2006 (8) TMI 553 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether the assessing officer can rectify the rate of tax applied in the original assessment beyond the period of limitation provided under the Kerala General Sales Tax Act, 1963.
2. Whether the officer is free to modify the assessment enhancing the rate of tax beyond the time prescribed under the Act.
3. Whether the non-filing of objection by the petitioner confers jurisdiction on the officer to exercise powers beyond the period of limitation.

Analysis:

Issue 1: The assessing officer sought to rectify the rate of tax applied in the original assessment beyond the limitation period. The appellate order did not cover the rate of tax on industrial gases. The court held that under-assessment can be revised by the assessing authority under section 19(1) of the Act as escaped assessment, even if the assessment was subject to appeal. The officer can revise an assessment under section 19(1) on any issue not covered by the appeal decision. However, the revision of assessment on the rate of tax, done under section 19(1), was beyond the time limit provided under the Act. The court emphasized that any modification of assessment should strictly adhere to the powers conferred by the statute and be completed within the specified time limits.

Issue 2: The Special Government Pleader argued that once an assessment is revised in terms of the appellate order, the officer can correct mistakes in the original assessment order during such revision, with reference to section 17(8) of the Act. The court rejected this contention, stating that modifications on issues unrelated to the appeal should be done under statutory powers conferred under section 19(1) or section 43(1). The court highlighted that the appellate authority has the power to enhance assessments during an appeal or rectify orders through reference or by invoking suo motu powers.

Issue 3: The court addressed whether the non-filing of objections by the petitioner would confer jurisdiction on the officer to exercise powers beyond the limitation period. The court ruled that once the limitation period expires, the officer loses jurisdiction to revise the assessment. Therefore, even if the petitioner did not respond to the proposal, the officer could not revise the assessment beyond the time limit. The court allowed the revision, vacated the Tribunal's order, and canceled the revised assessment regarding the rate of tax on industrial gases.