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2015 (7) TMI 1103 - HC - VAT and Sales TaxPeriod of limitation - Assessment is out of time - not initiated or completed within five years from the expiry of the year to which tax relates - Section 19 of the KGST Act - Amendment to Section 17 of the KGST Act - authority has power to complete the assessment in terms of section 19 of the KGST Act - Held that - Sections 17 and 19 of the KGST Act operate in a different domain. Section 17 of the KGST Act relates to the assessment. Section 19 of the KGST Act relates to the assessment of escaped turnover. In section 19 of the KGST Act, specifically five years time is provided. Unless and until that five years is altered or amended by statutory provision, that cannot be taken away by an amendment to section 17 of the KGST Act. Section 19 of the KGST Act being an independent provision, necessarily, the limitation has to be reckoned in terms of section 19 of the KGST Act itself and not with reference to section 17 of the KGST Act. In view of the fact that there is no corresponding amendment to section 19 of the KGST Act, the assessment in terms of section 17 of the KGST Act is barred by limitation. - Decided in favour of petitioner
Issues:
Challenging assessment orders under the Kerala General Sales Tax Act, 1963 (KGST Act) based on limitation. Analysis: 1. Issue of Limitation in W. P. (C) No. 3822 of 2012: The original assessment for the year 2004-05 was completed on June 2, 2006, and a revised assessment order was passed on October 31, 2006. The proceedings were reopened under section 19 of the KGST Act with a notice dated October 27, 2011, and the assessment was completed on January 20, 2012. The petitioner argued that the assessment under section 19 was time-barred as it exceeded the five-year limitation period prescribed by section 19 of the KGST Act. 2. Issue of Limitation in W. P. (C) No. 4864 of 2013: For the assessment year 2001-02, the original assessment was completed on July 11, 2003, and a modified assessment order was passed on October 7, 2006. The petitioner received a notice under section 19 of the KGST Act on January 17, 2012, and after raising objections, received another notice on January 3, 2013. The assessment was then completed on February 2, 2013, which was challenged by the petitioner. The key contention was the limitation period under section 19 of the KGST Act. 3. Interpretation of Statutory Provisions: The argument presented was based on the Kerala Finance Act, 2011, amending section 17 of the KGST Act to extend the deadline for pending assessments to be completed by March 31, 2012. However, the court clarified that sections 17 and 19 of the KGST Act operate in different contexts. While section 17 pertains to general assessments, section 19 deals specifically with the assessment of escaped turnover, with a prescribed five-year limitation period. The court emphasized that unless there is a direct amendment to section 19, the limitation period cannot be altered by amendments to other sections like section 17. 4. Judgment: The court held that since there was no corresponding amendment to section 19 of the KGST Act extending the limitation period, the assessments conducted under section 17 were indeed barred by limitation. Consequently, the writ petitions were allowed, and the challenged assessment orders were set aside, ruling in favor of the petitioners in both cases.
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