2011 (7) TMI 1032 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of the provisions of section 19(1) of the Kerala General Sales Tax Act in relation to assessments completed under section 17D.
2. Whether the regular assessing authority can revise assessments completed by the fast track assessment team under section 17D.

Analysis:
1. The petitioners, who are assessees under the Kerala General Sales Tax Act, challenged the regular assessing officer's attempt to invoke powers under section 19(1) of the Act to assess alleged escaped turnover after their assessment was completed by a fast track assessment team under section 17D. The petitioners argued that once an assessment is completed under section 17D, the normal channel of appeal is not available to them, and they can only challenge it before the Tribunal after paying the full tax assessed. The court noted that the Legislature devised a specific procedure under section 17D for certain assessments, leading to different consequences compared to normal assessments. The court held that assessments initiated under section 17D should be completed only under that section to avoid parallel proceedings and undue hardship to the assessees. Consequently, the court quashed the revised assessment made under section 19(1) by the regular assessing authority, emphasizing that any escaped turnover should also be assessed by the fast track assessment team under section 17D. The court highlighted the importance of finality to fast track assessments and directed the fast track team to address any escaped turnover in accordance with the law.

2. The learned Government Pleader opposed the petitioners' argument, contending that the completion of a 17D assessment does not prevent the regular assessing authority from invoking section 19(1) to assess escaped turnover with the Commissioner's permission. However, the court disagreed with this position, emphasizing the distinct procedures and consequences of assessments under section 17D compared to normal assessments. The court held that once proceedings are initiated under section 17D, assessments should be concluded under that section to prevent multiple appeal avenues and hardships for the assessees. As a result, the court quashed the impugned orders and clarified that the fast track assessment team should handle any escaped turnover under section 17D, ensuring compliance with the law. Ultimately, the writ petition was disposed of in favor of the petitioners, upholding the sanctity of the assessment process under section 17D and providing guidance for addressing escaped turnover within the established legal framework.