1995 (4) TMI 270 - HC - VAT and Sales Tax

Summary

Issues:
1. Calculation of limitation period for exercising power under section 14(4) of the Andhra Pradesh General Sales Tax Act.
2. Determination of the correct date from which the limitation period should start for assessing escaped turnover.
3. Interpretation of the provisions of section 14(4) and 14(4-A) of the Act.
4. Assessment of turnover that has escaped taxation and the authority's power to levy penalty.

Detailed Analysis:
The High Court of Andhra Pradesh heard a case where the State challenged an order by the Sales Tax Appellate Tribunal regarding the assessment of sales tax on a registered dealer for the year 1977-78. The Tribunal partially allowed the appeal, leading to the current challenge. The main issue revolved around the limitation period for exercising the power under section 14(4) of the Act. The Government Pleader argued that the limitation should be counted from the last order of assessment in 1983, while the respondent contended it should start from the original order in 1978. The key question was whether the Deputy Commissioner's order in 1985 was barred by limitation.

Section 14(4) of the Act empowers the assessing authority to assess escaped turnover, under-assessed amounts, or levy fees that were not correctly imposed. The authority can also order the payment of penalties. This power extends to higher authorities like the Deputy Commissioner under section 14(4-C). The critical issue was whether the exercise of this power fell within the prescribed limitation period. Section 14(4-A) mandates that assessments under section 14(4) must be made within four years from the date of service of the assessment order. In this case, the first order was served in 1978, and a subsequent order was served in 1983 after a remand. The Court analyzed from which date the limitation period should commence, considering the original order and the one after remand.

The Court determined that the limitation period should start from the date of the original assessment order in 1978, as the escaped turnover was not part of the subsequent order post-remand. While the Deputy Commissioner could have acted on the original order even after the remand, it had to be within the limitation period. Since the reasons for assessing the escaped turnover were not evident in the post-remand order, the limitation could not be calculated from that date. Consequently, the Court found no merit in the challenge and dismissed the petition without costs.

In conclusion, the judgment clarified the interpretation of sections 14(4) and 14(4-A) of the Act concerning the assessment of escaped turnover and the limitation period for such assessments. It emphasized that the power to assess and levy penalties under section 14(4) is subject to a four-year limitation period from the date of the original assessment order, even if subsequent orders are passed after a remand.