2018 (4) TMI 1873 - HC - VAT and Sales Tax

Reassessment of order - period of limitation for reassessment - VAT liabilities against the petitioner for FY 2011-2012 - subsection 1 of Section 35 of the Gujarat Value Added Tax Act, 2003 - HELD THAT - In any case, when the audit assessment was carried out, Section 34 8A could not have been resorted to. There are number of other infirmities in the assessment order also. Notice to the respondents, returnable on 22nd June 2018. Impugned order is stayed.

Summary

Issues:
Challenge to order by Assistant Commissioner of Sales Tax regarding VAT liabilities for FY 2011-2012, Time limitation for reassessment under Section 35 of Gujarat Value Added Tax Act, 2003, Validity of exercise of powers under subsection 8A of Section 34 of VAT Act after audit assessment, Infirmities in assessment order, Reliance on previous court judgments.

Analysis:

The petitioner contested an order issued by the Assistant Commissioner of Sales Tax concerning VAT liabilities for the financial year 2011-2012. The petitioner argued that the returns for that year were subject to audit assessment, and the period for reassessment under Section 35 of the Gujarat Value Added Tax Act, 2003 had expired on March 31, 2017. Despite this, the respondent issued a notice in February 2018 for reassessment of the petitioner's turnover. The petitioner contended that the proceedings for reassessment had become time-barred, and the authority should not have relied on subsection 8A of Section 34 of the VAT Act in passing the order.

The petitioner's counsel highlighted that once an order for reassessment under subsection 1 of Section 35 of the VAT Act had been issued, the authority could not utilize the powers under subsection 8A of Section 34. Moreover, it was argued that Section 34(8A) should not have been applied after the audit assessment. The petitioner also pointed out various other deficiencies in the assessment order. The counsel relied on previous judgments of the Court in cases such as Dhanani Import Export Private Limited & Anr. vs. State of Gujarat and H. Tribhovandas & Sons & Anr. vs. State of Gujarat & Anr. to support their arguments.

The High Court issued a notice to the respondents, returnable on June 22, 2018, and stayed the impugned order pending further proceedings. The judgment allowed the draft amendment and acknowledged the petitioner's challenge to the order issued by the Assistant Commissioner of Sales Tax. The Court's analysis focused on the time limitation for reassessment, the validity of exercising powers under subsection 8A of Section 34 post-audit assessment, and the presence of infirmities in the assessment order. The reliance on previous court judgments further strengthened the petitioner's case, setting the stage for a detailed legal examination of the issues raised.