M/S Shailendra Eat Udyog vs. State Of U.P. And 3 Others

Held

The Court held that the order dated 10.06.2018 suffered from an inherent defect. It was passed without verifying whether the 'proper officer' had reached any satisfaction regarding the admissibility of the petitioner to the benefit of the compounding scheme. The Court noted that the petitioner had admittedly filed the compounding application within time and deposited the necessary compounding fee. If these facts were correct, it was difficult to accept that the assessee could be taxed under regular assessment proceedings. The Court found it may not have been necessary for the assessing officer to examine the admissibility of the compounding scheme themselves, as this was the role of the 'proper officer'. Consequently, the order dated 10.06.2018 was set aside. The matter was remitted to the assessing authority to pass a fresh order of assessment after verifying the fate of the compounding application for January 2018. The Court directed that this exercise be completed expeditiously, preferably within six months.

Facts

The petitioner, M/s Shailendra Eat Udyog, filed a writ petition challenging an order dated 10.06.2018 passed by the Assistant Commissioner Commercial Tax, Sector-6, Mathura. This order assessed the petitioner to tax for January 2018 under Section 64 of the U.P. GST Act, 2018. The petitioner's first appeal against this assessment was dismissed as time-barred. The petitioner contended that they had filed an application for compounding well within time and complied with its terms. A supplementary counter affidavit filed by the State confirmed that for the period October 2017 to March 2018, the assessee had filed an application for compounding and paid the compounding fee. The impugned assessment order did not reflect any discussion of these facts.

Key Issues

1. Whether the assessment of tax liability for January 2018 should have been made under the compounded method, as contended by the petitioner, given their timely application and compliance with compounding terms, or under regular assessment proceedings as ordered by the Assistant Commissioner? The petitioner argued that by operation of law, once a valid compounding application was filed and complied with, the tax liability must be determined under the compounded method, not regular assessment. The revenue's contention, as evidenced by the supplementary counter affidavit, was that the petitioner had indeed filed an application for compounding and paid the fee for the relevant period. However, the impugned order failed to address this fact or the admissibility of the compounding application by the 'proper officer'.