2011 (7) TMI 1075 - HC - VAT and Sales Tax

Whether the learned Tribunal has erred in law in holding that the revisional proceedings which were initiated within 2 years from the assessment order dated April 9, 2007 and concluded within three years from the said assessment order, was time-barred? Held that - According to section 11(3) of the PGST Act, the assessing authority is required to pass an assessment order within a period of three years from the last date prescribed for furnishing the last return in respect of any period. In the facts of the present case the last date for filing of return for the assessment year 2001-02 was April 30, 2002 and the assessment could be framed up to April 30, 2005. It is not disputed that the assessing authority framed the assessment on April 9, 2007 which was beyond the period of limitation. Once that was so, the assessment order was void and without jurisdiction. The recourse to revisional proceedings by the Excise and Taxation Commissioner after the expiry of more than five years which were initiated on September 8, 2008 was, thus, bad. The decision of the Tribunal is in consonance with the provisions of the statute. The learned counsel for the petitioners was unable to pin point any error or perversity in the order impugned herein which may warrant interference by this court. No substantial question of law arises in these revisions, hence dismissed.

Summary

Issues:
1. Interpretation of time limitation under section 11(3) of the PGST Act for passing assessment orders.
2. Validity of revisional proceedings initiated beyond the prescribed time limit.
3. Applicability of reduced CST rate on sales made to Government Departments against D forms.

Analysis:
1. The judgment dealt with the interpretation of time limitation under section 11(3) of the PGST Act for passing assessment orders. The assessing authority framed the assessment on April 9, 2007, which was beyond the prescribed period of three years from the last date for filing the return for the assessment year 2001-02. The court held that since the assessment order was passed beyond the limitation period, it was void and without jurisdiction. The revisional proceedings initiated by the Excise and Taxation Commissioner after more than five years were deemed invalid. The Tribunal's decision aligning with the statutory provisions was upheld.

2. The validity of the revisional proceedings initiated beyond the prescribed time limit was a crucial issue in the judgment. The Tribunal set aside the revised assessment order dated November 23, 2009, on the grounds that the original assessment order was time-barred. The court concurred with the Tribunal's decision, emphasizing that the initiation of revisional proceedings after the expiration of the limitation period was impermissible. The court highlighted that the assessment order must be passed within the statutory timeframe to maintain its validity and jurisdiction.

3. Another significant issue addressed in the judgment was the applicability of the reduced CST rate on sales made to Government Departments against D forms. The revisional authority had revised the assessment at the rate of four per cent instead of two per cent for sales made against D forms, citing that the reduced rate applied only to sales against form C. The court affirmed the revisional authority's decision, stating that the concessionary rate was not applicable to sales made against D forms. Therefore, the revised assessment order raising a demand of Rs. 2,46,338 was upheld.

In conclusion, the High Court dismissed the revision petitions, stating that no substantial question of law arose in the case. The judgment clarified the importance of adhering to statutory timelines for assessment orders and upheld the decisions made regarding the revisional proceedings and the applicability of reduced CST rates on specific sales transactions.