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TMI Blog2018 (9) TMI 1802X X X X Extracts X X X X X X X X Extracts X X X X ..... ed both under the KGST Act and the Central Sales Tax Act, 1956 [for brevity, the CST Act]. The Assessing Officer under the KGST Act would complete the assessments both under the KGST Act and CST Act by separate orders. 2. After the introduction of the KVAT Act, there is a deemed completion of assessment under Section 21, if the return is filed in the prescribed manner accompanied with the prescribed documents. Assessment of escaped turnover could be made either under Section 24 or under Section 25 of the KVAT Act, the latter of which provided a limitation period of five years for issuance of notice of assessment, more specifically "to proceed to determine...". Section 24 provided completion of such assessment within three years from the date of order to which the return relates. However, the practice of an assessment being proceeded with and completed by a specific order continued under the CST Act as per the prescription available in the Central Sales Tax(Kerala) Rules, (CST Rules, hereafter) ie: Rule 6(5). There is no limitation provided for such completion of assessment, under Rule 6(5); which the State seeks benefit of in these writ appeals. The learned Single Judge, by the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they have to proceed in accordance with the provisions of the law enacted by the State. Sub-section (2) of Section 9 opens with the words 'subject to the provisions under this Act and Rules framed thereunder' and hence the provisions of the KGST Act would apply only in so far as they are not contrary to the provisions of the CST Act and the Rules framed thereunder. Sub-Rule (5) of Rule 6 of the CST Rules having not provided any period of limitation for completion of assessments,the limitation provided would be of the completion of assessments under the general sales tax law, ie: four years, provided under Section 17 of the KGST Act. In this context, the extension of period for completion of assessment, brought in by the provisos to Section 17 also would be equally applicable, was the finding. It was hence the assessments under the CST Act during the KGST regime were found to be sustainable, if the same has been completed within the time provided under the general sales tax law of the State. The Division Bench also categorically found that there is no warrant for adopting the period provided under sub-rule (7) or (8) in sub-rule (5) of Rule 6. In such circumstances, we are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court indicated that the argument of the learned counsel that the assessment had to be completed within a reasonable time in order to be sustainable was not a sound argument. 8. In Bharat Steel Tubes Ltd. [supra] also the Hon'ble Supreme Court, despite the assessment having not been completed within five years, found that there is no specific limitation provided and directed the assessments to be completed within four months from the date of the judgment. However, the learned Bench made certain observations, which we extract hereunder: "15. Before we part with the case, we would like to indicate that assessment of tax should be completed with expedition. It involves the revenue to the State. In the case of a registered dealer who collects sales tax on behalf of the State, there is no justification for him to withhold the payment of the tax so collected. If a timely assessment is completed, the dues of the State can be conveniently ascertained and collected. Delay in completion of assessment often creates problems. The assessee would be required to keep up all the evidence in support of his transactions. Where evidence is necessary, with the lapse of time, there is scope for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year limitation under Rule 6(7) & (8) is for assessment of escaped turnover; while Rule 6(5) contemplates an assessment at the first instance after the return is filed. Under the value added tax regime even for assessment of escaped turnover the limitation is five years; for initiation of proceedings. Hence we find the same to be reasonable for proceeding to carry out the assessment after the return is filed; under the CST Act. We, then have to look at the individual proceedings challenged in the various writ petitions in the background of the reasonable time as found by us. 10. Before we look at the individual writpetitions, we have to notice one another contention taken up by the learned Special Government Pleader; of all these assessments being open for consideration as per the amendments brought into Section 42 of the KVAT Act, again relying on the provisions of Section 9(2) of the CST Act. By Finance Act, 2016, sub-section (3) was added to Section 42, which reads as under: "(3) Notwithstanding anything to the contrary contained in this Act, if a dealer, (i) fails to file audited accountsreferred to in sub-section (1), or (ii) fails to file revised annual re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth these notices are within the reasonable time as prescribed by us, of five years. Hence, W.A. No.1264 of 2017 would stand allowed. (iv) W.A. No.1265 of 2017 was concerned withthe assessment year 2009-2010 and the notice issued was dated 10.07.2015, as is evident from the assessment order produced therein. The same is beyond the limitation period and the appeal would stand rejected. (v) W.A. No.1270 of 2017 also dealt with theassessment year 2009-2010. Ext.P1 assessment order does not speak of a date for the notice issued under Rule 6(5). However, Ext.P4 is the reply filed by the assessee, in which 18.02.2016 is stated to be the date of receipt of notice. The State does not controvert such assertion. It has to be found that the notice is issued beyond the period of limitation and the writ appeal would stand rejected. (vi) W.A. No.1291 of 2017 was concerned withtwo assessment years, 2006-2007 and 2007-2008. Exts.P1 & P1(a), both dated 04.03.2016, are the notices issued, which are beyond the limitation period. W.A. No.1291 of 2017hence would stand rejected. (vii) W.A. No.1172 of 2017 is concerned with assessment years 2008-2009 and 2009-2010, for which notices were is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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