2019 (8) TMI 1160 - HC - VAT and Sales Tax

Time limit for completion of re-assessment - Section 7-B of the Tamil Nadu Entertainment Tax Act, 1939 - interpretation of statute - HELD THAT - The term re-assessment referred to under Section 43-E (1) of the Act, cannot mean to be a final order of assessment and that a mere issuance of a notice for the re-assessment would constitute the process of re-assessment having been initiated, from which point of time, the limitation prescribed under the section requires to be construed. In the present case pertaining to the years Assessment 2003-2004 and 2004-2005, notices of re-assessment have been issued within the period of five years from the end of the respective assessment years and as such, I do not find any infirmity on the authority of the respondent in having issued these notices - Since the present impugned notices have only called upon the petitioner to give his objections to the proposed difference of taxes, it would be appropriate to grant liberty to the petitioner to submit his objections before the respondent herein in consequence to their impugned notices issued. Petition closed.

Summary

Issues:
Challenge to notice dated 24.02.2012 in Amusement No.001/2003-04 and Amusement No.001/2004-05 for Assessment Years 2003-2004 and 2004-2005 respectively.

Analysis:

1. Issue of Timeliness of Re-assessment Proceedings:
The petitioner contended that re-assessment should be completed within five years as per Rule 43-E(1) of the Tamil Nadu Entertainment Tax Rules, 1939, citing the decision in Kalyankumar Ray Vs. CIT. On the other hand, the Additional Government Pleader argued, referring to Sales Tax Officer and another Vs. Messrs Sudarsanam Iyengar and Sons, that initiation of re-assessment proceedings suffices within the prescribed period. The court noted the distinction between the scope of assessment proceedings under different tax laws, emphasizing that the term "assessment" encompasses the entirety of proceedings and not just the final order of assessment.

2. Interpretation of "Re-assessment" and Initiation of Proceedings:
The court analyzed the definitions of "assessment" and "re-assessment," highlighting that the mere issuance of a notice for re-assessment constitutes the initiation of the process. The judgment underscored that the term "re-assessment" does not equate to a final assessment order but includes the entire proceedings leading to the assessment. Therefore, the notices issued within the five-year period from the end of the assessment years were deemed valid for initiating the re-assessment process.

3. Validity of Impugned Notices and Grant of Liberty to Petitioner:
Considering the arguments and precedents cited, the court found no deficiency in the respondent's authority to issue the impugned notices for re-assessment. The court granted the petitioner the liberty to submit objections to the proposed tax differences within fifteen days from the date of the order. This decision aimed to ensure procedural fairness and allow the petitioner to contest the proposed taxes based on the impugned notices.

In conclusion, the court upheld the validity of the impugned notices for re-assessment, emphasizing the initiation of proceedings within the prescribed timeline and granting the petitioner an opportunity to present objections. The judgment clarified the interpretation of "re-assessment" and affirmed that the issuance of notices marks the commencement of the re-assessment process, aligning with the legal framework and precedents in tax assessment proceedings.