2015 (10) TMI 215 - HC - VAT and Sales Tax

Limitation period exceeded, return acknowledgment deemed valid assessment order

The court held that the revisional authority's actions were beyond the three-year limitation period as per section 34 of the HVAT Act. The acknowledgment ... Determination of revisional jurisdiction - whether the revisional authority had initiated action under section 34 of the HVAT Act within the period of limitation of three years - Held that:- Wherever the return has been filed and which is complete in all respects, the acknowledgment issued to the assessee would be deemed to be an assessment order. It was not disputed by the learned State counsel that no notice under sub-section (2) of section 15 of the HVAT Act was issued for scrutiny of the return to the dealer. In such a situation, the State counsel was unable to explain and justify as to how the order on November 25, 2005 came to be passed and what was the nature of the same. Thus, it could not be termed to be a valid assessment order. Once the acknowledgment is deemed to be assessment order as discernible from section 15(1) of the HVAT Act in the present case which is dated November 19, 2004, limitation for passing order under section 34 of the HVAT Act was up to November 30, 2007, i.e., three years from the last date of November 30, 2004 of filing the return for the assessment year 2003-04. The same having been passed on June 13, 2008 was clearly beyond limitation. The Tribunal was thus in error in holding that the order passed on June 13, 2008 was within limitation. - Decided in favour of assessee. Issues:- Whether the revisional authority's action was within the period of limitation of three years under section 34 of the HVAT Act.Analysis:1. The judgment pertains to VATAP Nos. 132 and 162 of 2013, where the facts and issues were deemed similar. VATAP No. 132 of 2013 was filed under section 36 of the Haryana Value Added Tax Act, 2003 against orders dated June 13, 2008, March 5, 2009, and May 8, 2013. The appellant raised substantial questions of law regarding the Tribunal's handling of preliminary objections, provisions of the HVAT Act, and the review process.2. The appellant, a registered company engaged in iron and steel manufacturing and trading, filed its annual return for the assessment year 2003-04. The assessment was framed as deemed assessment based on the return filed. The revisional authority initiated proceedings suo motu, leading to orders dated June 13, 2008, March 5, 2009, and May 8, 2013, which were challenged by the appellant through appeals and review petitions.3. The main issue in consideration was whether the revisional authority's actions were within the three-year limitation period as per section 34 of the HVAT Act. The appellant argued that the order passed on June 13, 2008, was beyond the limitation period, as the assessment order was deemed to be the acknowledgment of the return filed on November 19, 2004. The State counsel supported the Tribunal's decision.4. Section 15 of the HVAT Act deals with the assessment of registered dealers, emphasizing the acknowledgment of returns as deemed assessment. Section 34 empowers the Commissioner to call for records and exercise revisional jurisdiction within three years, with exceptions for retrospective changes or settled matters. Rule 27 outlines the selection criteria for scrutiny cases and deems unselected cases as assessed based on return acknowledgment.5. The court concluded that the order passed on June 13, 2008, was beyond the limitation period, as the acknowledgment of the return filed on November 19, 2004, was the valid assessment order. Since no notice for scrutiny was issued, the subsequent order was deemed invalid. Consequently, the substantial questions of law were decided in favor of the appellant, and the appeals were allowed.