Tuesday, September 2, 2008


‘Power conferred’ and ‘power exercised’ are the two inherent and indispensable ingredients of administration of law. The power delegation and power exercise scenario are very much there in the Constitution of India (Constitution) and Laws of the land. Without this, the administration will be one man’s or one authority’s game. Our instant discussions mainly confined to the administration of the Value Added Tax Act of Assam (VAT Act), 2005.
The Supreme authority to exercise powers under the VAT Act is the Commissioner of Taxes, Assam (Commissioner). He is assisted by the taxing authorities, namely; the Additional Commissioners of Taxes, Joint Commissioners of Taxes, Deputy Commissioners of Taxes, Assistant Commissioners of Taxes, Superintendents of Taxes and the Inspectors of Taxes, appointed by the State Government, who can exercise the powers of the Commissioner by virtue of such powers delegated to them in accordance with the provisions of the Act subject to the conditions and restrictions, imposed by the rules prescribed by the Act
There has been some departure/ deviation from the main theme of the VAT Act and the power delegation and power exercise episode sometimes become controversial. A discussion will bring out the points of controversy.
(i) Rule 6 of the VAT Rules specified a table providing way and scope for delegation of powers by the Commissioner to the taxing authorities, appointed to assist him. In the said table, the taxing authority, namely; the Assistant Commissioner of Taxes did not figure at all. While delegating powers by the Commissioner, the Assistant Commissioners of Taxes were accommodated in the power exercise scenario, which seems to be direct clash with the provisions of rule 6, as aforesaid. Though this acute irregularity persists since 1st May, 2005, the State Government did not think it proper to make modification of the same during these long three years’ and four months’ period.
(ii) Rule 6 provided that power of scrutiny of returns (Section 33), Provisional assessment (Section 34), Self assessment (Section 35), Audit assessment (Section 36), Best judgment assessment (Section 37), Assessment in case of the un-registered dealers (Section 38), Assessment of turnover escaping assessment (Section 39), Power to re-assessment in certain cases (Section 41) etc. are to be delegated to the Superintendent of Taxes.
(iii) The Superintendent, as defined in VAT Rules means the Superintendent of Taxes appointed by the Government by that designation within whose jurisdiction the dealer’s place of business is situated or if the dealer has more than one place of business, the Superintendent of Taxes in whose jurisdiction, the principal place of business is located or if the dealer has no place of business, the Superintendent of Taxes, who has been so notified by the Commissioner.
(iv) It aptly implies that there should be one Superintendent of Taxes in respect of a dealer in a particular area where his place of business or the principle place of business is situated.
(v) Contrary to this spirit of law, the Commissioner by notifications dated 28th April, 2005 delegated his powers to the taxing authorities before coming into force of the VAT Act, which did not maintain the rational and judicious approaches
(vi) The Commissioner delegated his power of self- assessment (Section 35) to the Superintendent of Taxes of the area and not the other assessment powers.
(vii) The powers of provisional assessment and escaped assessment (section 34 and 40) were delegated to the Superintendents of Taxes, attached to the Commissioner, who it seems were not appointed as a the taxing authority by the Government to make a base in tax administration.
(viii) The power of audit assessment was delegated to the Audit team, constituted by the Commissioner, which in fact, does not have any locus- standi in the VAT Act.
(ix) Thus it is evident that :
(a) the power of provisional assessment, best judgment assessment, escaped assessment, those are being exercised by the unit Superintendents of Taxes seem to be without any delegation of powers
(b) the ‘Audit Team’, though not enunciated in the Act, is nothing but some sorts of investigation wing, while the ‘Audit Assessment’ is quasi-judicial function, which can not be mingled together in view of the doctrine of separation of power, as laid down in Article 50 of the Constitution.
(c) Similarly, the quasi-judicial power conferred to the Superintendents of Taxes, attached to the tax Commissionerate seems to be a matter of controversy,

(x) The Superintendents of Taxes of the area have not been delegated with the
powers of Registration (Section 21, 22,23 etc.) and thus the registration
proceedings, security demand proceedings etc. are being exercised without
any delegation of powers, which are naturally counted as the matter of controversy
(xi) Rule 6 restricted the delegation of power to compound offences to the
Superintendents of Taxes only, but the Commissioner delegated such powers of Compounding of offences to the Additional Commissioner, Joint Commissioner, Deputy and Assistant Commissioners of Taxes, ignoring the restrictions.

. The General Sales Tax Law in Assam came into operative since December 24th, 1947. The power delegation exercise was methodical, rational and judicious. This long tradition had an erosion since the last part of the twentieth century and it took a diametrically opposite turn in the VAT Law in Assam causing some serious set backs and anomalies in the tax administration forum.
The matter s were discussed in a number of times through the media, but was of no avail.

( Mrinal Kanti Chakrabartty)
“Rudra Bhawan”
R.G.Barua Road,10-Lakhimipath

No comments: