2019 (10) TMI 487 - HC - VAT and Sales Tax

Recovery of arrears of Sales Tax - time limitation - Section 17(6) of the KGST Act - whether any obligation to pass fresh assessment orders for the years 1999-00 and 2000-01, was cast upon the first respondent on the basis of the directions contained in Exts. P7 and P8 judgments? - HELD THAT - The petitioner cannot contend that the directions contained in Ext.P7 judgment was applicable for the assessment years 1999-00 and 2000-01 also. Hence, the contentions put forward by the petitioner, based on Exts.P7 and P8 judgments, are without substance and hence rejected. Whether Ext.P9 assessment order for the year 1999-00 is bad for the reason that the exemption available to rubble till January, 2000 was not taken into consideration by the assessing authority? - HELD THAT - The assessee having failed to produce the requisite documents for the purpose of claiming exemption and having preferred an appeal against the assessment order, cannot be heard to contend that the assessment order was bad for the reason that a particular exemption was not taken into consideration by the assessing authority - the exemption claimed by the petitioner was not available through out the assessment year 1999-00. A reading of Section 17(6) shows that the section casts a liability on the assessing officer to complete the assessment within a period of four years from the expiry of the year to which the assessment relates. Completion of the assessment does not mean communication of the order of assessment. Ext.P10 assessment was completed on 28.03.2006 and not on 23.09.2013 or even 4.09.2006, as contended by the petitioner - In this context, it may be pertinent to consider the amendment brought to the KGST Act, by virtue of the Finance Act, 2005. Neither Ext.P11 nor any of the decisions therein lays down the position that an assessment order would be completed only on the order being served on the assessee. Hence, the contention that Ext.P10 order was issued beyond time, is liable to be rejected. There are no sustainable ground of challenge against Ext.P13 or any valid reason for granting the reliefs sought in the writ petition - petition dismissed.

Summary

Issues:
1. Validity of assessment orders for the years 1999-00 and 2000-01.
2. Legality of revenue recovery proceedings initiated based on the assessment orders.
3. Compliance with the limitation period for completing the assessment under Section 17(6) of the Kerala General Sales Tax Act, 1963.

Issue 1: Validity of Assessment Orders for 1999-00 and 2000-01:
The petitioner contended that the assessment for the year 2000-01 was completed beyond the limitation period, rendering it invalid. However, the court noted that the assessing authority was unable to ascertain the materials used due to lack of documentation and rejected the return, estimating the turnover. The petitioner's claim for exemption for rubble was not allowable for the entire assessment year. Regarding the assessment for 1999-00, the petitioner argued that the exemption for rubble was lifted only in January 2000, and the assessing authority failed to consider this exemption. The court held that the petitioner's failure to produce necessary documents and the appellate dismissal of the appeal against the 1999-00 assessment order precluded the challenge on grounds of exemption consideration.

Issue 2: Legality of Revenue Recovery Proceedings:
The petitioner challenged the revenue recovery proceedings initiated based on the assessment orders. The court examined the directions in previous judgments and found that the obligation to pass fresh assessment orders for 1999-00 and 2000-01 was not applicable based on those judgments. The petitioner's contentions relying on these judgments were deemed unsubstantiated and rejected. Therefore, the challenge against the revenue recovery proceedings was dismissed.

Issue 3: Compliance with Limitation Period under Section 17(6) KGST Act:
The principal contention was the validity of the Ext.P10 assessment order for 2000-01, issued beyond the four-year period prescribed in Section 17(6) of the KGST Act. The petitioner argued that the order was served beyond the limitation period, rendering it null and void. However, the court observed that the assessment was completed within the time provided by the fifth proviso to Section 17(6), as amended by the Finance Act, 2005. The court also highlighted that the petitioner failed to raise the limitation issue before the appellate authority, precluding its consideration in the writ petition. Therefore, the court found no grounds to challenge Ext.P13 or grant the reliefs sought in the writ petition, ultimately dismissing the petition.

In conclusion, the court upheld the validity of the assessment orders, rejected challenges against revenue recovery proceedings, and found no merit in the limitation period argument, leading to the dismissal of the writ petition.