2021 (2) TMI 812 - HC - VAT and Sales Tax

Period of limitation for completion of assessment in remand proceedings - Vires of Section 9(2)(g) of the Delhi Value Added Tax Act, 2004 - notice of default assessment of tax and interest as well as notice of assessment of penalty - Section 34 of the DVAT Act - HELD THAT - The assessment had to be completed within a period of four years. The impugned order relates to the year 2010-11 for which limitation expired on 31st March, 2015. The date of the impugned order is 15th January, 2021, which indicates that the same is ex-facie barred by limitation. We are not impressed with the submission advanced by Mr. Satyakam that the impugned order is within limitation in terms of Sub-section (2) of Section 34. The said provision is entirely inapplicable in the present facts and circumstances. The impugned order has not been passed in consequence of, or to give effect to, any decision of this court which requires the re-assessment of the Assessee/Petitioner. Further, it may be noted that this Court, while disposing of the miscellaneous application vide order dated 17th January, 2020, could not have extended the period of limitation contrary to the statute. On a plain reading of the same, it is evident that this Court only permitted the Respondents to take recourse to further proceedings consistent with the extant laws and the law laid down by this Court in the judgment noted therein. This liberty cannot be construed to mean that the limitation period was extended beyond statutory confines. The contention of the Respondents is untenable. In the present case, the notice is clearly barred by limitation in terms of Section 34 of the DVAT Act and accordingly, we have no hesitancy in setting aside the same on the ground of limitation. Petition allowed - decided in favor of petitioner.

Summary

Issues:
- Challenge to notice of default assessment of tax and interest under DVAT Act, 2004
- Impugning the order on the ground of limitation

Analysis:

1. Challenge to notice of default assessment of tax and interest under DVAT Act, 2004:
The petitioner had approached the court challenging the vires of Section 9(2)(g) of the DVAT Act, 2004, along with notices of default assessment of tax and interest. The earlier petition in a related matter was allowed in favor of the petitioner. Subsequently, the respondents passed a new order of default assessment, which was impugned in the present writ petition. The primary ground for challenging this order was that it was barred by limitation. The respondents defended the order, stating it was within limitation as per Section 34 of the DVAT Act. The court examined the relevant provisions and previous orders granting liberty to the respondents. The court noted that the impugned order was passed beyond the statutory limitation period, as it related to the year 2010-11, and the limitation had expired by March 31, 2015. The court found the contention of the respondents untenable and set aside the notice on the ground of limitation.

2. Impugning the order on the ground of limitation:
The court analyzed Section 34 of the DVAT Act, which sets out the limitation period for assessment and reassessment. The provision specifies a four-year limitation period, extendable to six years in cases of concealment or failure to disclose material particulars. The court observed that the impugned order, dated January 15, 2021, was clearly beyond the four-year limitation period for the relevant year. The court rejected the argument put forth by the respondents that the order was within limitation as per a different subsection of Section 34, emphasizing that the order was not in consequence of any decision requiring reassessment. The court held that the liberty granted in previous orders did not extend the limitation period beyond statutory limits. Consequently, the court allowed the writ petition, quashing the impugned order dated January 15, 2021.

This detailed analysis of the judgment highlights the issues involved, the arguments presented by both parties, the relevant legal provisions, and the court's reasoning leading to the decision to set aside the impugned order on the ground of limitation.