2016 (1) TMI 1216 - HC - VAT and Sales Tax

Time limitation - SCN challenged on the basis of section 24 where it is stated that the reassessment can be done within four years from date of passing of final assessment order - Held that - Section 24(1)(a) of the DST Act indicates that an assessment made under Section 23 can be reopened within a period of six years from the date of the final order of assessment in a case where the dealer has concealed, omitted or failed to disclose fully the particulars of his turnover. A part of the turnover of the Assessee had escaped assessment to tax and, accordingly, notice in form ST-15 was issued to the Assessee. It cannot be disputed that the Assessee was required to disclose in its return the value of purchases made against statutory forms which had not been utilized for the specified purposes. However the Assessee had undisputedly failed to do so - the contention that the assessment order has been passed beyond the period of limitation is without any merit. Appeal dismissed - decided against appellant.

Summary

Issues Involved:
1. Validity of reassessment order under Section 24 of the DST Act beyond the period of limitation.
2. Disclosure of turnover particulars by the Assessee for the assessment year 1994-95.

Analysis:

Issue 1: Validity of reassessment order under Section 24 of the DST Act beyond the period of limitation:
The Assessee challenged the reassessment order dated 22nd March, 2004, passed by the Assessing Authority (AA), contending that it was beyond the limitation period specified under Section 24(1) of the DST Act. The Assessee argued that reassessment beyond four years from the final assessment order was impermissible. However, the Revenue contended that the Assessee had not fully disclosed the turnover particulars, allowing for reassessment within the extended period of six years. The Tribunal upheld the reassessment order, stating that the Assessee had failed to disclose whether goods purchased against specific forms were resold or used in manufacturing, thereby justifying the extended limitation period. The Tribunal also referred to Rule 23A of the Delhi Sales Tax Rules, emphasizing the Assessee's failure to disclose the purchase price of goods, indicating a suppression of facts.

Issue 2: Disclosure of turnover particulars by the Assessee for the assessment year 1994-95:
The Assessee, a furniture sales company, initially reported a turnover of Rs. 51,21,538 for the assessment year 1994-95, resulting in a Nil demand assessment. Subsequently, a notice was issued under Section 24 of the DST Act, indicating that the turnover had escaped assessment. The reassessment by the AA revealed discrepancies, leading to an enhanced taxable turnover and a demand of Rs. 8,32,450. The Assessee contended that all necessary facts were disclosed in the returns, while the Revenue argued otherwise, pointing out blanks in the return columns and discrepancies discovered during an audit. The Court examined the case, noting that the Assessee had failed to disclose the value of purchases made against statutory forms not utilized for specified purposes, as required by Rule 23A. Consequently, the Court upheld the reassessment within the extended six-year limitation period, dismissing the appeal.

In conclusion, the Court upheld the reassessment order under Section 24 of the DST Act, ruling that the Assessee had failed to fully disclose turnover particulars, justifying the extended limitation period for reassessment. The judgment emphasized the importance of disclosing all relevant details in returns as required by law, affirming the validity of the reassessment and dismissing the appeal.