2024 (6) TMI 610 - HC - VAT and Sales Tax

Limitation period for assessment order u/s 23(2) of the MVAT Act - personal hearing despite petitioner seeking a personal hearin not provided - violation of principles of natural justice - whether the impugned assessment order under sub-section (2) was made within a period of four years from the end of the year containing the period to which return relates? - HELD THAT - The petitioner has made a very categorical statement that the order available in SAP system also indicates that the order was signed digitally by respondent no. 3 only on 23rd June 2020 and SAP system does not show any order dated 19th March 2020. There is no response filed to the said rejoinder by the said Sambhaji Kisan Yadav - He has not explained why he could not have served the same order which was allegedly digitally signed by him on 19th March 2020 and why a fresh digital signature had to be put on 23rd June 2020. It is also pertinent to note that the order which he had served by email on 24th June 2020 in the reference states 2020-21. Therefore, it is obvious that both are different documents. In view thereof, the only conclusion that can be arrived at is the order which has been made is dated 23rd June 2020. In the affidavit in rejoinder, it is categorically stated that even the MVAT portal shows only this order of 23rd June 2020 and there is no order of 19th March 2020. The impugned assessment order having been passed after expiry of four years from the end of the year containing period to which return relates, is not a valid order and same is quashed and set aside. Petition allowed.

Summary

Issues Involved:
1. Limitation period for assessment order u/s 23(2) of the MVAT Act.
2. Non-grant of personal hearing.
3. Applicability of sub-section (5A) of Section 23 of the MVAT Act.

Summary:

1. Limitation Period for Assessment Order u/s 23(2) of the MVAT Act:
The petitioner, a dealer registered under the MVAT Act, challenged the assessment order and notice of demand issued by the Deputy Commissioner of State Tax on the grounds of limitation. The petitioner argued that u/s 23(2) of the MVAT Act, no order of assessment shall be made after the expiry of four years from the end of the year containing the period to which the return relates. The return related to the financial year 2015-16, and thus, the limitation period expired on 31st March 2020. The impugned order was digitally signed on 23rd June 2020, which the petitioner contended was beyond the limitation period. The respondent claimed the order was passed on 19th March 2020, but the digital signature for service was placed on 23rd June 2020. The court found that the SAP system records indicated the order was created and modified on 23rd June 2020, and no order dated 19th March 2020 existed in the system. Consequently, the court held that the assessment order was time-barred and quashed it.

2. Non-grant of Personal Hearing:
The petitioner asserted that the principles of natural justice were violated as no personal hearing was granted despite requests. The respondent presumed that due to the Covid period, no personal hearing was given. The court noted that a virtual hearing could have been provided and highlighted the importance of adhering to natural justice principles.

3. Applicability of Sub-section (5A) of Section 23 of the MVAT Act:
The petitioner argued that the assessment order was invalid as it was not preceded by an intimation u/s 23(5A) of the MVAT Act. The respondent countered that sub-section (5A) was not applicable as it pertains to cases where the assessment proceedings are fit for closure on filing a revised return. Given the court's finding on the limitation issue, it did not delve into the applicability of sub-section (5A).

Conclusion:
The court quashed the impugned assessment order and notice of demand as they were issued beyond the prescribed limitation period. The rule was made absolute in terms of prayer clause (c), which sought to quash and set aside the order and notice of demand.