2018 (11) TMI 806 - HC - VAT and Sales Tax

Validity of Assessment Order - time limitation - petitioner has challenged the assessment orders inter alia on the ground that there is a huge delay in the service of the copies of the orders upon the petitioner which give rise to a legitimate presumption that the orders were not actually passed on the dates mentioned in the orders rather on a much later date beyond the time prescribed - Held that - The dates of the assessment orders and the date of their service upon the petitioner are clear enough and it is only on account of the long gap between passing of the orders and their services that a legitimate presumption is arising that the orders may not be the orders passed on the purported date but on the subsequent date. This presumption arises on the admitted facts without going into any factual controversy. Under the facts and circumstances of the case as there is inordinate delay in the service of the orders which goes completely unexplained coupled with the fact that the officer passing the orders made no efforts to serve them and the orders could be served only after he was transferred necessitates exercise of discretionary jurisdiction. The assessment orders impugned in each of the writ petitions are of subsequent date rather than of date on which they are purported to have been passed and as such are barred by limitation - petition allowed.

Summary

Issues:
1. Delay in service of assessment orders leading to a challenge by the petitioner.
2. Allegation of backdating of assessment orders by the assessing authority.
3. Legitimate presumption of orders being passed beyond the limitation period.
4. Examination of the conduct of the assessing officer and department officials.

Analysis:
1. The petitioner, a Public Limited Company, challenged assessment orders for the assessment years 2009-10 and 2010-11 to 2011-12 under the U.P. Value Added Tax Act and Entry Tax. The petitioner alleged a significant delay in the service of assessment orders, leading to doubts about the actual dates of the orders' issuance. The petitioner contended that the delay in service raised legitimate concerns about the validity and jurisdiction of the assessment orders.

2. The petitioner argued that the assessing authority had backdated the assessment orders, as evidenced by the substantial delays in serving the orders. The petitioner's counsel highlighted the manipulation in records, indicating that the orders might have been passed after the prescribed time limits. The assessing authority, on the other hand, defended the delay in service but failed to provide a satisfactory explanation for the prolonged gap between the order dates and service dates.

3. The court considered precedents where delays in serving assessment orders led to a presumption that the orders were not passed within the statutory time limits. Citing relevant case laws, the court emphasized that unexplained delays in serving orders could indicate that the orders were issued after the expiration of the limitation period. The court noted that the admitted facts, including the extended delay in serving the orders, supported a legitimate presumption that the orders were passed beyond the prescribed dates.

4. In light of the circumstances, the court found the conduct of the assessing officer and department officials questionable. The court directed a thorough inquiry into the matter to determine responsibility for manipulating records and causing delays in serving assessment orders. The court emphasized the need for strict scrutiny of the officers' actions and instructed the Special Counsel to seal the relevant records for an inquiry by the Commissioner, Commercial Tax U.P., to ascertain accountability for the irregularities.

In conclusion, the court quashed the impugned assessment orders, ruling them to be beyond the limitation period and without jurisdiction. The court's decision highlighted the importance of timely and fair administrative actions, signaling a need for accountability and transparency in tax assessments.