2015 (11) TMI 1495 - HC - VAT and Sales Tax

Challenge to assessment order - Bar of limitation - violation of the principles of natural justice - Held that - there is no explanation for the delay of more than four months caused in issuing the assessment order to the petitioner except stating that due to clerical mistake there has been a delay of four months. Nothing has been stated in detail as to when the order of assessment has been handed over to the dispatch section and who is responsible for such delay. Therefore, we have no hesitation to hold that the order of assessment under Annexure-1 was not made on the date it was purported to have been made. In order to give an impression that the impugned order of assessment was passed within the period of limitation, the order bears the date 18.6.2008 whereas it has been passed much later that. - Decided in favour of assessee.

Summary

Issues:
1. Assessment order under Orissa Value Added Tax Act, 2004 challenged for being barred by limitation and non-compliance with statutory requirements.
2. Determination of whether the assessment order was passed within the prescribed time limit.
3. Examination of whether the assessment order was antedated and passed after the expiration of the limitation period.

Analysis:
The writ petition challenges the assessment order dated 18.6.2008 under the Orissa Value Added Tax Act, 2004, alleging it is barred by limitation and violates natural justice principles. The petitioner, a proprietorship dealing with gunny bags, filed returns for the period from 1.4.2005 to 30.11.2006. The Sales Tax Officer conducted an audit, leading to the assessment order under Section 42 of the Act, imposing a substantial demand and penalty. The petitioner contends the order is time-barred, citing statutory provisions mandating completion of assessment within six months from the Audit Visit Report's receipt. The petitioner argues the order, issued on 18.6.2008, exceeds the one-year limit from the Audit Visit Report's submission on 12.12.2006, rendering it invalid.

The Revenue argues the assessment order was issued within one year of the audit assessment notice, thus complying with the statutory timeframe. However, it is revealed that permission from the Commissioner for a further six-month extension was not obtained as required by law. The Court notes that the assessment order's communication delay to the petitioner, attributed to clerical error, raises doubts about the order's validity. Drawing from precedent, the Court emphasizes the importance of timely communication of assessment orders to prevent revenue loss and suggests initiating departmental proceedings against non-compliant officers.

The Court concludes that the assessment order is indeed time-barred and not compliant with statutory provisions, leading to its quashing. The delay in communicating the order, without a satisfactory explanation, strengthens the decision to invalidate the assessment. The judgment highlights the necessity for strict adherence to legal timelines and procedures in tax assessments to uphold justice and prevent revenue loss.

In summary, the Court's decision revolves around the assessment order's timeliness, compliance with statutory requirements, and the impact of communication delays on the validity of tax assessments under the Orissa Value Added Tax Act, 2004.