2024 (9) TMI 59 - HC - VAT and Sales Tax

Jurisdiction of order passed u/s 34 (8A) of the VAT Act for the year 2013-14 - whether the order u/s 34 (8A) of the VAT Act can be passed in absence of any proceedings pending under the VAT Act? - HELD THAT - The assessment order for the year 2013-14 was passed on 31.3.2018 and the said order attained its finality as neither the petitioner has challenged the same nor any reassessment or revision is contemplated within the statutory period of limitation. Meaning thereby, there was no proceedings pending under the VAT Act at the time when the impugned order under Section 34 (8A) of the VAT Act was passed. The authorities could not have exercised its power pursuant to Section 34 (8A) of the VAT Act when the condition precedent for exercising power has not been satisfied, namely, pendency of any proceedings under the VAT Act. Thus, the assessment proceedings under Section 34 (8A) of the VAT Act cannot be justified. Learned Assistant Government Pleader could not even point out about pendency of any proceedings under the VAT Act. Since the basic condition of Section 34 (8A) of the VAT Act, namely, during the course of any proceeding under the Act is not satisfied and no proceedings under the Act are pending, the present petition deserves to be allowed. Petition allowed.

Summary

Issues:
Challenge to order under Section 34 (8A) of the VAT Act for the year 2013-14 as being without jurisdiction, arbitrary, and illegal.

Analysis:
The petitioner, a public limited company engaged in trading, challenged an order under Section 34 (8A) of the VAT Act for the year 2013-14. The petitioner was registered under the VAT Act and regularly filed returns. An audit assessment was conducted, resulting in an assessment order granting input tax credit. Despite the finality of this order, a query was raised regarding input tax credit due to a mismatch in forms filed. The Assessing Officer issued a notice for issue-based assessment under Section 34 (8A) of the VAT Act, to which the petitioner responded with necessary details. Subsequently, a show cause notice was issued, followed by an order passed without proper communication to the petitioner. The petitioner, dissatisfied, approached the High Court challenging the jurisdiction of the order.

The High Court, after hearing both parties, considered whether an order under Section 34 (8A) of the VAT Act could be passed in the absence of pending proceedings under the Act. Referring to a previous judgment, the Court emphasized that the authority's power under Section 34 (8A) can only be exercised when proceedings under the Act are pending. As the assessment order had already attained finality without any pending proceedings, the Court concluded that the authority could not have validly exercised power under Section 34 (8A) of the VAT Act. The absence of pending proceedings rendered the assessment proceedings unjustified. The Court noted that the Assistant Government Pleader failed to demonstrate any pending proceedings under the Act, reinforcing the lack of jurisdiction in passing the impugned order.

In light of the above analysis, the High Court allowed the petition, quashing and setting aside the impugned order dated 31.3.2023 passed under Section 34 (8A) of the VAT Act.