2015 (12) TMI 577 - HC - VAT and Sales Tax

Reassessment - period of limitation - Adjustment of additional tax liability - Adjustment against Incentive limit - Revenue contends that assessee should paid the additional liability as cash - Held that - Nothing is indicated therein as to what was the nature of concealment or incorrect declaration or return furnished by the assessee. A perusal of the order of assessment dated 27.7.2004 clearly shows that the assessing authority at the relevant time had taken into consideration the additional tax payable under section 4A of the Act and had duly computed the tax liability after considering the component of additional tax and had adjusted the same against the exemption limit. Under the circumstances, on the facts as emerging from the record, the Commissioner had no reason to believe that the assessee had concealed any material particulars or had furnished incorrect declaration or return. Therefore, the ingredients of clause (a) of section 44 of the Act are clearly not satisfied. Consequently, the Assessing Authority was not justified in invoking the extended period of limitation under section 44(a) of the Act. The Tribunal, therefore, did not commit any legal error in holding that the reassessment was barred by limitation. Having regard to the fact that the reassessment under section 44 of the Act is itself barred by limitation, it is not necessary to enter into the merits of the other issues adjudicated by the Tribunal. - order of reassessment has been held to be time barred, it is not necessary to enter into the merits of the other questions proposed by the appellant - Decided against Revenue.

Summary

Issues involved:
Challenge to order under Gujarat Value Added Tax Act, 2003 - Reassessment order time-barred - Liability of additional tax adjustment against incentive limit - Concealment of material particulars - Incorrect declaration - Extended period of limitation under section 44 of the Act.

Analysis:
The appellant State of Gujarat challenged an order passed by the Gujarat Value Added Tax Tribunal, questioning the time-barred reassessment order and the adjustment of additional tax against the exemption limit. The respondent assessee was initially assessed for the calendar year 2000, with a subsequent reassessment raising a demand due to non-cash payment of additional tax. The Tribunal allowed the appeal, citing the reassessment under section 44 of the Gujarat Sales Tax Act, 1969 as time-barred.

The Assistant Government Pleader argued that the reassessment was justified due to the assessee's failure to disclose correct facts, invoking section 44(a) of the Act. However, the respondent's counsel contended that the assessing authority had considered all relevant facts and adjusted the tax against the exemption limit, eliminating the need for extended limitation under section 44(a).

The court analyzed the situation and found that the reassessment initiated beyond five years lacked grounds for invoking the extended limitation period under section 44 of the Act. The assessing authority had already considered the additional tax and adjusted it against the exemption limit, indicating no concealment or incorrect declaration by the assessee. Consequently, the Tribunal's decision on the time-barred reassessment was deemed correct, rendering further discussion on other issues unnecessary.

In conclusion, the court dismissed the appeal, stating that the reassessment being time-barred negated the need to delve into other proposed questions. The judgment emphasized that the reassessment lacked substantial legal questions, given its time-barred nature and the absence of concealment or incorrect declaration by the assessee.