2007 (9) TMI 594 - HC - VAT and Sales Tax

Reassessment - proceedings challenged on the ground that the same are hit by the limitation provided under section 16 of the Tamil Nadu General Sales Tax Act, 1959 - Held that - In the circumstances of the case, going by the facts herein, the Tribunal correctly came to the conclusion that the order passed could not be sustained as one within the time-frame given under section 16. In these circumstances, on the dates given, which are not disputed by the petitioner herein, we do not find any justification to apply the limitation to the proceedings impugned. Hence, the writ petition is dismissed.

Summary

Issues:
1. Challenge to reassessment proceedings based on limitation under section 16 of the Tamil Nadu General Sales Tax Act, 1959.

Analysis:
The case involved a writ petition filed by the Revenue challenging the order of the Tamil Nadu Taxation Special Tribunal allowing the assessee's challenge to reassessment proceedings on the grounds of limitation under section 16 of the Tamil Nadu General Sales Tax Act, 1959. The assessment year in question was 1994-95, with the original assessment order passed on April 29, 1996. Subsequent to a Supreme Court decision on May 1, 1996, confirming the liability on the sale of REP licenses, a revised assessment order was passed on March 25, 1997, bringing the turnover on the sale of REP licenses to tax. Further reassessment notices were issued in 2001, leading to the impugned order dated March 20, 2002, which was challenged by the assessee on the grounds of being barred by limitation under section 16(2).

The Tribunal allowed the assessee's case, holding that the notice issued on January 18, 2001, was indeed barred by limitation. The Revenue contended that the benefit of section 16(4) should be applied to exclude the period of pendency of the writ petition from the calculation of limitation. However, the court noted that regardless of whether the proceedings fell under section 16 or 55, the notice clearly stated it was issued under section 16, only to be passed under section 55 later to bypass limitation. The court emphasized the dates relevant to the limitation plea, highlighting that the first reassessment order was passed after the Supreme Court decision, making the application of section 16(4) irrelevant to the second notice issued in 2001.

Considering the facts and timeline, the court upheld the Tribunal's decision, concluding that the impugned order could not be sustained within the time-frame given under section 16. Therefore, the writ petition was dismissed, with no order as to costs.