 28(1)(b) of the Act, any other dealer who may not have been subjected to tax audit may yet be subjected to 11 assessment upon examination of record, if he falls in any one of the five categories mentioned in sub-clause (b) of sub-section (1) of Section 28 of the Act. Those are cases where: the dealer may not have submitted his annexures of consolidated details or revised annexures of consolidated details of turnover and tax within the time prescribed or extended time or; if such annexures of consolidated details contain wrong or incorrect particulars or do not accompany the declaration or certificate for exemption or reduction in the rate of tax or; if a dealer has not submitted one or more returns for any tax period during the assessment year or; a provisional assessment order may have been passed in his case under Section 25 of the Act, for any tax period on best judgement basis or; the assessing officer is satisfied that the turnover of sale or purchase or both, as disclosed is not worthy of credence or admitted tax has not been deposited or Input Tax Credit (I.T.C.) has been wrongly claimed or tax payable has been incorrectly shown or; the dealer had prevented or obstructed the conduct of audit, survey, inspection, search or seizure under the Act, he may be subjected to assessment upon examination of record. 21. On the other hand, the assessment of tax of turnover escaped from assessment may arise under Section 29 of the Act, if the assessing officer has reason to believe that the whole or any part of the turnover of the dealer has escaped the assessment. Those again are provisions, with which presently we are not concerned. At the same time, Section 29(3) of the Act clearly prescribes the normal period of limitation for making an assessment or reassessment as three years from the end of the assessment year in question. 22. Thus, in view of the first conclusion drawn, there never came into existence any order of deemed assessment. That legal fiction came into existence upon passage of two years time from the end of the relevant assessment year. Therefore, the limitation to pass an assessment order contained in Section 29(3) of the Act 12 is referable only to an order of assessment of tax made after examination of records, under Section 28 of the Act or an order of assessment of tax on turnover that may have escaped assessment, under Section 29 of the Act. That period of limitation therefore remained unaffected by proceedings under Section 27 of the Act. 23. At the same time, in the event, an assessing officer, upon examination of the annual return finds that the return is incomplete or incorrect or contains wrong particulars or net tax, has not been paid according to the provision of the Act or the Rule, or if it is not accompanied by required forms of declaration or certificate, he may, even in exercise of powers vested under section 27 of the Act, serve such dealer a notice to submit his revised return within 15 days from the date of service of such notice in terms of the clear legislative stipulation contained in Rule 45(13)(a) of the Rules. Also, that time period is mandatory minimum and there is no legislative intent either express or implied as may allow the assessing officer to curtail that time period. Yet, it may not affect the assessee's act (in a given case) to waive that requirement. To that extent, the submission advanced by learned Senior Counsel relyiing on the principle propounded in Hongo India (P) Ltd. (supra) and the full Bench decision of this Court in Mohd. Farooq (supra) has to be accepted. 24. Consequently, in a case where the assessee files its revised return in response to a notice issued under Rule 45(13)(a) of the Rules, and the assessing officer feels satisfied, as to its completeness and correctness, he may accept the same in exercise of power conferred under Rule 45(13)(b) of the Rules. In that case, the annual return would constitute the self-assessment, of which intimation would be given to the assessee. Thus, Section 27 of the Act read with Rule 45(13)(a) and (b) of the Rules provide for a deemed assessment in case the original return is accepted in entirety or a self-assessment if the revised return is accepted. In 13 either case, no order of assessment would come into existence. In both cases, a legal fiction (with twin consequences discussed above) arises. 25. In fact, only in the event, the assessing officer is not satisfied with the revised return as well, that Rule 45(13)(c) of the Rules states, the Assessing Officer shall proceed to make assessment of tax after examination of record under Section 28 of the Act. It does not and cannot override or restrict the plain applicability of the provisions contained in Section 28(1)(a) and (b) of the Act i.e. the principal legislation. In the first place, it is settled principle that the principal legislation would prevail over the delegated legislation. In Babaji Kondaji Garad v. Nasik Merchants Coop. Bank Ltd., (1984) 2 SCC 50, (paragraph 15 of the report) it was observed - \"...........................Now if there is any conflict between a statute and the subordinate legislation, it does not require elaborate reasoning to firmly state that the statute prevails over subordinate legislation and the bye-law if not in conformity with the statute in order to give effect to the statutory provision the rule or bye-law has to be ignored. The statutory provision has precedence and must be complied with\". Thus, as a principle, the subordinate legislation i.e. the Rules cannot be read so as to override the statute itself. 