2022 (5) TMI 554 - SCH - VAT and Sales Tax

Validity of order of reassessment - time limitation - whether the reassessment was possible only under Section 21(3) of the Value Added Tax Act, 2005 within one calendar year from the concerned year? - HELD THAT - There is no manner of doubt that the appellants had specifically raised preliminary objection before the assessing officer that the proposed action had become time-barred and hence notice under Section 21(7) of the VAT Act issued to the appellant(s) by the authority was illegal and unjust being void ab initio. The assessment order passed by the competent authority, however, does not deal with this contention at all. That grievance had been made by way of writ petition, as the issue of limitation would go to the root of the matter being bordering on jurisdiction and authority of the officer concerned. The Single Judge accepted the said grievance of the appellant(s), as can be discerned from the observations in paragraph 34 of the judgment and answered the same in favour of the appellant(s). As the issue regarding limitation goes to the root of the matter, it could be taken as preliminary objection before the competent authority and the competent authority was under obligation to answer the same one way or the other. That being the grievance in the writ petition, the learned Single Judge justly addressed the said objection and answered it in favour of the appellants. Whether the view taken by the learned Single Judge on the said contention is tenable or otherwise ought to have been examined by the Division Bench on its own merits. The parties are relegated before the Division Bench of the High Court for reconsideration of the restored/remanded writ appeal(s) on its own merits and in accordance with law.

Issues involved:
1. Reassessment under Section 21(3) of the Value Added Tax Act, 2005.
2. Maintainability of proceedings and jurisdictional issue.
3. Examination of limitation as a preliminary objection.
4. Applicability of statutory remedy of appeal.
5. Division Bench's disagreement with Single Judge's decision.
6. Setting aside the impugned judgment and order for reconsideration.
7. Directions for parties to appear before the Division Bench of the High Court.

Detailed Analysis:

1. Reassessment under Section 21(3) of the Value Added Tax Act, 2005:
The judgment pertains to appeals challenging a decision of the Division Bench of the High Court that reversed the Single Judge's ruling on the reassessment under Section 21(3) of the Value Added Tax Act, 2005. The Single Judge held that the reassessment was only possible within one calendar year from the concerned year, and the impugned reassessment order lacked authority of law. However, the Division Bench viewed the issue as a matter of maintainability that should have been raised earlier in the proceedings.

2. Maintainability of proceedings and jurisdictional issue:
The Division Bench considered the issue raised by the appellant as one of maintainability that should have been raised at the notice stage and not after the assessment order was passed. The Single Judge's decision favored the appellant's contention that the reassessment was time-barred and, therefore, the notice issued was illegal. The Division Bench disagreed with the Single Judge, emphasizing the need for the appellant to take recourse to the statutory remedy of appeal.

3. Examination of limitation as a preliminary objection:
The Single Judge addressed the appellant's objection regarding limitation as it was crucial to the jurisdiction and authority of the officer concerned. The Single Judge accepted the appellant's grievance, which was not dealt with in the assessment order. The Division Bench, however, opined that the Single Judge should not have delved into the matter further and that the issue should have been raised in an appeal.

4. Applicability of statutory remedy of appeal:
The Division Bench held that the appellant should have pursued the statutory remedy of appeal instead of seeking relief through a writ petition. The Single Judge's decision to consider the limitation issue was deemed unnecessary by the Division Bench, which suggested that the matter should have been examined in an appeal.

5. Division Bench's disagreement with Single Judge's decision:
The Division Bench disagreed with the Single Judge's decision to address the limitation issue in the writ petition, stating that the matter should have been raised in an appeal. The Single Judge's examination of the limitation issue was considered unnecessary by the Division Bench.

6. Setting aside the impugned judgment and order for reconsideration:
The Supreme Court set aside the impugned judgment and order, directing the parties to appear before the Division Bench of the High Court for reconsideration of the writ appeals on their merits and in accordance with the law. The Court emphasized that all contentions available to both sides were left open for further examination.

7. Directions for parties to appear before the Division Bench of the High Court:
The Supreme Court directed the parties to appear before the High Court for the remanded writ appeals on a specified date, allowing the High Court to proceed with the hearings or assign a suitable date for expeditious disposal. The appeals were disposed of accordingly, and pending applications were also addressed.

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