2018 (4) TMI 1706 - HC - VAT and Sales Tax

Validity of reassessment order - time limitation - specific case of the petitioner is that since the proceedings of re- assessment against the petitioner had been initiated and signed by the assessing officer on July 18, 2001 and dispatched on July 20, 2001 - HELD THAT - As per the sub-rule (3) of rule 28 inserted with effect from July 21, 2001, the limitation for disposal of the case where the notices had been issued after the coming into force of the said sub-rule (3), would be two years, but in case the proceeding had been initiated prior to the coming into force of the said sub-rule (3), which was on July 21, 2001, the period of limitation would be one year. Admitted case of the parties is that notices for re-assessment under sub- section (8) of section 12 of the Act were signed by the assessing officer on July 18, 2001 and dispatched on July 20, 2001. Hence, the same would clearly be prior to the coming into force of sub-rule (3) of rule 28 of the Rules, as by issuance of notification dated July 18, 2001 by the assessing officer, the reassessment proceedings had been initiated and thus would be considered as cases pending prior to the insertion of sub-rule (3), which was on July 21, 2001. The assessment orders could have been passed only within one year from the date of the commencement of Orissa Sales Tax (Amendment) Rules, 2001, which came into force on July 21, 2001. In the present cases, the assessment orders having been passed beyond the period of limitation, the said orders dated June 30, 2003, which were passed beyond the period of one year, would thus be without jurisdiction, and liable to be quashed. The assessment orders dated June 30, 2003 for the assessment years 1996-97, 1997-98 and 1998- 99 passed by the assessing officer are thus quashed - Petition allowed.

Summary

Issues: Challenge to assessment orders dated June 30, 2003 for the assessment years 1996-97, 1997-98, and 1998-99 under section 12(8) of the Orissa Sales Tax Act, 1947.

The petitioner challenged the assessment orders dated June 30, 2003, for the assessment years 1996-97, 1997-98, and 1998-99, which were initiated based on notices for reassessment issued under section 12(8) of the Orissa Sales Tax Act, 1947. The petitioner relied on a notification dated July 19, 2001, inserting sub-rule (3) in rule 28, setting a limitation for disposing of pending cases under section 12(8) to be one year from the date of the notification's commencement. The petitioner contended that since the reassessment proceedings were initiated before the notification's effective date, the assessment orders passed on June 30, 2003, beyond the one-year period, should be quashed.

The Revenue argued that section 12(8) does not specify any time limit for disposing of reassessment proceedings, considering the insertion of sub-rule (3) of rule 28 as directory, not mandatory. However, the court disagreed, stating that rules framed under the Act have the force of law and cannot be considered merely directory. Sub-rule (3) of rule 28, effective from July 21, 2001, mandated disposal of cases pending under section 12(8) within one year from the rule's commencement, or two years for cases initiated thereafter.

The court noted that since the notices for reassessment were signed and dispatched before the effective date of sub-rule (3), they were considered pending prior to the rule's insertion. Therefore, the assessment orders should have been passed within one year from the rule's commencement on July 21, 2001. As the assessment orders dated June 30, 2003, were beyond this one-year period, the court held them to be without jurisdiction and quashed them. Consequently, the writ petitions were allowed, and the assessment orders for the mentioned years were annulled, with no cost imposed.