Assessment under the Punjab VAT Act 2005 are made u/s 29. The assessment under Punjab VAT Act is made after the filing of the VAT 20 i.e annual return except in the case of Provisional Assessment. The assessment of Tax under section 29 of Punjab VAT Act 2005 can be done by two ways which can be discussed as follows:
Procedure for amendment in assessment : Rule 49 provides that before making an ammendment in assessment 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
1. Fraud – Where fraud has been committed with a view to evade or avoid the payment of tax, 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 under the provisions of sec. 26 [section 30(1)]
2. Willful neglect – When there is willful neglect with a view to evade or avoid the payment of tax, 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 under the provisions of section 26 [section 30(1)]
3. Due tax has not been paid - Non payment of due tax is the another reason for making the provisional assessment . 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 under the provisions of sec 26 [section 30(1)]
Assessment on the basis of return filed by the dealer: Assessment may be framed on the basis of the return or returns filed by the taxable persons u/s 29(1) . Where the return is filed under Sec.26 the assessing officer under Rule 43 scrutinizies the same and proceed to make assessment under Sec. 29(1) of the Act. Section 29(1) of Punjab VAT Act 2005 runs as under:
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.
Thus the assessment u/s 29(1) can be by and large called as assessment on the basis of self assessment of tax done by the dealer in the returns filed.
Scrutiny of returns Rule 43 is relevant to section 29(1) of Punjab VAT Act which provides for the procedure for scrutiny of every return filed u/s 26 for the purpose of section 29(1).
If on scrutiny of return it is found that a less tax has been paid than actually payable as per return, the notice is served upon the assessee to ractify the same and to pay the tax due along with interest u/s 32 and produce the treasury receipts before the designated officer within the time specified in the notice. If the assessee deposit the tax due and furnish the treasury receipts before designated officer complying with the notice under rule43(1) then the scrutiny of return is closed.
However an assessee can object to the notice issued under rule 43(1) in writting by stating the reasons for such objection and the designated officer if satisfied with the reasons, can decide accordingly or if not satisfied then the matter is reffered for audit u/s 28 of Punjab VAT Act.
Assessment on the basis of Information received: The Commissioner or the Designated officer has been vested with a power to frame assessment on his own motion or on the basis of information received by him to the best of his judgment .Section 29(2) provides that Notwithstanding anything contained in sub-section (1), the Commissioner or the designated officer, as the case may be, ,may on his own motion or non the basis of information received by him, order or make an assessment of the tax payable by a person to the best of his judgment and determine the tax payable by him, where-
a person fails to file a return under section 26 ; or
there are definite reasons to believe that a return filed by a person is not correct and complete; or
there are reasonable grounds to believe that a person is liable to pay tax, but has failed to pay the amount due; or
a person has availed input tax credit for which he is not eligible; or
provisional assessment is framed.
Section 29(3) further empowers commissioner either on his own motion or on the basis of information received by him, to direct the designated officer by an order in writting to make assessment of the tax payable by any person or any class of persons for such period as he may specify in his order.
Section 29(4) provides that the assessment u/s 29(2) and 29(3) may be made within three years after the date when the annual statement was filed or due to be filed, whichever is later. However the period of limitation u/s 29(4) can be enhanced by the commissioner under proviso to section 29(4) for assessment of a taxable person or a registered person, if circumstances so warrant by an order in writting after three years, but not later than six years from the date, when annual return was filed or due to be filed by such person, whichever is later.
Notice for assessment is must: For making assessment u/s 29 a prior notice must be served upon the assessee stating therein the the grounds for proposed assessment and the time place and manner for filing objections if any. The notice must also Provide the period for which assessment is to be made and provide a time of not less than 10 days for production of books documents etc as specified in the notice.
The purpose of issuing a notice and providing time in the notice of atleast 10 days is to provide a reasonable opprtunity of being heard to the assessee.
Reasonable opportunity of being heard must be provided: The assessee after being served with a proper notice for assessment, must be provided with fair and reasonable opprtunity of being heard before making the assessment.
The designated officer, after considering the objections and documentary evidence, if any, filed by the person, shall pass an order of assessment in writing, determining the tax liability of such a person. The assessment order must be a speaking one i.e it must state the reasons for assessment [Rule 48(2)]. The certified copy of order along with tax demand notice shall be provided to the assessee free of cost [Rule 48(3)].
Ammendment in assessment: 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,-
such a person has committed fraud or wilful neglect; or
such a person has misrepresented facts; or
a part of the turnover has escaped assessment:
Amendment in any assessment shall not be made without affording an opportunity of being heard to the affected person.
subject, however , to the following conditions, namely :-
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.
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.
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.
Ractification in the assessment order: Sub Section 8 of section 29 provides that 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.
Although the word provisional assessment has not been defined anywhere under the act. But the word provisional means the thing which is not final and can be made for any period, subject to the condition that the tax liability of such a person shall be assessed finally after he files return in the prescribed manner. The Provisional assessment can be made in the following cases only:
1. Fraud – Where fraud has been committed with a view to evade or avoid the payment of tax, 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 under the provisions of sec. 26 [section 30(1)]
2. Willful neglect – When there is willful neglect with a view to evade or avoid the payment of tax, 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 under the provisions of section 26 [section 30(1)]
3. Due tax has not been paid - Non payment of due tax is the another reason for making the provisional assessment . 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 under the provisions of sec 26 [section 30(1)]
4. Non filling of return – Where 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 t he under the provisions of section 26 [section 30(1)]
Time Limit for Provisional assessment: The Provisional assessment shall be made within a period of six months from the date of detection[section 30(2)]. The commissioner may for reasons to be recorded in writing, extend the said period by another six months in a particular case refered to him by the designated officer.[Section 30(3)].
Procedure for Provisional assessment like issuing of notice, reasonable opportunity of being heard etc is similar as is in the regular assessment and must be followed before making assessment.
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