26. More so, in the present case, in view of the clear stipulations contained in Section 28(1)(b)(i) & (iv) of the Act, the assessing officer would remain fully competent and enabled to make an assessment of tax after examination of records, amongst others if either the dealer had not submitted the annexures of consolidated details or; revised annexures of consolidated details (of turnover and tax within time prescribed or extended) or; if such annexures of consolidated details contain wrong or incorrect particulars or; they do not accompany the declaration or; certificate for exemption or reduction in the rate of tax or; if the assessing officer is satisfied with the turnover of sale or purchase or both as the case may be and the amount of tax shown payable as 14 disclosed by the dealer in the annexures of consolidated details are not worthy of credence etc. Thus, in part, these conditions overlap with the provisions of Rule 45(13)(a) of the Rules, inasmuch as, that Rule also allows the assessing officer to examine whether the return is incomplete or incorrect or contains wrong particulars or net tax has not been paid or the return is not accompanied by required forms of declaration or certificate. 27. In that regard, it is equally well settled in law, in case of conflict being claimed between a principal statute and delegated legislation, effort should first be made to harmonize the two and the principal statute may be made to prevail over the delegated legislation only if conflict is irreconcilable. In Kailash v. Nanhku, (2005) 4 SCC 480, in the context of a conflict claimed between the provisions of Representation of Peoples Act, 1951 on one hand and the Allahabad High Rules framed under Article 225 of the Constitution of India read with the rules of procedure framed under the Civil Procedure Code, on the other, it was held in para 12 of that report - \"....... Suffice it to observe that in case of conflict, the provisions of the Act and the provisions of the High Court Rules shall, as far as may be, be harmoniously construed avoiding the conflict, if any, and if the conflict be irreconcilable the provisions contained in the Act being primary legislation shall prevail over the provisions contained in the High Court Rules framed in exercise of delegated power to legislate. No such conflict is noticeable, so far as the present case is concerned. 28. As a result, though the provisions of Section 28(1)(b)(i) and (iv) of the Act and Rule 45(13)(a) of the Rules, do over lap and in either case regular assessment after examination of records may be passed and further in either case that resort may be had upon a detection being made by the assessing officer that the return filed is incomplete or incorrect or contains wrong particulars, the immediate consequence arising upon such detection would be different, depending upon the time when such defect is noticed and/or acted upon by the assessing authority. 29. If that defect or deficiency is noted by the assessing 15 officer within the period prescribed under Section 27(2)(a) of the Act i.e. before commencement of last 15 days before the legal fiction (of deemed assessment) arises, the assessing officer shall first require the assessee to file a revised return to make necessary rectification. For that purpose, the asssessing authority must provide minimum 15 days time to the assessee to revise his return. In case, he files a revised return to the satisfaction of the assessing officer, the legal fiction of deemed assessment would arise. However, if despite time so granted, the assesee fails to file his revised return, he shall necessarily be visited with a regular assessment in terms of section 28 of the Act. 30. By virtue of section 28 of the Act, to which section 27 proceedings are \"subject to\", it does not mean - unless a valid notice under Rule 45 of the Rules is first issued and unless the assessee fails to file a revised return in response thereto, the assessing officer would be restrained or debarred from initiating proceedings under Section 28 of the Act. It only implies, by way of first consequence, that the legal fiction of deemed assessment may not arise in every case, by way of a necessary and automatic consequence of an annual return being filed. Even before end of two years from the end of the relevant assessment year the assessing authority would have a limited right to look into the final return to satisfy itself as to correctness and completeness of that return and to see whether net tax has been paid according to the provisions of the Act and the Rules and whether such return is accompanied by required Forms of declaration or certificate. 31. Second, if within the prescribed period of two years from the end of the relevant assessment year, the concerned assessing authority notices a simple defect in any annual return (as specified above), received by it, the same would not lead to an automatic assessment after examination of records (under section 28 of the Act). The assessing authority would first issue a notice to the assessee and grant him 15 days time to rectify the same. The 16 assessee may act on such notice and rectify the mistake pointed out. Then, a legal fiction or effect of self assessment would arise in favour of the assessee. 32. However, even in that situation there would not arise any assessment order. The entire exercise would remain in the realm of the Section 27 of the Act i.e. of deemed assessment. Thus, a limited intervention has been allowed to be made by the assessing officer, to protect the interest of the revenue to compel the assessee to pay correct taxes, without being subjected to full fledged assessment after examination of records. 33. If, an assessee fails to file a revised return in response to a valid notice issued under Rule 45(13)(a) of the Rules, then, by way of a mandatory consequence of its own conduct, such an assessee would invite assessment after examination of records under section 28 of the Act. That position is unambiguously clear from the language of Rule 45(13)(c) of the Rules. Thus no deemed assessment may arise in that case. 34. Also, there may arise cases, where no notice may have been issued by the assessing authority to the assessee to file a revised return or such notice, if issued was invalid, as in this case. Such eventualities would give rise to the legal fiction of deemed assessment at the end of the time period contemplated under section 27(2)(b) of the Act. However, it would remain \"subject to\" section 28 of the Act for reason of plain statutory intent expressed by use of words \"subject to\" used in opening part of section 27 as also for reason of larger period of limitation of three years provided under section 29(3) of the Act, for making an assessment under section 28 of the Act. 35. Therefore, the fate of such deemed assessment, if any, would be governed by proceedings undertaken under section 28 of the Act. In that case, the legal fiction of deemed assessment, would not operate as an embargo or restraint on the power of the assessing authority to proceed to assess the assessee after 17 examination of records. That power is found to exist, and may be exercised independent of section 27 of the Act. Hence, the fact that the assessing officer had not issued any earlier notice or had issued an invalid notice under Rule 45(13)(a) of the Rules, would be of no consequence. That notice and that time stipulation would remain relevant only for the purpose of a deemed/self-assessment. Initiation of those proceedings would not be mandatory pre- condition to be satisfied to initiate assessment upon examination of records. 