2023 (3) TMI 1065 - HC - VAT and Sales Tax

Time Limitation - Levy of penalty - suo-moto revision initiated by the respondent no. 3 was much after expiry of the period of limitation as prescribed under Sections 33 and 74 of the TVAT Act, 2004 - HELD THAT - The respondent no. 4 after verification of the relevant documents of the petitioner had completed the assessment by assessment order dated 24.03.2015. From the face of the record, it is apparent that the respondent no. 4 on 10.07.2020 i.e. after elapse of more than five years had issued a notice under Section 70(1) of the TVAT Act, upon the petitioner wherein the petitioner was asked to appear in person or by his authorized representative and to explain as to why the assessment shall not be cancelled or modified. As per sections 33 of 74 of the TVAT Act, 2004, the issuance of notice after elapse of five years is barred by limitation. This court prima facie on perusal of the proceeding dated 27.10.2020, order which is impugned herein, this court expresses its concern that the revisional authority has not passed any speaking order and has not dealt with the issues allowing the discounts and to say that the amounts discounted are fictitious. Without entering into the merit of the case, the case is remanded back to the revisional authority to decide the matter afresh by passing a speaking order. It is also open for the petitioner to raise all his objections including the issue of jurisdiction and also to place any judgment in support of his contentions before the revisional authority. Petition disposed off.

Summary

Issues Involved:
The issues involved in the judgment are the legality of notices and orders issued by the respondent, the validity of the assessment order, the imposition of penalty, and the dismissal of the revision application.

Validity of Notices and Orders:
The petitioner challenged the notices dated 10.07.2020 and 27.10.2020, as well as the order dated 25.09.2020 issued by the respondent no. 3. The respondent no. 3 set aside the assessment order dated 24.03.2015, which was completed by the respondent no. 4 under Section 31(1) of the TVAT Act, 2004. The petitioner argued that the notices and orders were illegal and passed without proper consideration. The respondent no. 3 issued a notice after the expiry of five years, which was beyond the limitation period prescribed by the TVAT Act, as per Sections 33 and 74. The court found that the revisional authority did not pass a speaking order and remanded the case back for a fresh decision.

Imposition of Penalty:
After the assessment order was set aside, the respondent no. 3 issued a show-cause notice to the petitioner regarding the imposition of a penalty. The petitioner submitted replies and objections, but the revisional authority proceeded with the penalty imposition without considering the petitioner's submissions. The court observed that the revisional authority did not address the issues raised by the petitioner, particularly regarding discounts and fictitious figures. The court remanded the case back to the revisional authority to decide the matter afresh in a speaking order, allowing the petitioner to present objections and supporting judgments.

Dismissal of Revision Application:
The revisional authority dismissed the revision application filed by the petitioner, upholding the assessment order dated 09.11.2020 passed by the respondent no. 4. The authority concluded that the petitioner had not offered any discount and had inserted fictitious figures to evade tax liability. However, the court expressed concerns about the lack of a detailed explanation in the revisional authority's order and remanded the case back for a fresh decision, instructing the authority to pass a speaking order considering all objections raised by the petitioner.