2016 (11) TMI 1538 - HC - VAT and Sales Tax

Suo-moto revision of the assessments - Legal issue raised is that the notice dated 29.11.2005 was issued for revision more than 7 years after passing of the orders of assessment which is beyond maximum period prescribed under the Act for any action - Held that - the notice issued for revising the assessment after more than 7 years certainly deserves to be set aside on account of delay - The ground on which revisional power is sought to be exercised is irrelevant as the delay has not been explained - petition allowed - decided in favor of petitioner.

Summary

Issues:
1. Validity of notice issued for revision of assessments after more than 7 years from the date of original assessments.

The legal issue raised in the case was whether the notice dated 29.11.2005, issued for revision of assessments for the years 1990-91, 1992-93, and 1993-94 under Section 21(1) of the Punjab General Sales Tax Act, 1948, was valid considering it was issued more than 7 years after the original assessments were made. The petitioner argued that the notice was beyond the maximum period prescribed under the Act for any action. The assessments for the respective years were made on 23.02.1998, 28.05.1998, and 09.06.1998. The petitioner relied on a Supreme Court judgment which held that although no specific period of limitation was prescribed, the revisional jurisdiction should ordinarily be exercised within three to five years, and any delay beyond that would require a reasonable explanation. The Supreme Court judgment emphasized that the revisional authority should determine a reasonable period for exercising its jurisdiction. The court noted that the delay in issuing the notice without any explanation warranted setting aside the notice.

The court referred to the Supreme Court judgment which highlighted the importance of exercising revisional jurisdiction within a reasonable period, typically not exceeding five years. The court emphasized that the revisional authority, being a creation of the statute, should adhere to the statutory scheme and consider relevant factors in determining a reasonable period for revision. The court found that the delay of more than 7 years in issuing the notice for revision was unjustified and lacked any explanation, rendering it invalid. The court allowed the writ petition and set aside the impugned notice dated 29.11.2005.

In conclusion, the court held that the notice issued for revising the assessments after more than 7 years was not valid due to the unexplained delay, in line with the principles laid down by the Supreme Court regarding the reasonable period for exercising revisional jurisdiction. The court set aside the notice dated 29.11.2005, emphasizing the importance of adhering to statutory timelines and providing valid reasons for any delays in exercising revisional powers.