2008 (10) TMI 609 - HC - VAT and Sales Tax

Whether on the facts and circumstances of the case the impugned order (A-9) passed by the Tribunal in rectification proceedings on September 6 2007 was beyond the scope of rectification jurisdiction under section 21A(2) of the PGST Act 1948 and therefore without jurisdiction hence liable to be set aside? Whether the impugned order annexure A-9 is beyond the prescribed period of limitation of two years given in section 21A(2) of the Act and therefore without jurisdiction and hence liable to be quashed? Whether on the facts and circumstances of the case the learned Tribunal was bound to adjudicate all the issues raised in original appeal which were not decided by the Tribunal while passing the original order? Whether the order passed by the Assessing Authority is barred by limitation as prescribed under section 11(3) as amended by notification dated March 3 1998? Whether on the facts and circumstances of the case the original order of assessment was time-barred even under the unamended ection 11(4) of the PGST Act as no notice of best judgment assessment was ever given to the assessee before passing any order? Held that - In view of the settled legal position we are of the view that the assessment was not barred by limitation. In Murlidhar Mahabir Parshad 1967 (4) TMI 169 - SUPREME COURT OF INDIA the honourable Supreme Court held that if notice of assessment had already been given the assessment was to be treated to be within limitation. In the present case notice of assessment was prior to the enforcement of amending law. The order of the Tribunal dated July 8 2005 thus suffered from error apparent on the face of record which could be rectified.Accordingly question No. (i) is decided against the assessee and in favour of the Revenue. For Question No. (ii) as the order of rectification was passed on September 6 2007 while original order of the Tribunal was dated July 8 2005 and thus order of rectification was beyond limitation. In favour of assessee. If the order of the Tribunal holding the assessment to be barred by limitation was to be set aside the Tribunal was bound to adjudicate on all issues in the original appeal. However in view of our answer to question No. (ii) all the other questions has become academic.

Issues Involved:
1. Jurisdiction of the Tribunal in rectification proceedings.
2. Period of limitation for rectification.
3. Obligation of the Tribunal to adjudicate all issues in the original appeal.
4. Limitation period for the order passed by the Assessing Authority.
5. Time-barred status of the original order of assessment under the unamended section 11(4) of the PGST Act.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Tribunal in Rectification Proceedings:
The main contention was whether the Tribunal's order dated September 6, 2007, was beyond the scope of rectification jurisdiction under section 21A(2) of the PGST Act, 1948. The Tribunal had initially allowed the appeal on July 8, 2005, stating that the assessment was time-barred under the amended Act. However, the Revenue filed a rectification application arguing that the amendment was prospective and did not apply to the assessment in question. The Tribunal, in its rectification order, held that the amendment did not affect pending assessments for which notices had already been issued, thus the original order suffered from an error apparent on the face of the record. This view was supported by the judgment in Emkay Industries v. State of Punjab [2005] 139 STC 57. The court concluded that the Tribunal's rectification order was within the scope of rectification, as it corrected an error apparent on the record.

2. Period of Limitation for Rectification:
The assessee argued that the rectification order passed on September 6, 2007, was beyond the prescribed period of limitation. The original order of the Tribunal was dated July 8, 2005. The court agreed with the assessee, citing the judgment in State of Punjab v. P.O. Sales Tax Tribunal [2000] 119 STC 82, which established that rectification must be completed within the prescribed period. Consequently, the rectification order was quashed on the grounds of being time-barred.

3. Obligation of the Tribunal to Adjudicate All Issues in the Original Appeal:
The assessee contended that the Tribunal was bound to adjudicate all issues raised in the original appeal, which were not decided while passing the original order. The court noted that if the Tribunal's order holding the assessment to be barred by limitation was set aside, it would be necessary for the Tribunal to adjudicate all issues. However, given the finding on the limitation period for rectification, this question became academic and did not require further adjudication.

4. Limitation Period for the Order Passed by the Assessing Authority:
The assessee argued that the order passed by the Assessing Authority was barred by the limitation period prescribed under section 11(3), as amended by notification dated March 3, 1998. The court observed that the amendment was prospective and did not affect earlier assessment years where no time-limit was laid down. The Assessing Authority had issued a notice on October 24, 1997, and made the assessment on April 29, 2004. The court held that the assessment was not barred by limitation, as the amendment did not retrospectively apply to pending assessments.

5. Time-barred Status of the Original Order of Assessment:
The assessee claimed that the original order of assessment was time-barred under the unamended section 11(4) of the PGST Act, as no notice of best judgment assessment was given. The court referred to the statutory provisions before and after the amendment and concluded that the assessment was not time-barred. The notice for assessment had been issued within the applicable limitation period, and the amendment did not extinguish the period of limitation available for pending assessments.

Conclusion:
The appeal was allowed, and the impugned order of the Tribunal dated September 6, 2007, was set aside. The court held that the Tribunal's rectification order was within jurisdiction but was quashed due to being time-barred. The assessment by the Assessing Authority was not barred by limitation, and the Tribunal was required to adjudicate all issues in the original appeal if the rectification order was set aside.

← Previous Next →