2016 (8) TMI 1339 - HC - VAT and Sales Tax

Court rejects reassessment due to statutory time limit under Bihar Finance Act, emphasizes compliance in tax matters.

The court allowed and disposed of the writ petition based on the statutory time limit for reassessment under the Bihar Finance Act. The court emphasized ... Validity of assessment order - assessing officer has already passed an order on September 8, 2003 which is at annexure 1 and 1/1 to the memo of this writ petition for the period 2001-02 - counter sale - whether the sale is inter-State sale or intra-State sale? Held that: - in pursuance of an order passed in a suo motu revision can be initiated and completed before expiry of two years from the date of communication of such order. The date of the revisional order is December 11, 2007 we are in the year 2016 as on today no order has been passed by the assessing officer after the order passed in revision and, hence, we are keeping the issue open whether the transactions in question for the year 2001-2002 were inter-State sale or intra-State sale and only on the ground that now no reassessment order can be passed in view of proviso to section 24 of the Bihar Finance Act, 1981 and, hence, no effect can be given to the order passed by the Joint Commissioner, Commercial Taxes (Administration), Dhanbad Division, Dhanbad dated December 11, 2007. Petition allowed. Issues:1. Challenge to order passed by Joint Commissioner, Commercial Taxes2. Determination of whether sale is inter-State or intra-State3. Compliance with time limit for reassessment under Bihar Finance ActIssue 1 - Challenge to Order:The petitioner challenged the order passed by the Joint Commissioner, Commercial Taxes, Dhanbad, arguing that the assessing officer had already issued an order in 2003 for the period 2001-02. The petitioner contended that the subsequent movement of goods did not affect the initial sale, which was a 'counter sale' within the state. The petitioner emphasized that the burden of proof rested with the State to establish that the movement of goods between states was due to the sale. The respondent argued that under the Central Sales Tax Act, movement of goods between states was presumed to indicate an inter-State sale unless proven otherwise. The respondent highlighted that the petitioner had paid Central sales tax and obtained road permits for inter-State transportation, but no fresh order had been issued by the assessing officer after the matter was remanded.Issue 2 - Sale Classification:The primary issue revolved around determining whether the sale of hard coke was an inter-State or intra-State sale. The petitioner maintained that the sale occurred at their business premises as a 'counter sale,' distinct from subsequent movements of goods. The respondent contended that the movement of goods immediately after the sale indicated an inter-State transaction, with the burden on the petitioner to rebut this presumption. The court noted the lack of evidence presented by the petitioner to counter the presumption of inter-State sale, emphasizing the need for verification through examination of the petitioner's records.Issue 3 - Time Limit for Reassessment:The court examined the time limit for reassessment under the Bihar Finance Act, specifically focusing on the proviso to section 24. It was highlighted that no fresh order had been passed by the assessing officer following the revisional order in 2007, leading to a lapse of over two years without reassessment. Consequently, the court concluded that no reassessment order could be issued due to the statutory time limit, rendering the order by the Joint Commissioner ineffective. Despite the availability of alternative remedies, the court decided to allow the writ petition based on the statutory limitation, emphasizing that the proviso to section 24 precluded any reassessment at that stage.In conclusion, the court allowed and disposed of the writ petition based on the statutory time limit for reassessment, highlighting the significance of compliance with legal provisions in tax matters.