2009 (11) TMI 899 - HC - VAT and Sales Tax

Validity of assessment order - case of petitioner is that there was no application of mind to the effect that whole or any part of the turnover of the assessee in respect of the concerned assessment year had escaped assessment to tax or had been under assessed - Held that - it is not the case of the Petitioner that the Petitioner had not disclosed full particulars. In these circumstances, the limitation has prescribed under Section 24(1)(b) i.e. four years from the date of final order of assessment would apply - As the assessment itself has become time barred and it would not be permissible for the Assessing Officer to now proceed on the basis of the notice dated 5th July, 2007 and pass reassessment orders, it is not necessary to go into the other issues raised. Reassessment proceedings are set aside on this ground alone - petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to reopening of assessment proceedings under Section 24 of the Delhi Sales Tax Act based on lack of reasons recorded initially and time limitation for reassessment.

Analysis:
The petitioner challenged the reopening of assessment proceedings under Section 24 of the Delhi Sales Tax Act, arguing that the notice lacked reasons and there was no consideration that any turnover had escaped assessment or been under-assessed. The petitioner alleged interpolation of records to insert reasons at a later date. The Respondent failed to pass reassessment orders within the time limit, leading to a dispute over the applicable limitation period, either four or six years from the final order of assessment. The Respondent contended for a six-year limitation, while the Petitioner argued for four years based on the absence of concealment or omission of turnover particulars.

The Court examined Section 24 of the Act, which stipulates a six-year limitation in cases of concealment or omission by the dealer, and a four-year limit in other cases. The Court found that the reasons for reopening the assessment did not indicate any concealment or failure to disclose by the Petitioner, but rather focused on impermissible deduction claims. Therefore, the four-year limitation applied in this instance. Citing the Supreme Court judgment in I.T.C. Ltd. vs. Superintendent of Commercial Taxes, the Court held that since the assessment had become time-barred, the Assessing Officer could not proceed with reassessment based on the notice issued in 2007.

Consequently, the Court set aside the reassessment proceedings solely on the ground of time limitation. The Respondent was directed to release the refundable amount of Rs. 1,78,58,291/- deposited in court, along with accrued interest, to the Petitioner. The Petitioner was advised to claim interest for the past period from the Sales Tax authorities separately.