2016 (9) TMI 1158 - HC - VAT and Sales Tax

Validity of assessment order - Bihar Sales Tax Act - Central Sales Tax Act - Form H left out for consideration reassessment proceedings - penultimate sale before export of the goods under Section 5(1) of the CST Act - Held that - reassessment proceedings ought to have been commenced and completed before expiry of the period of two years from the date of communication of the appellate order. After several years i.e. more than period of one decade, no reassessment order has ever been passed and directly demand notice dated 8 th March, 2013 has been issued and the review application has been decided after the appellate forum has decided the appeal. All the assessment order passed hereby quashed - petition allowed - decided in favor of petitioner.

Summary

Issues Involved:

1. Validity of orders dated 19th February 2013 and 8th March 2013.
2. Reassessment proceedings and limitation period under Section 24 of the Bihar Finance Act, 1981.
3. Presentation and consideration of Form-H in reassessment.

Detailed Analysis:

1. Validity of Orders Dated 19th February 2013 and 8th March 2013:

The writ petition primarily challenges the orders annexed as Annexures-10 and 11. Annexure-10 is an order by the Commissioner of Commercial Taxes, Jharkhand, Ranchi, in Review Case No. 771 of 2004, dated 19th February 2013. Annexure-11 is a demand notice dated 8th March 2013, based on the reassessment order dated 18th December 1999 by the Deputy Commissioner of Commercial Taxes, Jamshedpur Circle.

The court quashed and set aside both orders primarily because the reassessment proceedings were not completed within the statutory limitation period of two years as mandated by Section 24 of the Bihar Finance Act, 1981. The reassessment order was based on an outdated assessment and did not consider the appellate orders which allowed the presentation of Form-C, Form-F, and Form-H.

2. Reassessment Proceedings and Limitation Period Under Section 24 of the Bihar Finance Act, 1981:

The petitioner argued that the reassessment proceedings should have been completed within two years from the date of the appellate order, as per Section 24 of the Bihar Finance Act, 1981. The appellate orders dated 1st August 2002 allowed the petitioner to present all types of forms, including Form-H, and remanded the matter for reassessment. However, no reassessment order was passed within the prescribed period. The demand notice issued on 8th March 2013 was based on the reassessment order dated 18th December 1999, which was outdated and did not consider the appellate orders.

The court emphasized that the reassessment proceedings must be initiated and completed within the statutory period of two years from the date of communication of the appellate order. Since no reassessment order was passed within this period, the demand notice was deemed invalid.

3. Presentation and Consideration of Form-H in Reassessment:

The petitioner contended that Form-H, which is meant for the penultimate sale before the export of goods under Section 5(1) of the CST Act, was not considered in the reassessment proceedings. The appellate orders dated 1st August 2002 allowed the petitioner to present Form-H, along with Form-C and Form-F, before the Commercial Taxes Officer. However, the reassessment order dated 18th December 1999 did not consider Form-H, leading to an erroneous demand notice.

The court noted that the appellate orders explicitly allowed the presentation of Form-H, and the reassessment should have been conducted accordingly. The failure to consider Form-H in the reassessment rendered the demand notice invalid.

Conclusion:

The court quashed and set aside the orders dated 19th February 2013 and 8th March 2013, as they were based on an outdated reassessment order and did not comply with the statutory limitation period for reassessment proceedings. The court emphasized the importance of adhering to the statutory limitation period and considering all relevant forms in the reassessment process. The writ petition was allowed and disposed of accordingly.