2019 (8) TMI 584 - HC - VAT and Sales Tax

Reopening/revival of proceedings - the order has otherwise become final by the declaration of the Appellate Tribunal - denial of opportunity and the objection raised in this behalf - HELD THAT - As the Tribunal is interdicting the order in Ext.P6 on the ground of violative of principles of natural justice, the Appellate Tribunal did not consider any other point on which the parties are at issue with each other in Tax Appeal. Therefore, as a necessary consequence the Tribunal has rightly restored to file the proceedings of re-assessment initiated through Ext.P2 and Ext.P4 notices. The Tribunal has made it clear that the petitioner if fails to produce the records as directed by the Tribunal within the time limit of two months the original assessment order will stand restored. There is no dispute on the assessee/petitioner producing the record. Ext.R2(a) calls upon the petitioner to produce books of accounts. The assessee, in fact, did not produce the record. Therefore, the consequence of omission to produce books of accounts, by referring to the emphatic conclusion, it can be concluded that Ext.P6 assessment order is restored so far as assessment year 2008-09 is concerned. The Tribunal has restored Ext.P6 order and it is not within the competence of the second respondent to ignore Ext.P6 order and independently pass order of re-assessment in Ext.P13. In the considered view of this Court by giving the contextual meaning to the word 'restore' or 'restoration' used in Ext.P7 order, the order in Ext.P13 is illegal and beyond the jurisdiction of second respondent. The respondents do not contend that independent of Exts.P2 and P4, the respondents could have initiated proceedings for re-assessment through Ext.R2(a) at this length of time as such initiation is beyond the period of limitation. Ext.P13 order, for the above reasons, is set aside as illegal and beyond the jurisdiction of second respondent. As per the scheme under the Act, in the three tier system provided for determination, appeal, appeal to Tribunal etc, the final decision taken in the hierarchy of forums is binding on the officers and the assessee. In the case on hand, the Tribunal has taken the final decision. Therefore, that decision alone is binding between the parties for the assessment year 2008-09. Petition disposed off.

Summary

Issues Involved:
1. Legality and jurisdiction of Ext.P13 assessment order.
2. Compliance with the principles of natural justice.
3. Validity of reassessment notices Exts.P2, P4, and R2(a).
4. Limitation period for reassessment.

Issue-wise Detailed Analysis:

1. Legality and Jurisdiction of Ext.P13 Assessment Order:
The petitioner challenged Ext.P13 as illegal and beyond the jurisdiction of the State Tax Officer. The High Court held that the second respondent could not ignore Ext.P6 order and independently pass the reassessment order in Ext.P13. The court concluded that Ext.P13 was illegal and beyond the jurisdiction of the second respondent, emphasizing that the Tribunal’s order in Ext.P7 had restored the original assessment order (Ext.P6).

2. Compliance with the Principles of Natural Justice:
The Appellate Tribunal had set aside Ext.P6 due to the violation of natural justice, as the petitioner was not given an opportunity to prove the unaccounted purchase and export sales. The Tribunal remanded the case back to the assessing authority, directing the petitioner to produce all relevant records within two months. The petitioner failed to produce the records, leading to the restoration of Ext.P6. The High Court reiterated that the Tribunal’s direction was clear, and the failure to comply resulted in the restoration of the original assessment order.

3. Validity of Reassessment Notices Exts.P2, P4, and R2(a):
The petitioner argued that the reassessment notices were beyond the jurisdiction and limitation period. The High Court noted that Ext.R2(a) notice issued on 17.10.2017 was not a fresh reassessment notice but a continuation of the earlier notices (Exts.P2 and P4). However, the court emphasized that the Tribunal's order in Ext.P7 had already dealt with the reassessment process, and the second respondent could not initiate a new reassessment through Ext.R2(a).

4. Limitation Period for Reassessment:
The petitioner contended that the reassessment notice Ext.R2(a) was beyond the limitation period prescribed by the Act. The High Court agreed, stating that if Ext.R2(a) was considered independently, it would be beyond the period of limitation. The court highlighted that the respondents did not contend that independent reassessment proceedings could be initiated at this length of time.

Conclusion:
The High Court set aside Ext.P13 as illegal and beyond the jurisdiction of the second respondent, emphasizing that the original assessment order (Ext.P6) stood restored by the Tribunal’s order in Ext.P7. The court reiterated that the Tribunal's final decision was binding on both the officers and the assessee for the assessment year 2008-09. The writ petition was ordered accordingly.