2025 (1) TMI 930 - HC - VAT / Sales Tax

Time limitation for completion of assessment - assessment completed on 30.11.2018 for the assessment year 2013-2014 was barred by the limitation period prescribed under Section 17 (6) of the Kerala General Sales Tax Act (KGST Act) or not - notice not issued - HELD THAT - It was imperative on the part of the revenue to issue a notice or communicate the order of the Deputy Commissioner to the assessee before the expiry of the original period of limitation contemplated under Section 17 (6) of the KGST Act if it intended to extend the period of completion of assessment by a further period of one year as provided under Section 17 (7) of the KGST Act. This not having been done the findings arrived at by the appellate tribunal agreed that the assessment completed on 30.11.2018 was barred by limitation. The S.T. Revision therefore fails and is accordingly dismissed.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the assessment completed on 30.11.2018 for the assessment year 2013-2014 was barred by the limitation period prescribed under Section 17 (6) of the Kerala General Sales Tax Act (KGST Act).
Whether the extension of the assessment period by the Deputy Commissioner under Section 17 (7) of the KGST Act was valid without communication to the assessee before the expiry of the original limitation period.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Limitation Period for Assessment Completion

Relevant Legal Framework and Precedents: Section 17 (6) of the KGST Act mandates that an assessment must be completed within four years from the end of the relevant assessment year. The assessment year in question is 2013-2014, which ended on 31.3.2014, thus requiring completion by 31.3.2018.
Court's Interpretation and Reasoning: The court noted that the assessment was not completed by the deadline of 31.3.2018. The tribunal found that the extension of the assessment period was not effectively communicated to the assessee.
Key Evidence and Findings: The tribunal found no material evidence showing that the extension order was communicated to the assessee before the expiry of the original period.
Application of Law to Facts: The court applied the statutory requirement of communication of the extension to the assessee and found that this was not adhered to.
Treatment of Competing Arguments: The revenue argued that they had obtained permission for extension, but the tribunal emphasized the necessity of communication to the assessee.
Conclusions: The assessment completed on 30.11.2018 was barred by limitation as the extension was not communicated to the assessee.

Issue 2: Validity of Extension under Section 17 (7) of the KGST Act

Relevant Legal Framework and Precedents: Section 17 (7) of the KGST Act allows for an extension of the assessment period by the Deputy Commissioner. The decisions in S. Najeem and State of Kerala v. Abhilash T. Mathew were considered for precedents.
Court's Interpretation and Reasoning: The court agreed with the tribunal's reasoning that the extension order must be communicated to the assessee to be valid.
Key Evidence and Findings: The tribunal found that the Deputy Commissioner's order was not communicated to the assessee, nor was any notice issued regarding the extension.
Application of Law to Facts: The court found that the lack of communication invalidated the extension of the assessment period.
Treatment of Competing Arguments: The revenue's argument regarding the extension was dismissed due to the lack of communication to the assessee.
Conclusions: The extension of the assessment period was not valid due to the absence of communication to the assessee.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: "It was imperative on the part of the revenue to issue a notice or communicate the order of the Deputy Commissioner to the assessee before the expiry of the original period of limitation contemplated under Section 17 (6) of the KGST Act."
Core Principles Established: The necessity of communication to the assessee for the validity of an extension of the assessment period under Section 17 (7) of the KGST Act.
Final Determinations on Each Issue: The court upheld the tribunal's decision that the assessment was barred by limitation and dismissed the revenue's revision petition, ruling in favor of the assessee.

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