2009 (9) TMI 895 - HC - VAT and Sales Tax

Whether the impugned order has been passed beyond the period of limitation prescribed under section 11(3) of the Punjab General Sales Tax Act 1948? Held that - No doubt is left that the order dated April 16 2004 purported to have been passed under section 11(10) of the Act and rule 39C of the Rules flagrantly violates the principles of natural justice. Such an order cannot be regarded an order in the absence of its communication to the petitioner. Therefore the respondent cannot take any support from such an order and the impugned order dated March 31 2005 (P9) is set aside as it is beyond the period of three years prescribed by section 11(3) of the PGST Act. Petition allowed.

Issues Involved:
1. Limitation period for assessment under Section 11(3) of the Punjab General Sales Tax Act, 1948.
2. Extension of the limitation period under Section 11(10) of the Act.
3. Transfer of the assessment case under Rule 39C of the Punjab General Sales Tax Rules, 1949.
4. Violation of principles of natural justice.

Detailed Analysis:

1. Limitation Period for Assessment:
The petitioner, a sugar manufacturing unit, challenged the assessment order dated March 31, 2005, on the ground that it was passed beyond the period of limitation prescribed under Section 11(3) of the Punjab General Sales Tax Act, 1948. The last date for filing the return for the assessment year 2000-01 was April 30, 2001, and the assessment was required to be framed by April 30, 2004. The assessment was, however, framed on March 31, 2005, which was beyond the three-year limitation period.

2. Extension of Limitation Period:
The respondents argued that the assessment was framed within the extended period granted by the Excise and Taxation Commissioner under Section 11(10) of the Act. The Commissioner is empowered to extend the period of three years for passing the order of assessment for such further period as he may deem fit, provided reasons are recorded in writing. However, the petitioner contended that no such extension order was communicated to them, and no opportunity of hearing was given before granting the extension.

3. Transfer of Assessment Case:
The petitioner's case was transferred multiple times between different assessing authorities without any opportunity of hearing or reasons recorded, as required under Rule 39C of the Punjab General Sales Tax Rules, 1949. The case was transferred from Hoshiarpur to Patiala, then to Kapurthala, and finally back to Hoshiarpur. The petitioner argued that these transfers were made without following the due process.

4. Violation of Principles of Natural Justice:
The court emphasized that the principles of natural justice must be implied in statutes unless expressly excluded. The Commissioner, while extending the period under Section 11(10), did not afford an opportunity of hearing to the petitioner, which was a violation of natural justice. The court cited various judgments to support the necessity of following natural justice principles, even if the statute is silent on the matter.

Judgment:
The court held that the extension order dated April 16, 2004, passed by the Commissioner under Section 11(10), was invalid as it was not communicated to the petitioner and no opportunity of hearing was provided. The court also found that the transfers of the case violated Rule 39C of the Rules, as no reasons were recorded and no opportunity of hearing was given. Consequently, the assessment order dated March 31, 2005, was set aside as it was beyond the prescribed limitation period of three years under Section 11(3) of the Act. The writ petition was allowed, and the impugned order was quashed.

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