2019 (9) TMI 173 - HC - VAT and Sales Tax

Input tax credit - deemed assessment under Section 22(2) of TNVAT Act - sub-sections (1) and (2) of Section 27 of TNVAT Act - time limitation - HELD THAT - The arguments advanced by learned Revenue Counsel, may have become acceptable if the first revisional noticed dated 26.09.2017 had not culminated in a revised assessment order after obtaining objections from the writ petitioner dealer. The fundamental and cardinal principle in limitation is that the remedy is barred, but the right is not extinguished. If the rival pleas are tested using this cardinal principle as touchstone, it emerges clearly that if the rights to revise the assessment order is construed as a statutory right under TNVAT Act, the rights do not get extinguished, but the proceedings cannot be commenced after the period of limitation. This Court is left with the considered view that it would be appropriate to set aside the impugned order, but direct the respondent to redo the revised assessment based on the first revisional notice without adding any material or without adding new points to the same. Impugned order set aside - respondent is directed to redo the second revised assessment order - petition allowed by way of remand.

Summary

Issues Involved:
Limitation period for revised assessment order under TNVAT Act.

Analysis:
The judgment concerns a writ petition under the Tamil Nadu Value Added Tax Act, 2006 (referred to as TNVAT Act). The petitioner, a dealer under the TNVAT Act, had filed monthly returns and undergone deemed assessment. Subsequently, revisional notices were issued, leading to a revised assessment order dated 24.07.2019, which was challenged in the petition.

The primary issue addressed in the judgment revolves around the limitation period for making the revised assessment order. The petitioner argued that the order was time-barred as it pertained to Assessment Year 2010-11, and the limitation period had expired on 29.06.2018. The respondent contended that the order was within the prescribed six-year period as it was based on the first revisional notice issued on 26.09.2017.

The court examined the arguments presented by both parties and emphasized the principle that while the remedy might be barred by limitation, the right is not extinguished. It was noted that the rights to revise an assessment order do not get extinguished but proceedings cannot commence after the limitation period. Consequently, the court decided to set aside the impugned order and directed the respondent to redo the revised assessment based on the first revisional notice without introducing new points.

In conclusion, the court ordered the setting aside of the impugned order to enable the revised assessment to be redone based on the initial revisional notice and dealer's reply. The respondent was instructed to complete the revised assessment within 12 weeks and communicate the decision to the petitioner in accordance with TNVAT Act rules. The writ petition was disposed of with these directions, and no costs were awarded in the matter.