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TMI Blog2018 (11) TMI 1268X X X X Extracts X X X X X X X X Extracts X X X X ..... ted for the final result - If the notice has been delayed, as in the present case, where the proceedings were initiated by the DRI in 2006 and the same was concluded only in the year 2011 after which the CTD took out proceedings under Section 45A of the KGST Act and Section 67 of the KVAT Act, then necessarily it would have to be decided as to whether the offence alleged by the CTD was one dependent only on the proceedings initiated by the DRI or also on the order of the Commissioner of Customs. There is no question of limitation arising, since the proceedings were completed within three years from the date of the order of the Commissioner of Customs itself, the notice having been issued in the year 2012, which is for reason of the rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 18.02.2009 in W.A.No.385 of 2009 [ M/s.Acme Furniture Interiors v. CTO ]. The Division Bench considered the issue as to when the limitation commences as stipulated under Section 67(1) of the KVAT Act. The learned Judges held that the detection of offence normally does not occur on the date of inspection when an inventory of goods is taken or seizure of records is made. Only when the records are analysed with reference to physical stock found, the officer can come to a finding as to whether any offence is prima facie committed. It was categorically declared that the limitation commences only from the date of detection of offence. The learned Judges also found that the statute did not provide for a limitation for detection of offen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007) 10 VST 180 (SC) ] to buttress the contention that even if there was no limitation provided in the statute, action has to be taken within a reasonable period and the reasonable period would depend upon the nature of statute, rights and liabilities created thereunder and various other factors. 5. The learned Special Government Pleader, on facts, would point out that the assessments in the above case are with respect to assessment years 2003-04, 2004-05, 2005-06 and 2006-07; the first two years coming within the KGST regime and the last two years coming within the VAT regime. It is pointed out that the proceedings were initiated on the basis of the proceedings taken by the Commissioner of Customs pursuant to the inspection of the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commercial Taxes Department as early as in the year 2006. A search was conducted in the premises of the assessee by the DRI on 13.10.2006. A statement of the Intelligence Officer of the Commercial Taxes Department [for brevity CTD ] was taken on 07.12.2006. A show cause notice dated 11.04.2008 was issued by the DRI to the Commissioner of Commercial Taxes for investigation, which was received by the latter on 25.04.2008. The detection of offence should be related to the said show cause notice when the offence alleged was specifically brought to the notice of the CTD. If that be so, the order passed in the year 2014 would be hit by limitation, as the statute provided at that point of time; limitation of one year in so far as the proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er in which it was dealt with and the specific offence alleged against the assessee in the majority of instances; except when the facts are explicit and the exact date require no judicious determination. 8. Ordinarily a notice proposing penalty is a sure sign of detection of offence. But after inspection of offence if there is a requirement to verify the books of accounts, then the summons for production of any records should be issued within a reasonable period; not the reasonable time we earlier referred to for completion, but immediately or reasonably proximate to the inspection. The further notice, indicating a detection of offence should also be proximate to the verification of the books. Then necessarily; the detection of offence w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I or also on the order of the Commissioner of Customs. This essentially is a factual adjudication, which we would not enter into in a proceeding under Article 226 of the Constitution. If the offence detected by the CTD, as evident from the notice issued, is one which is relatable to and dependent on the order of the Commissioner of Customs, then we have to say that there is no question of limitation arising, since the proceedings were completed within three years from the date of the order of the Commissioner of Customs itself, the notice having been issued in the year 2012, which is for reason of the receipt of the order of 2011, being in 2012. 10. This necessarily calls for a factual adjudication and arguments have been addressed from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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