2023 (8) TMI 109 - HC - VAT and Sales Tax

Reopening of assessment - Time limitation - impugned order dated 22.04.2022 for the assessment year 2007-08 challenged on the premise that the same is barred by limitation - HELD THAT - The original assessment order dated 24.10.2013 although refers to Section 22(2) of the Act, it appears that the same cannot be traced to Section 22(2) of the Act in view of the fiction contained in the proviso to Section 22(2), which provides that all assessments from the assessment year 2006-07 till 2010-11 shall be deemed to have been assessed on 30.06.2012. In view of the above deeming the assessment under Section 22(2) of the Act is deemed to have been made on 30.06.2012. Any assessment made after 30.06.2012 could be traced to Section 27 of the Act, which prescribes six years from the date of orders of assessment, viz., 30.06.2012. Thus, any assessment ought to have been made under Section 27 of the Act on or before 30.06.2018. Assuming that this assessment dated 24.10.2013 is traceable to Section 27 of the Act and the present impugned order is also traceable to Section 27 of the Act, the impugned order dated 22.04.2022 ought to be in compliance with the limitation prescribed under Section 27 of the Act, which provides that any assessment ought to be made within six years from the date of the assessment. In the present case, the original assessment is deemed to have been made in terms of Section 22(2) of the Act on 30.06.2012. This Court is of the view that the impugned proceedings being barred by limitation, the same is bad for want of jurisdiction and a nullity. In such circumstances, interference under Article 226 of the Constitution of India is warranted inasmuch as question of limitation relates to jurisdiction. An order barred by limitation is a nullity. This Court is of the opinion that the impugned proceedings is barred by limitation and thus bad for want of jurisdiction and a nullity - Petition disposed off.

Summary

Issues: Challenge to assessment order for the assessment year 2007-08 on the grounds of being barred by limitation.

Analysis:
The petitioner contested the impugned order dated 22.04.2022, arguing that it was time-barred as per Section 27 of the Tamil Nadu Value Added Tax Act, 2006, which allows revision of assessment within six years from the original order. The petitioner, a yarn manufacturer, had previously undergone assessment under Section 22(2) of the Act on 24.10.2013. However, the impugned order was issued based on office record verification, which the petitioner claimed was beyond the statutory limitation period. The respondent, represented by the Additional Government Pleader, defended the impugned order, stating that notices were sent to the petitioner for objections, which were not submitted with supporting documents, leading to the assessment order.

The court examined the legal provisions under Section 22(2) and Section 27 of the Act. The court noted that assessments from 2006-07 to 2010-11 were deemed to have been assessed on 30.06.2012. Therefore, any assessment after this date should be under Section 27, with a limitation of six years from the date of the original assessment. The court emphasized that the impugned order dated 22.04.2022 should comply with the limitation prescribed under Section 27, requiring assessments to be made within six years from the original assessment date. Despite the issuance of notices, the court found that the assessment initiated on 06.08.2019 was beyond the limitation period, rendering the consequential assessment also time-barred.

Considering the jurisdictional aspect, the court cited relevant judgments to support its decision. Referring to judgments such as Commissioner of Income Tax, Chennai vs. Alagendran Finance Ltd., and ITW Signode India Ltd., vs. CCE, the court reiterated that a proceeding beyond the limitation period is void ab initio. The court highlighted that the question of limitation is fundamental to jurisdiction, making an order barred by limitation a nullity. Therefore, the court concluded that the impugned proceedings were jurisdictionally flawed due to being time-barred, leading to the setting aside of the impugned order. The court invoked Article 226 of the Constitution of India to address the jurisdictional issue and disposed of the Writ Petition, emphasizing that an order barred by limitation is legally invalid.