2020 (2) TMI 1315 - HC - VAT and Sales Tax

Service of Notice - Time Limitation - case of the petitioner is that notice is beyond limitation as prescribed under Section 29(4) of Punjab VAT Act - the case of the respondents is that assessment orders were finalised and computer entries were made, albeit fraudulently - HELD THAT - No dates of assessment orders have been mentioned in the reply. In any case, if there was already an assessment order, there was no occasion to proceed under Section 29(2). From the writs challenging assessment orders, it is apparent that not only the notices under Section 29(2) were issued but the assessments were also framed under Section 29(2) of the Act. The contention of fraud does not enhance the case of the respondents. There is a specific provision, i.e. Section 29(7) authorising to amend the assessment orders in eventuality of fraud etc., in the present cases though reliance has been placed on the said provision, however no action till date is initiated under Section 29(7). Moreover, under Section 65 of the Act, there are supervisory powers with the Commissioner to initiate revision proceedings who at his own motion can call the pending as well as disposed of proceedings by the subordinate authority. Normally interference under Article 226 of the Constitution of India is not made in the cases where there is alternative statutory remedy available, more so against challenge to show cause notice or assessment order directly. The law is well-settled that exception can be given to the self imposed restriction, for enforcement of fundamental right in case of violation of principles of natural justice, the proceedings are without jurisdiction or vires are challenged. The facts are not disputed, admittedly, the notice is beyond limitation and it is in these circumstances that interference is made in the writ petition. The impugned notice is set aside - Adjourned to 16.4.2020.

Summary

Issues:
1. Quashing of impugned notice dated 28.5.2019 as time-barred under Section 29(4) of the Punjab Value Added Tax Act, 2005.
2. Interpretation of Section 29(1) to (4) regarding assessment of tax.
3. Amendment in Section 29 extending the assessment period to six years.
4. Application of Section 29(7) for amending assessment orders due to fraud or misrepresentation.
5. Consideration of alternative statutory remedies under Article 226 of the Constitution of India.

Issue 1: Quashing of Impugned Notice:
The petitioner sought to quash the notice dated 28.5.2019 as time-barred under Section 29(4) of the Act. The notice for assessment under Section 29(2) was issued for the assessment year 2010-11. The petitioner argued that the notice exceeded the limitation period prescribed under the Act.

Issue 2: Interpretation of Section 29(1) to (4):
Section 29(1) to (4) of the Act deals with the assessment of tax, including the process of sending intimation specifying the sum payable, best judgment assessment, and the limitation period for making assessments. The court analyzed these provisions to determine the timeline for assessment under the Act.

Issue 3: Amendment in Section 29:
The Act was amended to extend the assessment period to six years from the date of filing the annual statement. The court deliberated on the implications of this amendment and its applicability to the present case.

Issue 4: Application of Section 29(7):
Section 29(7) allows for amending assessment orders within three years in cases of fraud, misrepresentation, or escaped assessment. The respondents argued for the validity of the notice issued beyond the six-year period based on this provision, highlighting the need for prior permission from the Commissioner.

Issue 5: Alternative Statutory Remedies:
The court considered the availability of alternative statutory remedies under Article 226 of the Constitution of India. While acknowledging the general principle of not interfering when such remedies exist, exceptions were noted for cases involving fundamental rights violations, lack of jurisdiction, or challenge to the vires of an Act.

In conclusion, the court set aside the impugned notice as beyond the limitation period, allowing the respondents to pursue lawful actions. The court kept the petition pending for further examination due to the alleged fraud's significant scale, directing the respondents to submit a status report. The next hearing was adjourned to 16.4.2020.