2019 (9) TMI 1360 - HC - VAT and Sales Tax

Reopening of assessment - time limitation - main case of the petitioner in the writ petition is that exhibit P5 order has been issued beyond the time-limit prescribed under the Central Sales Tax (Kerala) Rules for reassessment - HELD THAT - In view of the express pro- vision of rule 6(7) of the Central Sales Tax (Kerala) Rules, 1957, as clarified by the judgment of the Division Bench of this Court referred above, exhibit P3 notice issued to the petitioner on March 12, 2014 was clearly barred by time. It follows therefore, that the impugned assessment order (exhibit P5) passed pursuant to the said notice is also one that is passed without jurisdiction. Petition allowed.

Summary

Issues:
1. Time-limit for re-opening assessment under Central Sales Tax (Kerala) Rules.
2. Jurisdiction of the assessing authority in issuing assessment orders.

Analysis:
1. The petitioner, engaged in the business of manufacturing and sale of plywood, challenged the re-opening of assessment for the year 2006-07 under the Central Sales Tax Act. The petitioner contended that the notice issued by the assessing authority on March 12, 2014, proposing re-assessment, was beyond the time-limit prescribed under rule 6(7) of the Central Sales Tax (Kerala) Rules. The rule stipulates a four-year time period for re-opening an assessment from the expiry of the relevant tax year. The petitioner argued that since the assessment year in question was 2006-2007, the notice issued in 2014 was beyond the prescribed time limit, as per the Division Bench judgment in Writ Appeal No. 1018 of 2013 (State of Kerala v. Parisons Agrotech Private Limited).

2. The High Court, after considering the submissions from both parties, analyzed the provisions of rule 6(7) of the Central Sales Tax (Kerala) Rules, 1957, and the precedent set by the Division Bench judgment. The Court held that the notice issued to the petitioner on March 12, 2014, was clearly time-barred based on the rule and the judicial interpretation provided in the previous judgment. Consequently, the Court concluded that the assessment order (exhibit P5) passed as a result of the time-barred notice lacked jurisdiction. As a result, the Court quashed the impugned order and granted the writ petition in favor of the petitioner, providing consequential reliefs.

This judgment highlights the significance of adhering to the statutory time limits for re-opening assessments under tax laws and emphasizes the importance of jurisdictional validity in assessment proceedings. The Court's decision underscores the need for assessing authorities to strictly comply with procedural requirements to ensure the legality and validity of their actions.