2011 (8) TMI 1042 - HC - VAT and Sales Tax

Time Limitation - Benefit of exemption from levy of tax - Works Contract - sub-contracting basis - section 20(2) of Andhra Pradesh General Sales Tax Act 1957 - Held that - The revisional order was required to be passed by November 4 2006 but was admittedly sent to the partners of the firm including the petitioner by registered post acknowledgement due on July 20 2007 beyond the period prescribed under section 20(3) of the Act. There is no explanation as to what steps were taken from August 31 2006 till July 20 2007 to communicate the revisional order to the petitioner. It must be presumed that the order was not passed on the date it is purported to have been passed but it was passed beyond the period of limitation prescribed under section 20(3) of the Act - the order cannot be sustained being barred by limitation - Petition allowed.

Summary

Issues:
1. Validity of revisional orders dated August 31, 2006, seeking recovery of tax.
2. Communication and service of the impugned order to the petitioner.
3. Barred by limitation under section 20(3) of the Act.

Analysis:
1. The petitioner challenged the revisional orders dated August 31, 2006, passed by the first respondent seeking recovery of tax. The firm, engaged in contract works, was dissolved and reconstituted, with the assessment of tax for the years 2001-02 granting exemption. The first respondent issued a show-cause notice proposing to deny the exemption, leading to the impugned order. The petitioner contended that the order was never communicated to them, affecting their ability to respond effectively. The court considered the legality of the revisional orders and the subsequent recovery actions initiated by the tax authorities.

2. The communication and service of the impugned order to the petitioner were crucial in determining the validity of the revisional orders. The petitioner argued that the order was not served within the prescribed time limit, as per section 20(3) of the Act. Citing precedents, the court highlighted the significance of timely communication of such orders to maintain procedural fairness and uphold the principles of natural justice. The petitioner's claim that the order was not served within the statutory timeframe raised questions about the enforceability and legality of the revisional actions taken by the tax authorities.

3. The issue of whether the impugned order was barred by limitation under section 20(3) of the Act was central to the court's decision. The court scrutinized the timeline of events, including the issuance and communication of the revisional order, to assess compliance with the statutory provisions. Relying on legal principles and precedents, the court emphasized the importance of adhering to the prescribed time limits for exercising revisional powers. The failure to serve the order within the stipulated period raised concerns about the validity and enforceability of the revisional order, ultimately leading to the court quashing the order as being time-barred.

In conclusion, the court allowed the writ petition, ruling in favor of the petitioner based on the issues of validity of the revisional orders, communication of the impugned order, and the statutory limitation period under section 20(3) of the Act. The court's decision underscored the significance of procedural compliance and adherence to statutory timelines in tax assessment and revision proceedings, ensuring fairness and upholding the rule of law.