2022 (1) TMI 1012 - HC - VAT and Sales Tax

Levy of VAT - goods replaced being covered under warranty of the product sold by the petitioner - time limitation - exemption form VAT/Tax sought on the ground that no sale of such goods has taken place and the same has been given to the customer by way of replacement being covered under warranty - HELD THAT - The Court is not inclined to interfere with the order impugned. As far as the issue of legality of the order on the ground of limitation is concerned, we agree with the submissions of the learned counsel for the respondents that the present proceeding, being a statutory proceeding, is covered by limitation and as it is a proceeding under Section 37 of the Act, a period of three (3) years has been prescribed from the date of receipt of the order, which in the present case is 26.10.2018. The Court finds substance in the submission of the learned counsel for the respondents that the matter has to be appreciated only after going through the records and other material documents and evidence, which may have been produced by the petitioner or may be in his possession. Thus, the Appellate Joint Commissioner (CT), Tirupathi, is the forum before which the petitioner is required to agitate the matter by producing all documentary evidence available with him in support of his contention. Writ petition disposed off.

Summary

Issues:
Challenge to order rejecting exemption claim under Andhra Pradesh Value Added Tax Act, 2005 for goods replaced under warranty for 2014-15 and 2015-16; Allegation of passing order beyond prescribed period after remand; Interpretation of limitation period extension during Covid-19; Dispute over missing link in replacement process and evidence of goods being covered under warranty; Appeal process and forum for further redressal.

Analysis:
The writ petition challenges the rejection of an exemption claim under the Andhra Pradesh Value Added Tax Act, 2005 for goods replaced under warranty for the years 2014-15 and 2015-16. The petitioner contends that despite producing all relevant records following a remand order, the impugned order was passed against the law. The petitioner argues that the goods in question were exempted due to being provided to customers as replacements covered under warranty, emphasizing that all necessary details justifying the exemption claim were submitted to the authorities. Additionally, the petitioner highlights a procedural flaw, asserting that the order was passed after the prescribed period following a remand, rendering it invalid.

Regarding the issue of limitation, the respondents argue that the Assessment Authority had the power to pass an order within three years as per Section 37 of the Act, citing a Supreme Court judgment extending the limitation period during the Covid-19 period. The respondents maintain that the impugned order was issued within the extended timeframe, complying with statutory provisions. On the merits of the case, the respondents point out a missing link in the replacement process, questioning the evidence of goods being covered under warranty. They argue that crucial information, such as transportation details and customer names, was lacking, leading to the conclusion that the goods were indeed sold rather than replaced under warranty.

In response, the petitioner disputes the observations made by the authorities, asserting that all necessary details were provided. However, the respondents counter that such contentions were not raised in the affidavit and suggest that the matter involves voluminous evidence that should be presented before the Appellate Joint Commissioner for proper evaluation. The Court, after considering the submissions, declines to interfere with the impugned order. It concurs with the respondents on the legality of the order concerning the limitation period and directs the petitioner to pursue the appeal process before the Appellate Joint Commissioner in Tirupathi, allowing the petitioner to avail the remedy of appeal within the specified timeframe.

Ultimately, the writ petition is disposed of with liberty granted for the petitioner to appeal before the Appellate Joint Commissioner. The Court clarifies that it has not expressed any opinion on the factual merits of the case. The original certified copy of the impugned order is to be returned to the Registry, retaining a copy for record-keeping purposes. No costs are awarded, and any pending miscellaneous applications are also disposed of accordingly.