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2017 (12) TMI 204 - HC - VAT and Sales TaxJurisdiction - time limitation - whether the first respondent, in exercise of his powers under Section 32 of the TNGST Act, while purporting to pass orders of assessment could do so, beyond the period of limitation stipulated under Section 16 of the TNGST Act, 1959? - Held that - the issue involved in this writ petition is squarely covered by the decision of this Court in the case of Salem Steel Suppliers and others vs. The Deputy Commissioner and another 2017 (9) TMI 946 - MADRAS HIGH COURT , where it was held that The power under Section 16(1) is wide enough and cannot be said to be limited to assessment of assessable turnover under that sub-section by the Assessing Authority only. It is to be invoked in all cases, where, a statutory functionary under the Act assumes jurisdiction to assess the escaped turnover. Therefore, it was held that, in passing an original order of assessment, the Board exceeded its powers under Section 34, and that the order was also passed beyond time. Therefore, the order was held to be unenforceable in law. Petition allowed - decided in favor of petitioner.
Issues:
1. Validity of reopening assessment proceedings by the assessing officer. 2. Jurisdiction of the revisional authority to exercise suo motu revision powers. 3. Application of Section 16(1) of the Madras General Sales Tax Act, 1959 in assessing escaped turnover. 4. Limitation period for reopening assessments under Section 16(1)(a) of the Act. 5. Scope of jurisdiction under Section 34 of the TNGST Act, 1959 for revision by the Joint Commissioner. 6. Reliance on extraneous materials by the Joint Commissioner in revising orders. Analysis: Issue 1: The High Court considered the validity of reopening assessment proceedings by the assessing officer. The court observed that the notices issued to the petitioners lacked independent inquiry by the assessing officer and were merely a reiteration of earlier allegations without new material. The court held that the assessing officer cannot exercise powers beyond what was done initially, especially if it is prejudicial to revenue and barred by limitation. Issue 2: The court analyzed the jurisdiction of the revisional authority in exercising suo motu revision powers. Referring to previous judgments, the court emphasized that revisional powers must adhere to statutory provisions and guidelines, ensuring objectivity and compliance with the Act. The court held that orders passed beyond the limitation period or without new material are unsustainable in law. Issue 3: Regarding the application of Section 16(1) of the Act in assessing escaped turnover, the court highlighted that the power under this section is broad and not limited to the assessing authority. It emphasized that statutory functionaries must follow due process and time limitations when assessing escaped turnover to maintain enforceability of orders. Issue 4: The court discussed the limitation period for reopening assessments under Section 16(1)(a) of the Act. It clarified that assessments can only be reopened within five years from the relevant year if turnover has escaped assessment, emphasizing the importance of adhering to statutory timelines. Issue 5: In analyzing the scope of jurisdiction under Section 34 of the TNGST Act, 1959 for revision by the Joint Commissioner, the court held that reliance on extraneous materials not on record is impermissible. The court emphasized that revisionary powers must be exercised based on materials available during the original order's passing. Issue 6: The court addressed the issue of the Joint Commissioner's reliance on extraneous materials in revising orders. It held that the Joint Commissioner cannot base revisions on materials not on record during the original order. The court emphasized the importance of relying on existing materials to maintain the integrity and legality of revisionary actions.
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