2021 (7) TMI 1061 - HC - VAT and Sales Tax

Condonation of delay - sufficient cause - Request for Reopening of assessment order for accepting declarations in Form C - power of authorities to reopen the proceedings after lapse of four years - sufficient cause for delay present or not - Section 21(4) of the Andhra Pradesh Value Added Tax Act, 2005 - HELD THAT - The declaration in Form C or Form F or the certificate in Form E-1 or Form E-II under the AP VAT Act is to be filed within the time frame as envisaged in Rule 12(7) of the Central Sales Tax (Registration and Turnover) Rules, 1957 - A perusal of the said Rule shows that the assessee is required to furnish the declaration in Form C or F or E-1 or E-II within three months after the end of the period for which declaration or the certificate relates, i.e., the Assessment Year. Proviso to the Rule, however, empowers the prescribed authority to permit such declarations/certificates beyond the aforesaid time provided sufficient cause to the satisfaction of the authority is shown. In the present case, the assessee was required to file the forms by June, 2013 but has failed to do so. In the meantime, Assessment Order was passed in 2015 which also was not appealed by the assessee. Only in the year 2020, the assessee had approached the Commissioner to accept the declaration in Form C and reopen the assessment. The Commissioner, however, turned down the prayer with the endorsement that he had no power to reopen the assessment after a lapse of four years - The condition precedent for condonation of such delay is sufficient cause . However, sufficient cause even if shown, may permit the authority to condone the delay but does not authorize the Assessing Authority or the Commissioner to reopen the proceeding. There cannot be any dispute over the proposition that a subordinate legislation cannot alter express statutory provisions. Thus, by no stretch of imagination, Rule 12 (7) can be read to empower the Assessing Authority to reopen the assessment after expiry of the time frame as envisaged under Sub-sections (4) and (5) of Section 21 of the AP VAT Act. In such a situation, the remedy available to an assessee for reopening of the assessment is to prefer an appeal before the appellate forum under Section 31 of the AP VAT Act or a Second Appeal under Section 33 thereof against the appellate order - The expression sufficient cause in Rule 12(7) of the Rules must justify the entire period of delay, i.e., commencing three months beyond the assessment year and not from the date of assessment in view of the amendment to the law in 2005. In the present case, there is hardly any explanation offered with regard to the circumstances which stood in the way of the petitioner/assessee to submit declarations in Form C within the stipulated time. A vague averment has been made that the business had closed down. However, no material particulars are placed on record with regard to the date of such closure - as no sufficient cause has been made out by the petitioner to explain the delay in filing declarations in Form C , we are of the opinion no case for directing to reopen the assessment is made out. Petition dismissed.

Summary

Issues:
Assessment order rejection based on delayed submission of declaration forms; Interpretation of statutory provisions regarding assessment time frame and reopening; Authority's power to condone delay vs. power to reopen assessment; Sufficiency of cause for delay in filing declarations; Abuse of provisions by assessees; Legislative intent behind amendment to submission period.

Detailed Analysis:

1. Assailed Endorsement Rejection:
The petitioner challenged the rejection of declarations in Form 'C' by the 1st respondent in 2020, leading to the refusal to reopen the Assessment Order of 2015 for the Assessment Year 2012-13.

2. Statutory Provisions Interpretation:
The Department argued that reopening proceedings after four years were not permissible under Section 21(4) of the AP VAT Act, emphasizing the time frame for filing required forms.

3. Declaration Time Frame and Authority's Power:
The Rules mandate filing declarations within three months after the end of the relevant period, with authority discretion for extension based on 'sufficient cause.'

4. Assessment Reopening Time Frame:
Section 21 of the AP VAT Act specifies the time limits for assessments, with provisions for scrutiny and wilful tax evasion, allowing assessments within four or six years.

5. Authority's Reopening Power Limitation:
Prescribed authorities can reopen assessments within the stipulated time frames, with no inherent power to revise beyond statutory limits.

6. Delay Condonation vs. Reopening Authority:
While 'sufficient cause' can justify delay condonation, it does not confer authority to reopen assessments, as statutory powers must align with legislative provisions.

7. Judicial Interpretation and Legislative Intent:
Courts may direct reopening in exceptional cases, but stringent criteria must be met, and delay explanations must be substantive, preventing misuse of provisions.

8. Abuse Prevention and Legislative Amendment:
Legislative amendments aim to prevent delays in assessments due to non-compliance, ensuring efficient tax administration without enabling misuse by non-compliant taxpayers.

9. Insufficient Cause and Assessment Reopening:
In the absence of a valid 'sufficient cause' explanation for delayed form submissions, the court dismissed the petition, highlighting the importance of meeting legal requirements promptly.

10. Conclusion:
The Writ Petition was dismissed, emphasizing the need for compliance with statutory time frames and substantive justifications for delays to prevent misuse of provisions and ensure efficient tax administration.