Assessment

As per the Scheme of Punjab Value Added Tax Act, 2005 Section 29(1) deals with self assessment beside this Section 29(2) read with Section 29(4) deals with best judgment assessment and in Section 29(3) Commissioner by an order in writing direct the Designated Officer to make an assessment. Here it is pertinent to point out that assessment U/s 29(2) and 29(3) should be framed within a period of 3 years after the date when annual statement was filed or due to be filed provided under special circumstances the commissioner can extend time for framing an assessment after 3 years but not later than 6 years. That the Hon’ble VAT Tribunal while deciding the case of M/s Babaji Rice Mills Vs. State of Punjab has accepted the appeal of the appellant on the solitary ground of limitation as in the present case assessment was framed after a period of 3 years.

         Section 29(7) read with Rule 49 deals with amendment of assessment by the Designated Officer within a period of 3 years from the date of assessment order after obtaining the prior permission of the commissioner.

         Section 29(8) deals with rectification of assessment in the cases where there is a mistake apparent from the record. Rectification can be made within a period of one year from the date of assessment order.

Section 29.  (1) Where a return has been filed under sub section (1) or sub-section (2) of section 26 or in response to a notice under sub section (6) of section 26, if any tax or interest is found due on the basis of such return, after adjustment of any tax paid on self-assessment and any amount paid otherwise by way of tax or interest, then, without prejudice to the provisions of sub-section (2), an intimation shall be sent to the person specifying the sum so payable, and such intimation shall be deemed to be a notice of demand issued under sub-section (11) and all the provisions of this Act shall apply accordingly :

Provided that except as otherwise provided in this sub-section, the acknowledgment of the return shall be deemed to be an intimation under this sub-section in case, either no sum is payable by the person or no refund is due to him:

           Provided further that no intimation under this sub-section shall be sent after the expiry of one year from the end of financial year in which the return is filed.

(2)     Notwithstanding anything contained in sub-section (1), the Commissioner or the designated officer, as the case may be, may, on his own motion or on the basis of information received by him, order or make an assessment of the tax, payable by a person to the best of his judgement and determine the tax payable by him, where, -

(a)      a person fails to file a return under section 26 ; or

(b)      there are definite reasons to believe that a return filed by a person is not correct and complete; or

(c)      there are reasonable grounds to believe that a person is liable to pay tax, but has failed to pay the amount due; or

(d)      a person has availed input tax credit for which he is not eligible; or

(e)      provisional assessment is framed.

(3)       The Commissioner on his own motion or on the basis of information received by him may, by an order in writing, direct the designated officer to make an assessment of the amount of tax payable by any person or any class of persons for such period, as he may specify in his order.

(4)       An assessment under sub-section (2) or sub-section (3), may be made within three years after the date when the annual statement was filed or due to be filed, whichever is later:

Provided that where circumstances so warrant, the Commissioner may, by an order in writing, allow assessment of a taxable person or of a registered person after three years, but not later than six years from the date, when annual statement  was filed or due to be filed by such person, whichever is later. 

(5)       Where an assessment is to be made under this section, the designated officer shall, serve a notice to the person to be assessed and such notice shall state-

(a)         the grounds for  the proposed assessment; and

(b)         the time, place and manner  for filing objections, if any.

(6)       The designated officer, after taking into account all relevant material, which the officer has gathered, shall on the day specified in the notice issued under sub-section (5) or as soon afterwards as may be, after hearing such evidence, as the assessee may produce, by an order in writing, make an assessment determining the sum payable or refund of any sum due to him on the basis of such assessment.

(7)       The designated officer may, with the prior permission of the Commissioner, within a period of three years from the date of the assessment order, amend an assessment, made under sub-section (2) or sub-section (3), if he discovers under–assessment of tax, payable by a person for the reason that,-

(a)      such a person has committed fraud or wilful neglect; or

(b)      such a person has misrepresented facts; or

(c)      a part of the turnover has escaped assessment:

Provided that no order amending such assessment, shall be made without affording an opportunity of being heard to the affected person.

(8)       The designated officer may, within a period of one year from the date of the assessment order, rectify an assessment, made under sub-section (2) or sub-section (3), if he discovers that there is a mistake apparent from record:

Provided that no order rectifying such assessment shall be made without affording an opportunity of being heard to the affected person.

(9)       An assessment under sub-sections (7) and (8) shall be an assessment made under this Act for all intents and purposes.

(10)     No assessment or other proceedings purported to be made, or executed under this Act or the rules made thereunder, shall be, -

(a)         quashed or deemed to be void only for the reason that the same  were not in  the  prescribed form; or

(b)         affected by reason of a mistake, defect or omission therein:

Provided that such an assessment is substantially in conformity with this Act or according to the intent and meaning of this Act and the rules made thereunder.

(11)    When any tax, interest, penalty or any other sum is payable in consequence of any order passed under this Act, the designated officer shall serve upon the person a notice of demand in the prescribed form specifying the sum so payable.

Rule 47. Notice and manner of assessment .--(1)          For the purpose of assessment or provisional assessment of a person, a notice shall be issued , which shall clearly state the grounds for the proposed assessment, period of assessment, the date, time and place, fixed for such assessment. The notice shall provide a time period of not less than ten days for production of such accounts and documents as may be specified in the notice.

(2)     A person, who has been served a notice under sub-rule (1), shall produce on the specified date and time accounts and documents, as mentioned in the notice together with objection, if any, in writing, which the person may wish to prefer, alongwith the evidence, which he may, wish to produce in support thereof.

Rule 49. Amendment of assessment.--For the purpose of amendment of assessment under sub-section (7) of section 29, a notice shall be issued by the designated officer, to the person, clearly stating the grounds for the proposed amendment, the date, time and place ,fixed for such amended assessment. After hearing , the person  concerned  and making such enquiry, as the designated officer may consider necessary, he  may proceed to amend the orders as he deems fit subject, however , to the following conditions, namely :- (a)         No amendment, which has the effect of enhancing the amount of tax,  shall be made by the designated  officer,  unless he  has given notice to the person concerned of its intention to do so and has allowed him a reasonable opportunity of being heard. (b)         Where such amendment has the effect of enhancing the amount of the tax or penalty , the designated officer, shall serve on the person a Tax Demand Notice in Form VAT – 56 as required under sub-section (11) of section 29 and thereupon , the  provisions of the Act and these rules shall apply, as if such notice had been served in the first instance. (c)         Where any amendment made under sub-section (7) of section 29 has the effect of reducing the tax or penalty, the designated officer shall order refund of the amount, which may be due to the person and the procedure for refund laid down in rule 52 shall apply.

Provisional assessment. (Section 30)

Provisional assessment can be made even prior to the filing of annual statement where Designated Officer is of the view that fraud or will full neglect has been committed with a view to evade or avoid payment of tax or due tax has not been paid or return has not been filed. Here it is pertinent to point out that provisional assessment can be made within a period of 6 months from the date of detection but under certain circumstances the commissioner can extend the said period by another 6 months.

Section 30.  (1) Notwithstanding anything contained in section 29, where fraud or willful neglect has been committed with a view to evade or avoid the payment of tax or due tax has not been paid or a return has not been filed by or on behalf of a person, the designated officer may, for the reasons to be recorded in writing, make provisional assessment for any period to determine the tax liability so evaded, avoided or unpaid:

Provided that tax liability of such a person shall be assessed finally after he files his return in the prescribed manner.

(2)     The provisional assessment under sub-section (1) shall be made within a period of six months from the date of detection. The Commissioner may, however, for reasons to be recorded in writing, extend the said period by another six months in a particular case referred to him by the designated officer.