2013 (2) TMI 218 - HC - VAT and Sales Tax

Validity of notice issued u/s 23 of the Maharashtra VAT 2005 - date of issue is 17 January 2012 for the two AY 2005-6 and 2006-7 - Held that - Assessee s submission proceeds on the basis that the second proviso to Section 21(2) would apply and no order of assessment could be made after the expiry of three years. The fallacy in the submission is that in respect of assessments for the period ending on or before 31 March 2008, Section 21(3) initially provided an extended period of six years for the issuance of a notice for assessment and where such a notice was issued, Section 23(3A) allowed a period of seven years to complete the assessment. Consequently, for AY 2005-6 a notice under Section 21(3) could be issued until 31 March 2012 and the assessment under Section 23(3A) could then be made until 31 March 2013. For AY 2006-7 a notice under Section 21(3) could have been issued until 31 March 2013 and an assessment under Section 23 (3A) could be made by 31 March 2014. The fact that a notice had not been issued would make no difference to the situation because the time for the issuance of the notice under Section 21(3) and consequently for making an assessment under Section 23(3A) had not expired. Before the assessment became time barred, the legislature stepped in by deleting Section 21 by Ordinance 6 of 2011 and by making a corresponding amendment by Section 23(3A). But, the point to note is that when the amendment was brought about by Ordinance 6 of 2011, the time prescribed for the issuance of a notice under Section 21 (3) and for completing an assessment under Section 23(3A) had not come to an end and the assessment had not become time barred. The amended provision does not make any difference to the position. Both under the unamended and under the amended provision, the assessment is not time barred for A.Ys 2005-06 and 2006-07. Thus as the period of limitation for making an assessment in respect of the period ending on 31 March 2008 had yet not expired, the present is not a case where by a subsequent amendment, limitation has been enlarged even though the limitation prescribed under the earlier legislative provision has expired - no merit in the Petition.

Summary

Issues Involved:

1. Validity of the notice issued under Section 23 of the Maharashtra Value Added Tax Act, 2005.
2. Applicability and interpretation of the limitation period under Section 21(3) and Section 23(3A) of the Maharashtra Value Added Tax Act, 2005.
3. Impact of the amendment introduced by Ordinance 6 of 2011 on the limitation period.

Issue-wise Detailed Analysis:

1. Validity of the Notice Issued Under Section 23 of the Maharashtra Value Added Tax Act, 2005:

The Petitioner, a society engaged in the manufacture of sugarcane, challenged the validity of notices issued under Section 23 of the Maharashtra Value Added Tax Act, 2005 for the assessment years 2005-06 and 2006-07. The Petitioner argued that the assessments became barred by limitation on 31 March 2009 and 31 March 2010, respectively, making the notices unlawful. The Court noted that the challenge to the constitutional validity of Section 23(3A) was not pursued during the hearing.

2. Applicability and Interpretation of the Limitation Period Under Section 21(3) and Section 23(3A) of the Maharashtra Value Added Tax Act, 2005:

The Court examined the relevant provisions of the Maharashtra Value Added Tax Act, 2005. Section 21(1) provided a two-year period for issuing a notice of assessment where a return was filed by the prescribed date. Section 21(2) provided a three-year period where no return was filed. Section 21(3) extended the period to six years for issuing a notice of assessment for periods ending on or before 31 March 2008. Section 23(2) allowed the Commissioner to serve a notice for assessment within three years from the end of the year in which the return was filed. Section 23(3A), introduced on 15 August 2007, allowed the Commissioner to assess within seven years where a notice under Section 21(3) was served.

The Petitioner argued that the assessments for AY 2005-06 and 2006-07 became time-barred on 31 March 2009 and 31 March 2010, respectively, as no notice under Section 21(3) was served before these dates. The Revenue contended that under Section 21(3), a notice could be served within six years, and under Section 23(3A), the assessment could be completed within seven years. Therefore, the assessments were not time-barred.

3. Impact of the Amendment Introduced by Ordinance 6 of 2011 on the Limitation Period:

Ordinance 6 of 2011 deleted Section 21 and amended Section 23(3A) to remove the reference to Section 21(3) and introduced a non-obstante clause. The Petitioner argued that the amendment could not revive an assessment that had already become time-barred. The Revenue argued that the time for issuing a notice and completing the assessment had not expired when the amendment was introduced.

The Court held that for periods ending on or before 31 March 2008, Section 21(3) provided an extended period of six years for issuing a notice, and Section 23(3A) allowed seven years for completing the assessment. For AY 2005-06, a notice could be issued until 31 March 2012, and the assessment could be completed by 31 March 2013. For AY 2006-07, a notice could be issued until 31 March 2013, and the assessment could be completed by 31 March 2014. The Court found that the time for issuing a notice and completing the assessment had not expired when Ordinance 6 of 2011 was introduced. Therefore, the assessments were not time-barred under both the unamended and amended provisions.

The Court distinguished the present case from the Siemens India Ltd. case, where the limitation period had expired before the amendment. In the present case, the limitation period had not expired when the amendment was introduced.

Conclusion:

The Court found no merit in the Petition and dismissed it, concluding that the assessments for AY 2005-06 and 2006-07 were not time-barred under both the unamended and amended provisions. There was no order as to costs.