1980 (8) TMI 184 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of service of notice for best judgment assessment after the expiry of the limitation period.
2. Justifiability of invoking section 11-A of the Act and raising objections regarding limitation.

Issue 1: Validity of Service of Notice for Best Judgment Assessment:
The Sales Tax Tribunal referred two questions of law regarding the validity of the notice served on the assessee after the limitation period for certain quarters. The Tribunal observed that the notice in form S.T. XIV was served on the assessee on 23rd December 1969, beyond the five-year limitation period for making the best judgment assessment. Citing the case of Madan Lal Arora v. Excise and Taxation Officer, the court held that the assessment proceedings for the first quarter ending on 30th June 1964 were time-barred. The court emphasized that the plea of limitation raised by the assessee was established based on admitted facts, leading to a favorable decision for the assessee on this issue.

Issue 2: Justifiability of Invoking Section 11-A and Raising Objections Regarding Limitation:
The second issue revolved around the justifiability of invoking section 11-A of the Act and raising objections regarding limitation. The Tribunal had dismissed the objection of limitation raised by the assessee, stating that it was not raised before the Assessing Authority or the Deputy Excise and Taxation Commissioner. However, the court held that the question of limitation is a mixed question of law and fact, and the assessee was entitled to raise it before the Sales Tax Tribunal for the first time. The court emphasized that a question of limitation goes to the root of the court's jurisdiction to determine the cause, and even if not raised earlier, it can be considered by appellate courts. Therefore, the court answered the second question in the negative, against the revenue and in favor of the assessee, directing the case to go back to the Tribunal for further proceedings.

In conclusion, the High Court of PUNJAB AND HARYANA ruled in favor of the assessee on both issues, highlighting the importance of adhering to the statutory limitation period for assessments and the right of the assessee to raise objections regarding limitation at any stage of the proceedings.