# M/S Rohtash Sweets and Fast Foods, Meerut v. Commissioner Commercial Tax, U.P. Lucknow

- **Citation:** (2019) 1 ILRA 549
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-08-02
- **Bench:** Saumitra Dayal Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-rohtash-sweets-and-fast-foods-meerut-v-commissioner-commercial-tax-u-p-44523
- **Pages:** 15

## Headnote

A. Section 27 U.P. Value Added Tax Act,
2008 read with Rules 45(13)(a) and (b) -
Legal fiction - cannot be extended or
applied beyond the purpose for which it
is created. Deemed assessment in case
the original return is accepted in entirety
or a self-assessment, if a revised return
is accepted, arises only to provide for
payment of tax demand. No assessment
order comes into existence.

B. Power to make regular assessment
u/s 28 is exercisable independent of
Secttion 27. Rule 45(13)(c) does not and
cannot override or restrict the plain
applicability of the provisions of Section
28(1)(a). Subordinate legislation i.e. the
Rules cannot be read so as to override
the statute itself. Rule 45(13)(c) does
not and cannot override or restrict the
plain applicability of the provisions of
S.28(1)(a) and (b) i.e. the principal
legislation. (Para 25)

Assessment u/s 28 has been confirmed in first
appeal as well as by Tribunal. According to
assessee an assessment on deemed basis had
arisen on 31.03.2017, in absence of any prior
notice so as to allow him 15 days' time to
submit his revised return in terms of Rule
45(13)(a), therefore, assessing authority had
no
jurisdiction
for
assessment
u/s

## Text

_Characters 0–39,991 of 49,830. This is a partial read: ask again with offset=39991 for what follows._

1 All. M/s Rohtas Sweets and Fast Foods, Meerut Vs. The Commissioner Commercial Tax, U.P. Lucknow 549
introduction of rule of limitation (by
amendment) would not be clarificatory
but amendatory, the present writ petition
deserves to be allowed. The decision of
the Bombay High Court in Everest
Flavours Ltd. (supra) is found to be
distinguished in view of the reasoning
given above. Thus, I find myself bound
by the view taken by the division bench of
this Court in Ram Swarup Electricals
Ltd. (supra) and in agreement with the
view taken by the Madras High Court in
Dorcas Market Makers Pvt. Ltd.
(supra) as well as the Punjab &
Haryana High Court in JSL Lifestyle
Ltd.(supra).

41. Accordingly, the present writ
petition is allowed. The matter is remitted
to the original authority to pass necessary
order within a period of three months
from today.
--------
REVISIONAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 02.08.2019

BEFORE
THE HON'BLE SAUMITRA DAYAL SINGH, J.

COMMERCIAL TAX REVISION No..255 of 2018

M/S Rohtash Sweets and Fast Foods,
Meerut ...Petitioner
Versus
Commissioner
Commercial
Tax,
U.P.
Lucknow ...Respondents

Counsel for the Petitioner:
Sri Suyash Agarwal, Sri Rakesh Ranjan
Agarwal.

Counsel for the Respondents:
C.S.C..

A. Section 27 U.P. Value Added Tax Act,
2008 read with Rules 45(13)(a) and (b) -
Legal fiction - cannot be extended or
applied beyond the purpose for which it
is created. Deemed assessment in case
the original return is accepted in entirety
or a self-assessment, if a revised return
is accepted, arises only to provide for
payment of tax demand. No assessment
order comes into existence.

B. Power to make regular assessment
u/s 28 is exercisable independent of
Secttion 27. Rule 45(13)(c) does not and
cannot override or restrict the plain
applicability of the provisions of Section
28(1)(a). Subordinate legislation i.e. the
Rules cannot be read so as to override
the statute itself. Rule 45(13)(c) does
not and cannot override or restrict the
plain applicability of the provisions of
S.28(1)(a) and (b) i.e. the principal
legislation. (Para 25)

Assessment u/s 28 has been confirmed in first
appeal as well as by Tribunal. According to
assessee an assessment on deemed basis had
arisen on 31.03.2017, in absence of any prior
notice so as to allow him 15 days' time to
submit his revised return in terms of Rule
45(13)(a), therefore, assessing authority had
no
jurisdiction
for
assessment
u/s
28.
Dismissing the present revision, the High Court

C. The limitation of two years provided
u/s 29(3) is referable only to an order of
assessment made after examination of
records u/s 28 or an order of assessment
on turnover that may have escaped
assessment
u/s
29.
The
period
of
limitation therefore remained unaffected
by proceedings u/s 27. (Para 22)

D. Notice u/s 27 issued within 15 days
before
legal
fiction
of
deemed
assessment arose. Notice was invalid.
S.27 would remain "subject to" the
provisions
of
Section
28.
Regular
assessment to follow (Para 30, 34, 35, 37)

Precedent followed: -
1. Commissioner of Customs and Central
Excise Vs. Hongo India (P) Ltd. and Another,
(2009) 315 ITR 449 (SC) (Para 9, 23)
550 INDIAN LAW REPORTS ALLAHABAD SERIES
2. Commissioner of Income-tax, Kanpur Vs.
Mohd. Farooq, (2009) 317 ITR 305 (Para 9,
23)

3. Babaji Kondaji Garad Vs. Nasik Merchants
Coop. Bank Ltd., (1984) 2 SCC 50 (Para 25)
Kailash Vs. Nankhu, (2005) 4 SCC 480 (Para
27)

4. The Commissioner, Commercial Tax U.P.
Vs. S/S Purwar Trading Co., Sales/Trade Tax
Revision No. 232 of 2019, decided on
24.07.2019 (Para 12, 18)

5. M/s Sheo Prasad Vinod Kumar, Jhansi Vs.
Union of India& Others, 2001 U.P.T.C. 329
(Para 9)

6. Singh Enterprises Vs. Commissioner of
Central Excise, Jamshedpur& Others, (2008)
3 SCC 70 (Para 9)
Revision against order dated 14.08. 2018
by CCT, Meerut for AY 2014-2015 (E-4)

(Delivered by 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
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
1 All. M/s Rohtas Sweets and Fast Foods, Meerut Vs. The Commissioner Commercial Tax, U.P. Lucknow 551
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
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 the last date of filing of return
552 INDIAN LAW REPORTS ALLAHABAD SERIES
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, 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
1 All. M/s Rohtas Sweets and Fast Foods, Meerut Vs. The Commissioner Commercial Tax, U.P. Lucknow 553
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
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
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-
554 INDIAN LAW REPORTS ALLAHABAD SERIES

(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
1 All. M/s Rohtas Sweets and Fast Foods, Meerut Vs. The Commissioner Commercial Tax, U.P. Lucknow 555
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 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
556 INDIAN LAW REPORTS ALLAHABAD SERIES
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.

(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
1 All. M/s Rohtas Sweets and Fast Foods, Meerut Vs. The Commissioner Commercial Tax, U.P. Lucknow 557
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 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 TravancoreCochin & 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 reassessment 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
558 INDIAN LAW REPORTS ALLAHABAD SERIES
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 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 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.
1 All. M/s Rohtas Sweets and Fast Foods, Meerut Vs. The Commissioner Commercial Tax, U.P. Lucknow 559
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 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
560 INDIAN LAW REPORTS ALLAHABAD SERIES
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 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 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
1 All. M/s Rohtas Sweets and Fast Foods, Meerut Vs. The Commissioner Commercial Tax, U.P. Lucknow 561
necessarily be visited with a regular
assessment in terms of section 28 of the
Act.

30.