2019 (8) TMI 823 - HC - VAT and Sales Tax

Time Limitation - Sections 27(1)(a) and 27(1)(b) of TNVAT Act - TNVAT Act, 2006 - relevant date for inspection and giving of reports - Best Judgement assessment u/s 22(2) of TNVAT Act - whether inspection by the Enforcement Wing Official on 16.12.2016 and the report given by the Enforcement Wing Official on 16.04.2018 can be construed as 'determination' by adopting best judgment method within the meaning of Section 27(1)(a) of TNVAT Act? HELD THAT - The learned Revenue/State Counsel does not dispute that if revisional notice and date of impugned orders i.e., 27.09.2018 and 30.05.2019 are taken, the impugned orders are barred by six years. Saying so, learned SGP wanted this Court to construe dates of inspection/report of/given by Enforcement Wing as reckoning dates to arrive at dates on which limitation stood arrested. Interpretation of statute - scope of term 'determine' occurring in Section 27(1)(a) of TNVAT Act - HELD THAT - Taking the date of revisional notice as the reckoning date, it is clearly after six years from the date of assessment had elapsed. This Court hastens to add that, to test with exactitude, the date of service of revisional notice on writ petitioner is relevant. In cases on hand the exact date of service has not been set out in the case file, but that pales into insignificance as the very date of revisional notice is beyond the period of limitation. Obviously service of a notice on the noticee cannot be prior to the date of the notice itself. This Court is of the considered view that reckoning date can at best be only the date of revisional notice i.e., 27.09.2018. This Court has no difficulty in coming to the conclusion that impugned assessment orders which are admittedly under Section 27(1)(a) of TNVAT Act, are barred by limitation as contained in the very provision under which the revised assessments have been made i.e., Section 27(1)(a) of TNVAT Act, as the same have been determined after six years have elapsed from the date of assessment - To be noted, limitation is based on public law principle and it is based on the public law principle that one cannot be kept guessing in eternity. This public law principle also enures in favour of the interpretation and the considered view this Court has taken. Petition allowed.

Summary

Issues Involved:
1. Limitation under the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act).
2. Whether inspection and report by the Enforcement Wing can save limitation for the Revenue.
3. Interpretation of the term "determine" in Section 27(1)(a) of the TNVAT Act.

Detailed Analysis:

Issue 1: Limitation under the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act)
The central theme of the writ petitions is limitation under the TNVAT Act. The assessment years in question are 2007-08, 2008-09, 2009-10, and 2010-11, with the deemed assessment date being 30.06.2012. Revisional notices were issued on 27.09.2018, and revised assessment orders were passed on 30.05.2019. The petitioner contended that these orders are barred by limitation as per Sections 27(1)(a) and 27(1)(b) of the TNVAT Act, which prescribe a six-year limitation period from the date of assessment, effective from 19.06.2012. The court noted that the six-year period expired on 30.06.2018.

Issue 2: Whether inspection and report by the Enforcement Wing can save limitation for the Revenue
The Revenue argued that the inspection on 16.12.2016 and the report on 16.04.2018 should be considered part of the assessment process, thus saving the limitation period. However, the court noted that the revisional notice and the revised assessment order were issued after the six-year limitation period had elapsed. The court emphasized that the assessment process must be initiated concerning the dealer, which in this case, occurred only on 27.09.2018, well beyond the limitation period.

Issue 3: Interpretation of the term "determine" in Section 27(1)(a) of the TNVAT Act
The court examined the term "determine" in the context of Section 27(1)(a) of the TNVAT Act, referring to various judgments and legal dictionaries. The term "determine" implies proceeding to assess and must be done concerning the dealer. The court concluded that the term "determine" means that the assessment process must be initiated concerning the dealer, which happened only on 27.09.2018. Thus, the revised assessment orders were barred by the six-year limitation period.

Conclusion:
The court concluded that the revised assessment orders were barred by limitation as they were determined after the six-year period from the date of assessment had elapsed. The court set aside the impugned assessment orders and allowed the writ petitions, emphasizing that limitation is based on a public law principle that one cannot be kept guessing in eternity. Consequently, the connected miscellaneous petitions were closed, and no costs were ordered.