2020 (4) TMI 138 - HC - VAT and Sales Tax

Registration of petitioner - Section 61 of Rajasthan Vat Act - time limitation - HELD THAT - Suffice it to say that the Form-14 notices relied upon by Mr. Mathur, which were issued to the assessee after the survey made in the year 2016, were for the purpose of providing it an opportunity to show cause and adduce evidence against the facts discovered during survey proceedings. It was clearly intimated in these notices that failure to furnish the information/documents without sufficient cause wound render the assessee liable to prosecution and penalty under Section 64 of the Rajasthan Vat Act - Finally, after assessing the entire facts, the Assistant Commissioner, Administration, issued an order dated 13.03.2018 directing initiation of proceedings and registration of a case under Section 61 (2) of the Vat Act against the appellant. It may be noted here that the order dated 13.03.2018 passed by the Assistant Commissioner, Administration, was never assailed by the petitioner in the writ petition. We are totally in conformity with the view expressed by the learned Single Bench that the limitation for initiating proceedings would commence only after the assessing authority arrived at a conclusion regarding the evasion/avoidance of tax - Appeal dismissed.

Summary

Issues:
- Limitation period for initiating proceedings under the Rajasthan Valued Added Tax Act, 2003.
- Validity of notices issued by the Assistant Commissioner, Anti-Evasion, Commercial Taxes Department.
- Interpretation of Section 25(1) of the VAT Act for initiating proceedings against the assessee.
- Compliance with procedural requirements for initiating tax evasion proceedings.

Analysis:
1. Limitation Period for Initiating Proceedings: The appellant contended that the notices issued by the authorities were beyond the statutory limitation period of six months from the date of evasion. However, the court held that the limitation period for initiating proceedings would start only after the assessing authority determined the evasion or avoidance of tax. The notices issued earlier were for procuring relevant records and not for initiating proceedings under Section 25(1) of the VAT Act.

2. Validity of Notices Issued: The court observed that the notices issued to the assessee after the survey in 2016 were for providing an opportunity to present a defense against the discovered facts. Failure to comply with these notices could lead to prosecution and penalties under Section 64 of the Rajasthan VAT Act. The order dated 13.03.2018 directing the initiation of proceedings under Section 61(2) of the VAT Act was not challenged by the petitioner.

3. Interpretation of Section 25(1) of the VAT Act: The court clarified that the notices issued earlier were not under Section 25(1) of the VAT Act but were to procure necessary records for assessment. The decision to initiate proceedings was made after the survey report and recommendations were submitted. The court emphasized that the assessing authority could pass the assessment order within six months from the date of the notice.

4. Compliance with Procedural Requirements: The court found that the impugned judgment and notices did not have any legal flaws that would justify interference. The court upheld the Single Bench's decision that the limitation period for initiating proceedings starts after the assessing authority determines tax evasion. Consequently, the appeal was dismissed for lacking merit, and no costs were awarded.

This detailed analysis of the judgment highlights the key issues addressed by the court regarding the limitation period, validity of notices, interpretation of statutory provisions, and compliance with procedural requirements under the Rajasthan VAT Act.