2026-VIL-1154-MEG
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VAT High Court Cases

Meghalaya VAT Act, 2003 - Scrutiny of returns under Section 39 of the Meghalaya VAT Act - The Petitioner, challenged the Scrutiny Reports and Notices for curing defects in returns issued under Section 39 for the period from 2007 to 2017, contending that no notice under Section 35 was issued - The Respondents relied on a notice calling for production of books of account issued in 2017 and alleged suppression of that notice by the Petitioner - Whether scrutiny under Section 39 can be validly initiated without notice under Section 35, and whether such notice can be issued to a registered dealer in view of Section 35(3) - HELD - The language of Section 39(1) is clear and unambiguous, it mandates scrutiny of returns furnished by a registered dealer to whom notice has been issued by the Commissioner under Section 35. This is not a mere procedural formality but a condition precedent that goes to the root of authority and jurisdiction to undertake scrutiny - The words "to whom notice has been issued" qualify the class of registered dealers whose returns can be scrutinised, and reading Section 39 as allowing scrutiny of every return irrespective of notice is a misreading - Where a statute prescribes a particular manner for doing an act, it must be done in that manner alone, and an authority cannot assume jurisdiction in a manner not authorised - Section 35(3) provides for notice only to dealers other than a registered dealer. A registered dealer is bound to file returns under Section 35(2) without notice. The only harmonious construction is that Section 39 applies to registered dealers who were previously unregistered and were brought under the tax net by notice under Section 35(3). It does not apply to a dealer who was always registered and filed returns without notice - The specific provision cannot be ignored or read down – Further, the notice calling for books of account was for assessment purposes and not a notice to furnish returns. Even if treated as such, it would be invalid as Section 35(3) does not authorise notice to registered dealers - The mandatory precondition of notice under Section 35 is not satisfied, and the Scrutiny Reports and Notices under Section 39 are set aside and quashed - The writ petition is disposed of - Applicability of limitation under Section 57 to scrutiny of returns under Section 39 of the Meghalaya VAT Act - Notices for curing defects in returns for the period from 2007 to 2017 were issued in 2023. The Petitioner contended that no assessment can be made after five years from the end of the tax period under Section 57 and that the scrutiny was barred by limitation - Whether the five-year limitation under Section 57 applies to scrutiny proceedings under Section 39 - HELD - The scheme of the Act providing the five-year period of limitation under Section 57 is also to be applied in respect of Section 39. Authorities cannot be allowed to circumvent the limitation provisions for completing assessment by recourse to the powers of summary adjustment under the scrutiny provision. The Respondents' argument based on specific provisions prevailing over general provisions supports the Petitioner - The scrutiny proceedings and notices issued in 2023 for the period from 2007 to 2017 are beyond limitation and are set aside - Delegation of power to exercise scrutiny under Section 39 of the Meghalaya VAT Act - The Petitioner challenged the competence of the Superintendent of Taxes to initiate scrutiny proceedings under Section 39, contending that the power was not delegated by notification. The Respondents contended that the Superintendent was delegated the power under the Act read with the Rules and relied on internal orders and circulars - Whether the Superintendent of Taxes had jurisdiction and authority to initiate proceedings under Section 39 - HELD - Section 26 of the Act read with Rule 3 of the Rules mandates that the Commissioner "shall" delegate powers by a notification in the Official Gazette. The Respondents did not place on record any notification published in the Official Gazette delegating Section 39 powers to the Superintendent of Taxes. Reliance on internal orders and circulars does not satisfy the statutory requirement - The delegation is not established, and the proceedings under Section 39 are set aside.
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