2023 (9) TMI 1365 - HC - VAT and Sales Tax

Validity of preassessment notices - challenge on the premise that the impugned notices are barred by limitation in terms of Rule 5 (6) of the Central Sales Tax (Puducherry) Rules 1967 - time limitation - HELD THAT - Though the question here relates to one of limitation, this Court is not inclined to entertain the batch of writ petitions at the stage of show cause notice for it is trite law that though there is no absolute bar or embargo against entertaining writ petitions against notices, however, interference should be in rare cases and not as a matter of routine. Though, the restriction is self imposed it has been consistently held that High Court shall exercise restraint in entertaining writ petitions under Article 226 of the Constitution of India at the stage of show cause notice. This Court is of the view that whether the notices are barred by limitation or not can be adjudicated by the authority issuing the notice and it is open to the petitioner to submit its objection to the proposal including the plea of limitation. Limitation is a mixed question of fact and law which is yet another reason as to why this Court is not inclined to entertain the writ petition at the stage of show cause notice. The writ petitions are disposed of with liberty to the petitioner to file their objections within a period of 6 weeks from the date of receipt of a copy of this order, if any such objections are filed, the Respondent shall consider the same after providing the petitioner reasonable opportunity of personal hearing. Petition disposed off.

Summary

Issues:
The judgment involves challenges to preassessment notices on the basis of limitation under Rule 5(6) of the CST (P) Rules.

Details of the Judgment:

1. Background:
The petitioner is engaged in the business of automotive fuel system parts sales and exports. Notices were issued for reversal of Input Tax Credit for various assessment years due to lack of appropriate statutory declaration forms.

2. Petitioner's Case:
a. The assessments are barred by limitation as per Rule 5(6) of the CST (P) Act.
b. Limitation is a jurisdictional issue, making proceedings a nullity.
c. The impugned notice invoking Section 9 of the CST Act is misconceived.

3. Respondent's Case:
a. The writ petitions are premature, and issues can be raised before the Assessing Authority.
b. Initiation of assessment proceedings within the prescribed period is sufficient, regardless of the timing of the assessment order.

4. Court's Decision:
The Court declined to entertain the writ petitions at the show cause notice stage, citing the need for restraint in interference. The issue of limitation can be addressed by the issuing authority, and the petitioner can submit objections. Citing relevant Supreme Court judgments, the Court disposed of the writ petitions, allowing the petitioner to file objections within six weeks for consideration by the Respondent.

Conclusion:
The judgment emphasizes the importance of addressing jurisdictional issues like limitation at the appropriate stage of assessment proceedings, highlighting the need for parties to engage with the Assessing Authority before seeking judicial intervention.