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2023 (11) TMI 1160 - HC - VAT and Sales TaxValidity of notices issued under Section 12 (2) of TNGST Act - SCN issued beyond Period of limitation - limitation prescribed under TNGST Act to assess the income of the petitioner under Best Judgment Assessment - HELD THAT - It appears that the present notices have been issued under Section 27 under the Best Judgment Assessment for the Assessment Years 2002-03, 2003-04 , 2004 05 and 2006-07 on 12.03.2015. The Assessment Years 2002-03, 2003-04, 2004-05 which would fall under TNGST Act, notices were issued under Section 12 (2) of the Act and for the Assessment Year 2006-07, notice was issued under Section 22 (4) of the VAT Act which came into effect on 01.01.2007. Therefore, notices were issued under TNGST Act and VAT Act by referring to Section 12 (2) after a period of nine months and under Section 22 (4) under VAT Act after a period of three months. In all these cases, no proceedings have been initiated within the maximum time limit provided in the Act, for the escaped turnover. Since no time limit has been fixed under the Best Judgement Assessment, the Court has taken into consideration with regard to the reasonable time limit, that is the maximum time limit provided under any other assessment proceedings which can be taken only if there is no time limit prescribed under any other provision. In the present case, for the escaped turnover, the assessment under TNGST Act, the maximum time limit under Section 16 is five years and under the VAT Act, under Section 27, it is six years. No doubt, in the present case, Show Cause Notices were issued beyond the period of five years and six years against the respective assessment years. As this Court has taken a view that the time limit for passing an order under Section 22 (4) and 27 co-exist and no order under Section 22 (4) can be passed beyond the period of limitation, as prescribed under Section 27 of the Act. This Court is of the view that the present notices came to be issued beyond the period of limitation, this Court is inclined to quash the impugned Show Cause Notices issued by the respondent - Petition allowed.
Issues involved:
Challenging notices under Section 12(2) of the Act and 22(4) notice r/w Section 12(2) issued by the respondent. Details of the judgment: Issue 1: Limitation of notices The main contention raised was that the impugned notices were barred by limitation. The notices were issued for Best Judgement Assessment under Section 12(2) of the TNGST Act and 22(4) of the VAT Act. The petitioner argued that the notices dated 12.03.2015 exceeded the five-year limitation period as per Section 16 of the TNGST Act, rendering them without legal authority. Issue 2: Interpretation of limitation provisions The petitioner argued that while there is no specific limitation under the TNGST Act for Best Judgement Assessment, the VAT Act imposes a six-year limitation under Section 27 for assessing escaped turnover. The counsel contended that Section 16 of the TNGST Act applies only after an initial assessment has been made, which was not the case here. The respondent, however, cited a previous judgment stating that the time limit under Section 22(4) and 27 co-exist, and no order under Section 22(4) can exceed the limitation set for Section 27. Issue 3: Validity of notices The petitioner raised a new argument regarding the validity of notices issued against a company that was not in existence during the relevant assessment years. The respondent countered that this argument was not previously raised and should not be considered. Judgment: After considering the arguments and legal provisions, the Court found that the notices were indeed issued beyond the limitation period. Citing a previous judgment, the Court concluded that the time limit for passing orders under Section 22(4) and 27 must be adhered to. Consequently, the Court quashed the impugned Show Cause Notices issued by the respondent for the relevant assessment years under the TNGST and VAT Acts. In conclusion, all the writ petitions were allowed, no costs were awarded, and the connected Miscellaneous Petitions were closed.
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