2018 (4) TMI 364 - HC - VAT and Sales Tax

Validity of the assessment order - Time Limitation - whether the orders of assessment including the one made on 31 March 1997 would be barred by the provisions of limitation as prescribed by Section 21 (5) of the U.P. Trade Tax 1948? - Held that - Jurisdiction as is well recognised is an expression of multiple and varied hues. Essentially and unless the context otherwise suggests or commands a narrow interpretation being conferred on it, would include within its fold all such matters as would touch upon the authority of the Court, tribunal or adjudicatory forum to decide a lis or exercise its powers. In this sense the issue of limitation is also one which is determinative of the jurisdiction conferred upon an authority. It is evident that the period of limitation will have to be necessarily recognised to have commenced from 6 July 1996. Since the order of assessment came to be made evidently after the expiry of the period prescribed under Section 21 (5), the order dated 31 March 1997 as well as all consequential proceedings initiated and drawn up subsequent thereto must necessarily fall and stand set aside. Revision allowed.

Issues Involved:
1. Validity of the assessment order dated 31 March 1997.
2. Applicability of the limitation period prescribed by Section 21(5) of the U.P. Trade Tax Act, 1948.
3. Jurisdictional implications of the limitation period.
4. Interpretation of the appellate authority's order dated 6 July 1996.

Detailed Analysis:

1. Validity of the assessment order dated 31 March 1997:
The revisionist challenged the assessment order dated 31 March 1997, arguing that it was barred by the limitation period prescribed under Section 21(5) of the U.P. Trade Tax Act, 1948. The assessment order was made following an ex parte order dated 30 December 1995, which was subsequently set aside by the appellate authority on 6 July 1996. The court concluded that since the reassessment was conducted after the prescribed limitation period, the order dated 31 March 1997, and all subsequent proceedings must be set aside.

2. Applicability of the limitation period prescribed by Section 21(5) of the U.P. Trade Tax Act, 1948:
The primary legal question was whether the reassessment order dated 31 March 1997 was barred by the limitation period under Section 21(5). The court referenced the Full Bench decision in M/s. Minakshi Udyog Agra Vs. Commissioner of Trade Tax, which clarified that the limitation period begins from the date the appellate authority directs the reopening of the assessment. Therefore, the limitation period commenced on 6 July 1996, and the reassessment conducted on 31 March 1997 was beyond the prescribed period.

3. Jurisdictional implications of the limitation period:
The court emphasized that the limitation period under Section 21(5) is jurisdictional, meaning it determines the authority of the assessing officer to reassess. The court cited the Supreme Court's interpretation of "jurisdiction" in various cases, noting that jurisdiction includes the authority to decide on matters within the prescribed limits. Since the limitation period is jurisdictional, it cannot be waived or conferred by consent. The court held that the Tribunal's reasoning that the issue of limitation did not arise was unsustainable.

4. Interpretation of the appellate authority's order dated 6 July 1996:
The court analyzed the appellate authority's order dated 6 July 1996, which directed the reopening of the assessment under Section 30. The court found that the order unequivocally commanded the assessing authority to reopen the proceedings, leaving no discretion to the assessing authority. The court rejected the respondent's argument that the order merely remitted the matter for consideration. The court concluded that the reopening was automatic and immediate, as per the Full Bench's interpretation in Minakshi Udyog.

Conclusion:
The court held that the reassessment order dated 31 March 1997 was barred by the limitation period under Section 21(5) and thus invalid. Consequently, all subsequent proceedings based on this reassessment were also invalid. The revision was allowed, and the order dated 7 September 2005 by the Tribunal was set aside, entitling the revisionist to all consequential reliefs.

← Previous Next →