2003 (3) TMI 689 - HC - VAT and Sales Tax

Summary

Issues:
Assessment completion within a reasonable time, Barred assessment due to delay, Application of statutory provisions for limitation extension.

Analysis:
The High Court of Kerala addressed two cases where the State was the revision petitioner, and the respondent-assessee was the same for the assessment years 1978-79 and 1979-80. The assessing authority completed the assessment ex parte on October 18, 1997, for both years, and these orders were confirmed in appeal. However, the Tribunal held that the assessments for both years were barred by limitation, leading to the State filing revisions.

The Court noted that the assessment must be completed within a reasonable time, as per the decision in Evergreen Fragrances v. State of Kerala. In this case, more than 18 to 19 years had passed since the assessment years, with no valid explanation provided for the delay in making the assessments. The Court emphasized that the period of more than five or six years could not be considered reasonable, especially when assessments were completed after such a significant delay.

Regarding the commencement of assessment proceedings, the Court clarified that the notice for production of accounts could not be equated to a notice calling for the filing of returns. Despite contentions by the Government Pleader regarding statutory provisions like section 17(6) and 17A of the Kerala General Sales Tax Act, the Court found these provisions inapplicable due to the assessments being barred beyond a reasonable time, even as of July 29, 1993, more than 12 years after the relevant assessment years.

Ultimately, the Court dismissed the tax revision cases, stating that when assessments are time-barred due to unreasonable delays, statutory provisions for limitation extension cannot be applied. The Tribunal's conclusion regarding the assessments being barred by limitation was upheld, and the petitions were dismissed.