36. The stipulation contained in Rule 45(13)(c) of the Rules, is only an exception when a deemed assessment order may not arise i.e. in case an assessee fails to respond to a valid notice issued under Rule 45(13)(a) of the Rules, he would necessarily be visited with a regular assessment proceeding. However, that interpretation does not obstruct the exercise of powers that are found to be otherwise existing with the assessing officer under Section 28 of the Act. 37. Since the self/deemed assessment under section 27 of the Act is a legal fiction, it comes into existence and survives only for the limited purposes for which it is created i.e. for raising a demand of admitted tax and claim of ITC. Even on its own, it always remains subject to an assessment made upon examination of records, under section 28 of the Act. That is the clear intent and effect of the opening words - \"Subject to provisions of section 28\", used in section 27 of the Act. Thus, even otherwise that legal fiction remains subservient to and gets subsumed in the proceedings for regular assessment whenever those proceedings get initiated on the basis of examination of records. Hence, the legal fiction, never added a fetter to the otherwise existing powers of an assessing authority to pass an assessment order upon examination of records. 38. Thus, in absence of Rule 45(13)(c) of the Rules being complied, the validity of assessment proceedings initiated under 18 section 28 of the Act must be tested on its own strength i.e. the test of section 28(1)(a) and (b) (i) to (v) of the Act. Seen in that light, the initial notice issued by the assessing officer dated 19.03.2017 is found to be invalid, inasmuch as, the same had been issued without allowing the assessee the mandatory minimum 15 days time period to file its revised return. That time limit was for the benefit of the assessee. Had it filed the revised return within the reduced time, the same would have been a valid revised return and the ground of invalidity in the notice would have stood waived. However, that was not done. 39. Perusal of the notice dated 27.02.2018 reveals it was a fresh notice issued under section 28 of the Act. At that stage, the assessing officer was not satisfied as to the completeness of the disclosure made by the assessee and in that regard, he had observed that the assessee had not complied with the notice issued under Rule 45(13) of the Rules. Even if that recital is considered to be relevant in view of the notice dated 19.03.2017 being found to be invalid, yet, it would not dilute the observation of the assessing officer or his satisfaction with the assessee's return being incomplete. That observation and that satisfaction reflect independent existence of the conditions mentioned under Section 28(1)(b)(i) and (iv) of the Act. Therefore, the assessment proceedings under Section 28 of the Act were validly initiated. 40. The further submission advanced by learned Senior Counsel, since “stipulated time” mentioned in clause (c) of sub-rule (13) of Rule 45 of the Rules was not available of 19.3.2017 therefore no notice could have been issued under Rule 45(13)(a) of the Rules and consequently the deemed assessment arising under section 27 of the Act could never be made \"subject to\" section 28 of the Act, is found to be untenable in view of the reasoning given above. Once the power to make an assessment upon examination of the records is found to be exercisable independent of section 27 of the Act, the argument advanced by 19 learned senior counsel does not survive. 41. Thus, in the first place, there never arose an order under Section 27 of the Act. Only a legal fiction of deemed assessment arose on 31.3.2017, for the limited purpose of creating a demand of admitted tax and entitlement of Input Tax Credit (ITC). No third purpose or inference arose. Then provisions of Section 28 of the Act being independent of Section 27 of the Act, upon the satisfaction of the assessing officer being found existing in terms of Section 28(1)(b) of the Act, that power could be exercised irrespective of the fact whether any proceedings had been conducted under Section 27 of the Act and irrespective of the fate of those proceedings. The initiation of proceedings under section 28 of the Act, vide notice dated 27.2.2018 did not suffer from any infirmity. 42. In view of the above, question of law no. 1 is answered thus: though a deemed assessment for A.Y. 2014-15 had come into existence on 31.03.2017, yet, it did not preclude the assessing officer to make an assessment upon examination of record under Section 28 of the Act, which order is found to have been passed in accordance with law, upon a valid notice dated 27.02.2018. 43. Insofar as question of law no.2 is concerned, though it is a tough case inasmuch as the assessment order was passed ex parte and none of the appeal authorities have considered the merits of assessment order, yet, this Court in exercise of its revision jurisdiction is constrained to answer the question in the affirmative i.e. against the assessee and in favour of the revenue in view of the fact that the assessee never raised such challenge on merits, before the appellate authorities. 44. Accordingly, the present revision is dismissed. No order as to costs. Order Date :- 2.8.2019 Abhilash/Shubham/Prakhar "