Dismissed¶28

Rsd Natural Resources Pvt. Ltd. v. The Union of India

Patna HC28 Aug 2024CWJC/3255/2022

Case brief

AI extract

What is this about?

Summary assessment; Section 64 BGST Act / BGST Tax, 2017; previous permission of Additional Commissioner or Joint Commissioner; Special Commissioner approval; satisfaction of Assessing Officer; no pre-decisional hearing required; demand notices and attendance recorded; challenge to lie in appropriate proceedings subject to statutory limitation; Article 226 writ jurisdiction declined; writ petition dismissed; CWJC No.17463 of 2021; Patna High Court; K. Vinod Chandran, CJ; Partha Sarthy, J; M/s. RSD Natural Resources Pvt. Ltd.; State of Bihar; commercial tax investigation.

What did the court decide?

The required previous permission was shown to exist: the State's counter affidavit (page 51) indicated that the permission for the summary assessment had been granted. ¶17

Rsd Natural Resources Pvt. Ltd. Vs The Union of India — Writ and Judicial Review | Patna HC (2024)

What the court decided

AI extract

Outcome

Dismissed

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Issue for consideration

Whether the summary assessment under Section 64 was validly proceeded with, i.e., whether the required previous permission of the Additional Commissioner or Joint Commissioner had been obtained before the summary assessment. +2 more

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Court's answer

The required previous permission was shown to exist: the State's counter affidavit (page 51) indicated that the permission for the summary assessment had been granted.

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Ratio / Principle

On the basis of the Assessing Officer's submission recording the grounds for summary assessment, the Special Commissioner ordered that the summary assessment proceeding stands approved.

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Key takeaways

The satisfaction required under Section 64 is that of the Assessing Officer and not of the Joint Commissioner; the Assessing Officer placed before the Additional Commissioner, the approving authority, the facts including the necessity for proceeding on summary assessment.ratio¶23
There was no requirement of a hearing to the petitioners at the stage of approval of summary assessment, since the hearing is to be afforded by the Assessing Officer on the summary assessment.ratio¶23
The petitioners were aware of the summary assessment, demand notices having been issued and attendance of the assessee having been recorded before the Assessing Officer.

Detailed headnote1 paragraphs

Patna High Court (K. Vinod Chandran, CJ; Partha Sarthy, J) dismissed a writ petition under Article 226 challenging a summary assessment under Section 64 (approval stage) of the BGST Act/Tax, 2017. Held: (i) the previous permission requirement stood satisfied — the Additional Commissioner of State Tax-cum-Assessing Authority recommended summary assessment on 3.3.2020 after inspection showed the business was not existing, the establishment was alleged to exist only on paper, the assessee had not replied despite opportunities, and there was a possibility of the assessee running away; on that submission the Special Commissioner approved the summary assessment proceeding, and the State's counter affidavit (p.51) indicated permission granted; (ii) the satisfaction under Section 64 is that of the Assessing Officer, who placed the requisite facts before the approving authority; (iii) no hearing to the petitioners was required at the approval stage, hearing being for the Assessing Officer; (iv) the petitioners had notice of the summary assessment, demand notices having been issued and attendance recorded; (v) the Section 64 order was to be challenged in appropriate proceedings, subject only to limitation available in the statute; no ground existed to invoke Article 226 and the writ petition was dismissed.

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IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.17463 of 2021

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M/s. RSD Natural Resources Pvt. Ltd. a company incorporated under the Companies Act, 1956, as amended, having their head office at 25, Mullick Street, Kolkata - 700007 and registered office at 403 A, 4th Floor, Kausalya Estate, Duckbunglow Crossing, Patna - 800001.

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Sri Rahul Jhajharia S/O Sri Director of M/s. RSD Natural Resources Pvt. Ltd., at 25 Mullick Street, P.S.- Bada Bazar, District- Kolkata (West Bengal)- 700007.

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... ... Petitioner/s

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Versus

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The State of Bihar through the Secretary, Ministry of Finance, Government of Bihar, Patna.

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Special Commissioner of State Tax, Commercial Tax, Central IB, Ground Floor, Annexy- 3 Old Secretariat, Bihar, Patna.

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Joint Commissioner of State Tax, Central Investigation Bureau, Central IB, Ground Floor, Annexy- 3 Old Secretariat, Bihar, Patna.

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... ... Respondent/s

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====================================================== Appearance : For the Petitioner/s : Mr. Ranjan Kumar Sinha, Advocate Mr. Rajnish Kumar, Advocate Ms. Kalawati, Advocate For the Respondent/s : Mr. Vikash Kumar, SC 11 Mr. Anshuman Singh, CGC Mr. Sanjeet Kumar Singh, AC to AAG 6 ======================================================

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CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE PARTHA SARTHY ORAL ORDER

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(Per: HONOURABLE THE CHIEF JUSTICE)

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20 28-08-2024 The petitioners have challenged the order under Section 64 on the ground that no previous permission of the Additional Commissioner or Joint Commissioner has been obtained for the summary assessment as provided under Section 64.

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The learned counsel for the respondent-State has

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Patna High Court CWJC No.17463 of 2021(20) dt.28-08-2024 2/4

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filed a counter affidavit wherein page 51 indicates the permission granted.

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On 3.3.2020 the Additional Commissioner of State Tax-cum-Assessing Authority had submitted a recommendation specifically pointing out that when inspection was conducted in the business premises, the business was not existing. There was an allegation raised that the establishment of the company is only on paper and despite ample opportunities given, the assessee had not replied. The Assessing Officer also pointed out that there is a possibility of the assessee running away, in which circumstances there is a requirement of summary assessment under Section 64 of the BGST Tax, 2017. The data sheet of proceeding taken by the Assessing Officer in which notices were issued and hearing was carried out is also produced in tabular form in paragraph 10 of the counter affidavit filed by the State. On the basis of the submission made by the Assessing Officer the Special Commissioner has ordered that the proceeding of summary assessment is approved.

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Learned counsel for the petitioners submits that there is no application of mind since it is a one line order and cryptic by its very nature.

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Section 64 of the BGST Act indicates that the

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Patna High Court CWJC No.17463 of 2021(20) dt.28-08-2024 3/4

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Proper Officer, on any evidence showing tax liability of a person coming to his notice has to proceed for provisional assessment in the interests of revenue, if he has sufficient grounds to believe that any delay in doing so may adversely affect the interests of revenue: with the previous permission of Additional Commissioner or Joint Commissioner.

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The satisfaction is of the Assessing Officer and not of the Joint Commissioner. The Assessing Officer has placed before the Additional Commissioner; the approving authority, the facts which includes the necessity for proceeding on summary assessment. There is also no requirement for hearing to be afforded to the petitioners since the approval is only of summary assessment on which the hearing has to be granted by the Assessing Officer. We see that the Assessing Authority after 3.3.2020 and after approval has passed the summary assessment on 23.3.2020. The petitioners were also aware of the summary assessment since demand notices were issued and there was also attendance recorded of the assessee before the Assessing Officer.

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In the aforesaid circumstances we are of the opinion that the order under Section 64 had to be challenged in appropriate proceeding; with just exception of limitation as

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Patna High Court CWJC No.17463 of 2021(20) dt.28-08-2024 4/4

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available in the statute.

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