2021 (9) TMI 366 - HC - VAT and Sales Tax

Refusal to reopen the Assessment Order - rejection of declarations in Form C which were obtained by it in the year 2020 - time limitation - power to reopen the proceedings after lapse of four years - no sufficient cause has been made out by the petitioner to explain the delay in filing declarations in Form C - 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, 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. It is argued that the declarations in Form C are genuine and there was delay as the forms had to be obtained from the business entities beyond the State. However, no contemporaneous documents are placed on record to support the claim that efforts had been made on the part of the petitioner to obtain declarations in Form C from such business entities - While deserving cases of unintentional delay ought to be condoned, law cannot be permitted to be misused at the hands of an indolent litigant by mechanically condoning delay without valid justification. Thus, no sufficient cause has been made out by the petitioner to explain the delay in filing declarations in Form C - no case for directing to reopen the assessment is made out - petition dismissed.

Issues:
1. Rejection of declarations in Form 'C' and refusal to reopen Assessment Order.
2. Power of authorities to reopen proceedings after a lapse of four years.
3. Interpretation of Rule 12(7) of the Central Sales Tax Rules, 1957.
4. Applicability of Section 9 of the Central Sales Tax Act, 1956.
5. Authority to reopen assessment beyond statutory time limits.
6. Power of Assessing Authority or Commissioner to reopen assessment.
7. Condonation of delay in submitting declaration forms.
8. Interpretation of 'sufficient cause' for condonation of delay.
9. Scope of powers vested in statutory authorities.
10. Conditions for invoking extraordinary writ jurisdiction.

Analysis:
1. The judgment deals with the challenge against the rejection of declarations in Form 'C' and refusal to reopen the Assessment Order by the authorities. The petitioner sought to reopen the assessment after a lapse of four years, which was contested by the Department citing Section 21(4) of the Andhra Pradesh Value Added Tax Act, 2005 ('the AP VAT Act'). The Court examined the statutory provisions and timelines for filing declarations under Rule 12(7) of the Central Sales Tax Rules, 1957, emphasizing the need for 'sufficient cause' to extend the deadline.

2. The Court analyzed the powers of the prescribed authority to conduct assessments within specific time frames as per Section 21 of the AP VAT Act. It highlighted the provisions for assessment timelines and the conditions under which assessments can be reopened, especially in cases of wilful evasion of tax. The judgment clarified the limitations on the authority to reopen assessments beyond the prescribed statutory limits.

3. The interpretation of Rule 12(7) of the Rules was crucial in determining the authority's power to condone delays in submitting declaration forms. The Court emphasized that while 'sufficient cause' may justify an extension, it does not automatically authorize the reopening of assessment proceedings. The judgment underscored the need for statutory authorities to act within the confines of the law and not exceed their prescribed powers.

4. The applicability of Section 9 of the Central Sales Tax Act, 1956 was discussed concerning assessment, reassessment, or reopening under the AP VAT Act. The judgment highlighted the interplay between different statutory provisions and the limitations on the authority's ability to reopen assessments based on specific conditions and timelines.

5. The Court clarified that the Assessing Authority or Commissioner cannot reopen assessments beyond the stipulated time limits provided by law. It emphasized that statutory provisions must be strictly adhered to, and any attempt to extend assessment timelines must be supported by valid justifications and 'sufficient cause' as per the legal requirements.

6. The judgment addressed the argument that Rule 12(7) could empower the Assessing Authority to reopen assessments, rejecting this contention by emphasizing that statutory authorities derive their powers from the law and cannot exceed their prescribed mandates. It highlighted the need for assessees to follow due process and avail of appellate remedies in case of disputes regarding assessment proceedings.

7. The conditions for condoning delays in submitting declaration forms were discussed, emphasizing that 'sufficient cause' must justify the entire period of delay. The judgment stressed the importance of providing valid justifications for delays and preventing the misuse of legal provisions by assessees to avoid timely compliance with assessment requirements.

8. The interpretation of 'sufficient cause' for condonation of delay was crucial in determining the validity of reopening assessment proceedings. The judgment emphasized that vague explanations or evasive justifications cannot serve as valid reasons to reopen assessments after significant delays, highlighting the need for genuine and well-supported explanations for delays in compliance.

9. The scope of powers vested in statutory authorities was analyzed, emphasizing that authorities must act within the boundaries of the law and not possess inherent powers to reopen assessments beyond statutory time limits. The judgment underscored the importance of adhering to statutory provisions and preventing misuse of legal provisions by either party involved in assessment proceedings.

10. The conditions for invoking extraordinary writ jurisdiction were outlined, emphasizing that petitioners must demonstrate due diligence and valid justifications for seeking the reopening of assessment proceedings. The judgment highlighted that while unintentional delays may be condoned, the law cannot be misused by parties to avoid timely compliance with assessment requirements.

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