2024 (1) TMI 1083 - HC - VAT and Sales Tax

Validity of assessment proceedings - time limitation - HELD THAT - Section 9(2) of the Central Sales Tax Act, 1956 makes the provisions of the relevant state sales tax law applicable to proceedings for assessment, reassessment, recovery and enforcement . Therefore, the provisions of the TNVAT Act become applicable. Section 27 of the TNVAT Act enables the Tax Department to undertake reassessment in respect of escaped assessment of tax provided such reassessment is undertaken within six years from the date of assessment. Sub-section (2) of Section 22 of the TNVAT Act provides for deemed assessment. The proviso thereto prescribes that assessment shall be deemed to have taken place on 30.06.2012 with regard to specific assessment years, including assessment years 2006-2007 and 2007-2008, with which we are concerned. The question of limitation should be determined on the basis that the limitation period is six years from the date of assessment. Assessment year 2006-2007 - HELD THAT - The respondent relies on pre-assessment notice dated 19.11.2012. Although the pre-assessment notice bears an endorsement, on the basis of the said endorsement, it is not possible to ascertain as to who acknowledged receipt. The said endorsement does not contain the name of the person who purportedly acknowledged receipt or bear the rubber stamp of the petitioner. It should also be noticed that the reminder notice dated 12.07.2018, which appears to be the next notice for the relevant assessment year, was issued after the period of limitation expired in June 2018. On the basis of documents placed on record in these proceedings and in view of the petitioner's assertion that he did not receive notice dated 19.11.2012, it is concluded that proceedings relating to assessment year 2006-2007 have not been shown to be within the period of limitation prescribed by statute. Proceedings relating to assessment year 2007-2008 - HELD THAT - In the absence of any evidence that the assessee received assessment order dated 16.10.2012 and in the absence of proof of service of any notices within the limitation period of six years computed from 30.06.2012, the assessment order for assessment year 2007-2008 also warrants interference. The writ petitions are allowed.

Summary

Issues:
The petitioner challenges two assessment orders dated 27.03.2019 for assessment years 2006-2007 and 2007-2008, asserting that the assessment proceedings are barred by limitation.

Assessment Year 2006-2007:
The petitioner argues that the assessment should have been initiated within six years from the deemed assessment date of 30.06.2012, as per Section 27(2) of the TNVAT Act. The respondent claims a pre-assessment notice was issued on 19.11.2012, but the petitioner denies receiving it. The absence of proof of receipt and acknowledgment leads to the conclusion that the proceedings for this assessment year are outside the prescribed limitation period.

Assessment Year 2007-2008:
The petitioner contests the assessment order for this year, stating it lacks reference to any prior notices, contravening Section 22(4) of the TNVAT Act. The respondent relies on an assessment order dated 16.10.2012, which was issued within the limitation period. However, the subsequent revised assessment order on 27.03.2019 does not mention any prior notices, raising concerns about the validity of the assessment. The lack of evidence of the petitioner receiving the initial assessment order and the absence of proof of service of any notices within the limitation period from the deemed assessment date indicate that the assessment order for this year also requires review.

Conclusion:
The Court quashes the impugned orders for both assessment years, citing the failure to adhere to the limitation period and the absence of sufficient evidence of notice receipt. The writ petitions are allowed without costs, and connected miscellaneous petitions are closed.