2018 (3) TMI 979 - HC - VAT and Sales Tax

Assessment of escaped turnover - Time limitation - whether the provisions contained in sub-section (1) of Section 25 of the Act as amended from 01.04.2017, could be availed of by the competent authority for assessing the escaped turnover of the dealers under the Act for the year 2011-12? - Held that - prior to the Finance Act, 2017, the time limit prescribed for initiating proceedings for assessing the escaped turnover of a dealer under sub-section (1) of Section 25 of the Act was five years - The plain meaning of the words used in the third proviso to subsection (1) of the Act indicates beyond doubt that the period fixed for proceeding to determine the turnover of the dealers which has escaped assessment to tax, which expires on 31.03.2017, has been extended upto 31.03.2018, in terms of the said proviso. In the light of the said provision, the third respondent is certainly entitled to initiate proceedings for assessing the escaped turn over of the petitioner for the year 2011-12 before 31.3.2018. Petition dismissed.

Summary

Issues:
1. Interpretation of the time limit for initiating proceedings for assessing escaped turnover under the Kerala Value Added Tax Act.
2. Applicability of the Finance Act, 2017, on the time limit for assessment.
3. Challenge to the order issued by the assessing authority without jurisdiction.

Analysis:
1. The petitioner contended that the proceedings for assessing the escaped turnover were time-barred as per Section 25 of the Act, which required initiation within five years from the last date of the relevant year. The petitioner argued that the extended period introduced by the Finance Act, 2017, could not be applied retroactively to their case for the assessment year 2011-12, as the statutory period had already expired before the Finance Act came into effect.

2. The Government Pleader argued that the time limit for initiating proceedings had been extended up to 31.3.2018 by the third proviso to Section 25 of the Act, introduced under the Finance Act, 2017. The Government Pleader contended that this extension rendered the petitioner's plea of limitation baseless, allowing the assessing authority to proceed with the assessment beyond the original deadline.

3. The court examined the contentions and highlighted the amendment to Section 25 of the Act post the Finance Act, 2017. The court emphasized that the provision clearly extended the period for assessing escaped turnover up to 31.03.2018, enabling the assessing authority to proceed with the assessment for the petitioner's case for the year 2011-12. The court noted that since the petitioner did not challenge the relevant provision, and considering the unambiguous nature of the provision, the petitioner's argument lacked merit.

4. Additionally, the court referenced a previous judgment by the Apex Court in a similar context under the Central Sales Tax Act. The court cited the judgment to support its decision that the introduction of an extended period for assessment does not necessarily apply retroactively to cases where the original limitation period had expired before the amendment. By drawing parallels with the Apex Court's decision, the court dismissed the writ petition, concluding that the petitioner's challenge lacked merit and subsequently dismissed the petition.

This detailed analysis of the judgment from the Kerala High Court provides a comprehensive overview of the issues involved, the arguments presented by both parties, and the court's reasoning leading to the dismissal of the petition.