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2021 (10) TMI 1421 - HC - VAT and Sales TaxTime limitation for filing returns - Constitutional Validity of order passed by the Gujarat Tax on Entry of Specified Goods into Local Areas Act 2001 - violation of of Article 304(A) of the Constitution of India - HELD THAT - Since direct decisions under the Entry Tax Act clearly provide for the filing of the return with a reasonable time period and in absence thereof the contention has been raised that the initiation of any proceedings is barred by the law of limitation. The notice in the matter on hand has been issued in the matter on hand as can be noticed from the chronology of events after 13 years of the entry of the concerned vehicles into the State of Gujarat. Purchase had been made in the year 2006-07 when the trucks were taxable at the rate of 12.5 % under the Rajasthan VAT Act. All seven trucks were bought in the year 20007-08 and one truck was bought in the year 2008-09. Although no time has been sought for adducing the evidence according to learned advocate Mr. Uchit Sheth such a request was made to the authority concerned and it would take a while for the petitioner to produce an old record of the tax paid at Rajasthan which was at the rate of 12.5% and therefore also there is no substantive reason to pay the tax so far as the petitioner is concerned. Without entering into the merits and without quashing the notice on the ground of limitation in wake of the decision of MH KHANUSIYA VERSUS STATE OF GUJARAT 1 2018 (8) TMI 70 - GUJARAT HIGH COURT the matter is being remanded back to the Assessing Officer. Learned AGP has no input from the department on the factum of payment of tax at the rate of 12.5% at the relevant point of time in the State of Rajasthan. However the tax liability under the VAT Act is at par with Gujarat as non-filing of the return would permit the respondent authority to initiate proceedings of issuance of notice payment of tax at Rajasthan shall need consideration at the end of respondent. Petition disposed off by way of remand.
Issues Involved:
1. Constitutionality and violation of Article 304(A) of the Constitution of India. 2. Applicability of the period of limitation for assessment under the Entry Tax Act. 3. Principles of natural justice in the assessment process. 4. Validity of the assessment order given the tax paid under the Rajasthan VAT Act. Detailed Analysis: 1. Constitutionality and Violation of Article 304(A) of the Constitution of India: The petitioners challenged the order dated 13.09.2021 under Article 226 of the Constitution of India, arguing that the order passed under the Gujarat Tax on Entry of Specified Goods into Local Areas Act, 2001 (Entry Tax Act) is unconstitutional and violates Article 304(A) of the Constitution of India. The petitioners contended that since the trucks were purchased in Rajasthan and tax was paid under the Rajasthan VAT Act, no additional tax should be levied upon their entry into Gujarat. 2. Applicability of the Period of Limitation for Assessment under the Entry Tax Act: The petitioners argued that the notice issued after more than 13 years was time-barred and thus invalid. They relied on the decision in the case of State of Punjab and others vs. Bhatinda District Coop. Milk P. Union Ltd., where the court held that actions must be taken within a reasonable time if no period of limitation is specified in the statute. The court noted that the decision in M.H. Khansuiya vs. State of Gujarat, which was upheld by the Supreme Court, stated that if the importer did not file a return, the limitation period under section 8(5) of the Entry Tax Act does not apply. 3. Principles of Natural Justice in the Assessment Process: The petitioners claimed that the assessment order was passed in violation of the principles of natural justice. They argued that they were not given adequate time to gather and present evidence due to the sudden inquiry initiated after 13 years. The court acknowledged this contention and noted that despite the petitioners' request for more time to produce old records, the assessment was carried out without considering this request. 4. Validity of the Assessment Order Given the Tax Paid Under the Rajasthan VAT Act: The petitioners emphasized that they had already paid tax at the rate of 12.5% under the Rajasthan VAT Act when purchasing the trucks. They argued that this should exempt them from paying additional entry tax in Gujarat. The court did not quash the notice on the ground of limitation but remanded the matter back to the Assessing Officer for reconsideration. The court directed the officer to examine the documents related to the tax paid in Rajasthan and address the issues in accordance with the law. Conclusion: The court disposed of the petition by remanding the matter back to the State Tax Officer, Unit-II, Ahmedabad, for a fresh decision within six weeks. The officer was instructed to carefully examine all the documents and address the issues without being influenced by the court's disposal. The petitioners were given an opportunity to gather and present substantive documents regarding the tax paid in Rajasthan.
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