2018 (7) TMI 1663 - HC - VAT and Sales Tax

Reopening of assessment - TNVAT Act - Held that - This Court is of an opinion that there is no total prohibition for reopening of the assessment, if any discrepancies are found by the competent authorities during scrutiny - reopening of assessment is held to be valid - the writ petition stands disposed of, by giving liberty to the respondents to initiate reopening of the proceedings, if the authority competent deems fit and appropriate to do so.

Summary

Issues:
Challenge to original assessment order under TNVAT Act, 2006.

Analysis:
The petitioner challenged an order issued by the respondent in CST No. 501300/2011-12, contending that the assessment violated the provisions of the Tamil Nadu Value Added Tax Act, 2006. The petitioner argued that as per Section 9(2-A) of the CST Act, 1956 read with a proviso to Section 22(2) of the TNVAT Act, a dealer is deemed to have been assessed to tax as per their returns if assessment orders are not passed for specific years by a certain deadline. The petitioner claimed that the respondent's assessment order dated 20.05.2013 was erroneous and in violation of statutory provisions, thus seeking its annulment.

The proviso clause of Section 22(2) of the TNVAT Act specifies that returns for certain years on which assessment orders are not passed shall be deemed to have been assessed by a particular date. The petitioner's assessment years were 2011-12, making the deemed clause applicable. Therefore, the impugned order passed on 20.05.2013 was deemed unenforceable. The petitioner relied on a previous judgment by the same Court, which concluded that the statutory time limit could not be extended by the respondent, except in cases of identified inconsistencies or discrepancies in the returns, allowing action under Section 27 of the TNVAT Act.

The respondent argued that the petitioner did not fulfill the conditions of Section 22(2) by failing to submit required documents with their returns. However, the respondent did not send notices to the petitioner, claiming compliance with principles of natural justice by providing an opportunity to rectify inconsistencies. The Court opined that there was no absolute prohibition on reopening assessments if discrepancies were discovered, following a previous judgment. The Court emphasized that the assessing officer had until a specific date to pass an assessment order, beyond which reopening proceedings could be initiated if necessary.

Based on the cited judgment, the Court allowed the present writ petition, granting the respondents the liberty to initiate reopening proceedings if deemed appropriate, and directing non-enforcement of the impugned order dated 20.05.2013 for the assessment years 2011-12. The Court made no cost orders in this regard, closing all connected miscellaneous petitions.