2015 (7) TMI 1107 - HC - VAT and Sales Tax

Validity of assessment order and challenge to the notification - By notification period of limitation for making assessment order extended - extraordinary circumstances - Alternative appellate remedy - Uttarakhand Value Added Tax, Act 2005 - According to the petitioner, the issue relating to the validity of the notification cannot be canvassed before the alternate forum. Held that - the learned Single Judge was in error in relegating the appellants to the alternate forum in regard to the prayer to quash the notification. We are of the view that the appellate forum constituted under the Act and the further statutory authorities could not have possibly sat in judgment over the legality of the notification issued by the State. To that extent, we would think that the appellants were justified in approaching the writ court and the learned Single Judge should have pronounced on the validity of the notification. As far as the other issues, which have been raised relating to the rate at which goods are to be taxed, there are certainly matters which can be gone into by the statutory authorities in our view. No doubt, this is subject to the view that we would take on the validity of the notification. If the Court views the matter in the context of the State of Uttarakhand having been born on 09.11.2000, with the obvious teething problems a new State would be confronted with which includes shortage of staff, number of cases to be dealt with, we cannot hold that it was normal circumstance and that there were no extraordinary circumstances. We have already adverted to the public interest involved in extending the period of limitation. In such circumstances, we see no merit in the appeals. In regard to the other points, which have been raised, we affirm the judgment of the learned Single Judge and we leave it open to the appellants to agitate the same before the competent forum. - Decided against the assessee.

Summary

Issues Involved:
1. Validity of the notification issued under sub-section (12) of Section 32 of the Uttarakhand Value Added Tax Act, 2005.
2. Rate at which taxes are to be imposed on the products of the appellants.

Issue-wise Detailed Analysis:

1. Validity of the Notification:
The appellants challenged the validity of a notification issued under sub-section (12) of Section 32 of the Uttarakhand Value Added Tax Act, 2005, which extended the period of limitation for completing assessments. The primary contention was that the notification lacked the requisite "extraordinary circumstances" to justify the extension.

The court examined the statutory provision:
> "Section 32: Period of Limitation for making Assessment or Reassessment-
> (12) Notwithstanding anything contained in this section, where the State Government is of the opinion that due to any extraordinary circumstances prevalent at the time in the State or any part of it, it will be difficult to complete assessment or reassessment in any case or class of cases within the time prescribed under this section, it may, by notification in the Gazette extend the time limit prescribed under this section for making assessment or reassessment in such a case or class of cases."

The appellants argued that the reasons provided in the affidavit filed by the state did not constitute "extraordinary circumstances." They referenced definitions from Black's Law Dictionary and P. Ramanatha Aiyar's Advanced Law Lexicon, defining "extraordinary circumstances" as highly unusual or out of the ordinary factors.

The court noted that the term "extraordinary" should be interpreted in the context of the statute, which aims to balance public interest in revenue collection with the taxpayer's right to timely assessments. The court found that the reasons provided, such as shortage of staff, state-wide strikes, and the necessity to complete previous years' assessments, constituted extraordinary circumstances justifying the extensions.

> "We would refrain from sitting in judgment over the same and holding that there were no extraordinary circumstances."

The court concluded that the notification was valid and the learned Single Judge erred in relegating the appellants to the alternate forum regarding the notification's validity.

2. Rate at which Taxes are to be Imposed:
The appellants also raised an issue regarding the rate at which taxes were to be imposed on their products. However, the learned counsel for the appellants limited his submissions to the validity of the notification, and the court did not address this issue in detail.

> "Learned counsel for the appellants limited his submissions to the issue relating to the validity of the notification and, therefore, we are not called upon to decide the other issue, namely, the issue relating to the rate at which the products are to be taxed."

The court affirmed that issues related to the tax rate could be addressed by the statutory authorities and competent forums.

Conclusion:
The appeals were dismissed, and the court upheld the validity of the notification extending the period for completing assessments under the Uttarakhand Value Added Tax Act, 2005. The appellants were advised to pursue the issue of tax rates before the competent forums. The court also noted that if the appellants filed appeals before the appropriate body, they could request the delay be condoned due to their pursuit of the matter in court.