2013 (4) TMI 584 - HC - VAT and Sales Tax

Revisional jurisdiction under Section 20(1) - After six years from the date of order of assessment - Consignment sales as fictitious - Provisional assessment - Disallowing claim for exemption - Period of limiation - Held that - In HYDERABAD INSULATED WIRES (P) LTD v. COMMISSIONER OF COMMERCIAL TAXES, HYDERABAD 1990 (10) TMI 340 - ANDHRA PRADESH HIGH COURT , a Division Bench of this Court held that it is impermissible to levy additional tax under Section 5-A of the GST Act in exercise of revisional powers by the Commissioner when such levy of additional tax was not all proposed by the Deputy Commissioner in the revision notice issued to the assessee; In COMMISSIONER OF INCOME TAX V. ALAGENDRAN FINANCE LTD , the Commissioner of Income Tax 2007 (7) TMI 304 - SUPREME Court , while exercising revisional powers under Section 263 of the Income Tax Act, 1961, reopened on 29.3.2004, the orders of assessment only in relation to the issue of lease equalization fund which was not subject of the re-assessment proceedings dated 28.3.2002 ( in respect of some other issues ). The Supreme Court held that, the period of limitation provided for under sub-section (2) of section 263 of the Act would begin to run from the date of orders of the assessment and not from the order of re-assessment dated 28.3.2002 and the revisional jurisdiction, invoked by the Commissioner of Income Tax was beyond the period of two years ( at that time ) from the end of the financial year in which the order sought to be revised was passed, and was wholly without jurisdiction and a nullity. We respectfully follow the above two decisions and hold that the very proposal of the respondent are wholly without jurisdiction and barred by limitation prescribed under sub- section (3) of Section 20 of the GST Act as the respondent clearly intended to re-assess the appellant for the assessment year 2000-01, thereby interfering with the order of assessment dated 15.3.2003 of the Deputy Commissioner (CT), Abids while purporting to revise the order dated 28.2.2007 of the Additional Commissioner (CT) Legal, A.P. - Accordingly, the Special Appeal is allowed.

Summary

Issues Involved:
1. Jurisdiction of the respondent to undertake a second revision of assessment.
2. Validity of the second revision notice and order based on fresh investigations.
3. Compliance with the limitation period prescribed for revisions under the GST Act.

Detailed Analysis:

1. Jurisdiction of the Respondent to Undertake a Second Revision of Assessment:
The appellant contended that the respondent's order amounts to a second revision of assessment for the same year, which is prohibited by law. The respondent, however, argued that he had jurisdiction to revise the order under section 20 of the GST Act read with section 9(2) of the CST Act. The court noted that the respondent's power to revise is valid if it does not constitute a second revision by the same authority. The court found that the respondent was, in fact, revising the original assessment order dated March 15, 2003, under the guise of revising the Additional Commissioner's order dated February 28, 2007. This was deemed impermissible as it effectively constituted a reassessment rather than a revision.

2. Validity of the Second Revision Notice and Order Based on Fresh Investigations:
The respondent issued a show-cause notice on May 11, 2009, based on fresh investigations conducted in 2007-08 and 2008-09, which revealed defects in the F forms submitted by the appellant. The court held that the respondent's actions amounted to a reassessment of the appellant's transactions, which is not permissible under the law. The court emphasized that revisional power should be exercised to correct errors in the original assessment, not to conduct a fresh investigation or reassessment.

3. Compliance with the Limitation Period Prescribed for Revisions Under the GST Act:
Section 20(3) of the GST Act prescribes a four-year limitation period for revisions of assessment orders. The respondent issued the show-cause notice on May 11, 2009, more than six years after the original assessment order dated March 15, 2003. The court found that the respondent's revision was clearly barred by the statute of limitations. The court cited precedents, including Hyderabad Insulated Wires (P) Ltd. v. Commissioner of Commercial Taxes and Commissioner of Income-tax v. Alagendran Finance Ltd., to support its conclusion that the revision was time-barred and without jurisdiction.

Conclusion:
The court concluded that the respondent's proposal and the consequential order dated July 13, 2010, were wholly without jurisdiction and barred by the limitation prescribed under section 20(3) of the GST Act. The Special Appeal was allowed, and the impugned order was set aside. No costs were awarded.