2015 (3) TMI 957 - HC - VAT and Sales Tax

Invocation of extended period - Revision of assessment - Held that - Section 34(1) of the Act confers plenary power, upon a Commissioner, to call for the record of any case pending before or disposed of by any taxing authority and satisfy himself as to the legality or propriety of such order or proceeding, insofar as it may be prejudicial to the interest of the State. The first part of second proviso, to section 34(1) of the Act, prohibits exercise of this power after expiry of three years, from the date of supply of a copy of such order, to the assessee. The second part of second proviso, to section 34(1) of the Act, however, provides that power under section 34(1) of the Act may be exercised after expiry of the period of three years, in case of retrospective legislation, if an order is passed by the Tribunal, or an order is passed by the High Court or the Supreme Court of India. Admittedly, the order in Food Corporation of India's case 2009 (3) TMI 951 - PUNJAB AND HARYANA HIGH COURT settled a controversy relating to incidental charges. The fact that the Department held a similar view or that similar orders were passed before the judgment in Food Corporation of India's case 2009 (3) TMI 951 - PUNJAB AND HARYANA HIGH COURT , is irrelevant. The controversy with respect to incidental charges was finally settled by the High Court and, therefore, entitled the Commissioner to exercise power to revise an assessment even after expiry of the period of three years. The Tribunal's finding that as order could have been revised without waiting for the High Court, is based upon a misreading of the nature of power, conferred by the second part of the second proviso to section 34(1) of the Act. It would, therefore, be necessary to reiterate that power under section 34(1) of the Act to revise an assessment order has to be exercised within three years but where there is, a change in law, a decision of a Tribunal in a similar case or a declaration of law by the High Court or the honourable Supreme Court of India the power may be exercised after expiry of the period of three years. The fact that the Department may have held a similar view, that has been upheld by the honourable Supreme Court or the High Court, shall not impede the exercise of this power. The power, however, has to be exercised within reasonable time , which, depending upon the facts, would vary from case to case. - appeal is allowed, the impugned order is set aside and the matter is remitted to the Tribunal - Decided in favour of Revenue.

Summary

Issues:
1. Condonation of delay in filing an appeal due to administrative exigencies.
2. Legality of an order passed by the Haryana Tax Tribunal regarding reassessment under the Haryana Value Added Tax Act, 2003.

Issue 1: Condonation of Delay in Filing an Appeal:
The appellant sought condonation of a 139-day delay in filing an appeal, attributing it to administrative exigencies involving obtaining comments of the Assessing Officer, legal advice, and permission from the Principal Secretary. The respondent argued that administrative delays should not be considered sufficient cause for condonation. The court, after hearing both parties and examining the application, found the administrative exigencies to be valid reasons for the delay and allowed the application, thereby condoning the delay in filing the appeal.

Issue 2: Legality of the Order by Haryana Tax Tribunal:
The State of Haryana challenged an order by the Haryana Tax Tribunal regarding reassessment under the Haryana Value Added Tax Act, 2003. The Tribunal had set aside the assessment order, citing that the Department's consistent view on incidental charges being part of turnover did not justify invoking the extended period for reassessment. The State argued that the Tribunal's decision was legally flawed as the power to revise an assessment under the Act could be exercised beyond three years in specific circumstances, such as a change in law or a court decision. The State contended that the Department's prior view upheld by the High Court was sufficient to invoke the power for reassessment.

The court analyzed the provisions of Section 34(1) of the Act, emphasizing that the power to revise an assessment should be exercised within three years unless specific exceptions, like a change in law or a court decision, occur. The court disagreed with the Tribunal's interpretation that the Department's prior view prevented the reassessment after three years. It clarified that the power to revise could be exercised post three years based on specific events, irrespective of the Department's previous stance. The court highlighted that the Tribunal's finding was based on an incorrect interpretation of the Act and reiterated that the power for reassessment could be invoked after three years in certain circumstances, even if the Department held a similar view earlier.

In conclusion, the court allowed the appeal, set aside the Tribunal's order, and remitted the matter back to the Tribunal for a fresh decision in accordance with the law. The parties were directed to appear before the Tribunal on a specified date for further proceedings.

This detailed analysis covers the issues of condonation of delay in filing an appeal and the legality of the order by the Haryana Tax Tribunal, providing a comprehensive understanding of the judgment delivered by the Punjab and Haryana High Court.