2018 (11) TMI 1268 - HC - VAT and Sales Tax

Limitation prescribed under the Kerala General Sales Tax Act, 1963 for completion of penalty proceedings, under Section 45A and Section 67 of the respective enactments - Section 67 of the KVAT Act. Held that - Obviously here, the notice was first issued long after the defalcation alleged by the DRI, was brought to the notice of the CTD. But the proceedings initiated by the DRI was pending and the CTD waited for the final result - If the notice has been delayed, as in the present case, where the proceedings were initiated by the DRI in 2006 and the same was concluded only in the year 2011 after which the CTD took out proceedings under Section 45A of the KGST Act and Section 67 of the KVAT Act, then necessarily it would have to be decided as to whether the offence alleged by the CTD was one dependent only on the proceedings initiated by the DRI or also on the order of the Commissioner of Customs. There is no question of limitation arising, since the proceedings were completed within three years from the date of the order of the Commissioner of Customs itself, the notice having been issued in the year 2012, which is for reason of the receipt of the order of 2011, being in 2012 - the respondent-assessee is directed to file an appeal from the impugned orders within a period of thirty days from the date of receipt of a certified copy of this judgment. Appeal allowed in part.

Summary

Issues:
Limitation period for penalty proceedings under KGST Act and KVAT Act.

Analysis:
The judgment involved an appeal by the State concerning a case categorized as Group-D under the KGST Act and KVAT Act. The main issue revolved around the limitation period for penalty proceedings under Section 45A of the KGST Act and Section 67 of the KVAT Act. The court discussed the evolution of the limitation period under the KVAT Act, noting changes from one year to three years and eventually removing the limitation entirely in 2014. Reference was made to a previous Division Bench decision regarding the commencement of the limitation period from the date of detection of the offense, not merely from the date of inspection or seizure of records.

The court emphasized the importance of determining the specific date of detection based on various factors such as the nature of inspection, materials recovered, inventory, and the manner in which the officer proceeded. The State argued that penalty proceedings were initiated within a reasonable time after the detection of the offense, while the respondent contended that the proceedings were delayed and might be hit by limitation.

The judgment referred to relevant legal precedents to support arguments from both sides. It highlighted the need for proceedings to be completed within a reasonable period, even if no specific limitation period is provided in the statute. The court acknowledged the significance of the date of detection of the offense in determining the limitation period, as established in previous decisions.

Ultimately, the court decided to set aside the judgment of the Single Judge and allowed the respondent to file an appeal within thirty days. The decision emphasized that the question of limitation is a mixed question of law and fact, which should be addressed by the statutory authorities. The judgment concluded by permitting the respondent to appeal within the specified time frame, ensuring a fair consideration of the limitation issue by the first appellate authority.

In conclusion, the judgment provided a detailed analysis of the limitation period for penalty proceedings under the KGST Act and KVAT Act, emphasizing the importance of determining the date of detection of the offense and completing proceedings within a reasonable period, even in the absence of a specific statutory limitation.