2015 (11) TMI 1015 - HC - VAT and Sales Tax

Validity of assessment orders upheld even if communicated later. Tribunal rejects limitation argument. Excise Commissioner's instructions not binding.

Printtech Versus State of Haryana

The court upheld the validity of assessment orders made within the statutory period, even if communicated later. The Tribunal's rejection of the ... Validity of assessment order - Bar of limitation - Delay in delivery of assessment order - Held that:- Provision of Section 15 of the HVAT Act, nowhere envisages that the order of assessment is required to be communicated within the period of three years. It only contemplates exercise of jurisdiction in passing assessment order within a period not exceeding three years. Once that jurisdiction has been exercised within the stipulated period, the communication thereof being ministerial act can be even after the expiry of period of three years. It is not provided under Section 15 of the HVAT Act that the date of dispatch or service of the assessment order on the dealer would constitute the date of the passing of the order. It is also not provided that it is the sine qua non for treating the date of passing of the assessment order. - order made or passed is required to be communicated within the period of limitation, otherwise it would be time barred. The factual matrix being different, the judgment relied upon does not come to the rescue of the appellant. What is of the essence under Section 15(4) of the HVAT Act is to assess to the best of assessing authority's judgment the amount of tax due from the assessee and not communication of assessment order. Hence the assessment had been made within the time prescribed and the date of the communication could not be taken as the date of making of the order as per observations of the Apex Court in Amar Singh Karika [1966 (1) TMI 79 - Supreme Court of India ] and Mangal Sen Shyam Lal Bhagwan Industries's cases (1975 (4) TMI 96 - SUPREME COURT OF INDIA). In Kappumalai Estate's case (1997 (3) TMI 39 - KERALA High Court), the Kerala High Court again applying the principles laid down in Government Wood Work's case (1987 (1) TMI 451 - KERALA HIGH COURT) has taken similar view. - No merit in appeal - Decided in favour of Revenue. Issues Involved:1. Justification of the Tribunal in rejecting the contention of limitation.2. Validity of an assessment order retained on file without dispatch within the limitation period.3. Implications of the assessment order and demand notice being dispatched after the period of limitation.4. Assessing authority's locus poenitentia if the assessment orders were not dispatched before the limitation period.5. Binding nature of instructions issued by the Excise and Taxation Commissioner on the assessing authority.Issue-wise Detailed Analysis:1. Justification of the Tribunal in rejecting the contention of limitation:The Tribunal rejected the appellant's argument that the assessment orders dispatched on 2.7.2013 were barred by limitation. The Tribunal held that the HVAT Act does not require the assessment order to be served on the assessee before the expiry of the limitation period. The assessment order must be made within three years, and its communication can occur afterward. This distinction between 'making' and 'communicating' an order was supported by various judicial precedents, including the Supreme Court's decision in *State of Punjab vs. Amar Singh Karika* and *Commissioner of Sales Tax, UP vs. Mangal Sen Shyam Lal Bhagwan Industries*.2. Validity of an assessment order retained on file without dispatch within the limitation period:The court clarified that the HVAT Act only mandates that the assessment order be made within the stipulated period, not necessarily communicated within that period. The act of communication is ministerial and can occur after the limitation period. This interpretation aligns with the Supreme Court's view in *Amar Singh Karika* and *Mangal Sen Shyam Lal Bhagwan Industries*, where it was held that an order is considered made when signed and entered into the requisite register.3. Implications of the assessment order and demand notice being dispatched after the period of limitation:The court concluded that the date of dispatch or service of the assessment order does not constitute the date of passing the order. The assessment order's validity is determined by the date it is made, not when it is communicated. This principle was upheld in multiple cases, including *Rajmal Multanmal and Company vs. Commercial Tax Officer* and *Sri Balaji Paddy and Rice Merchant vs. State of Andhra Pradesh*.4. Assessing authority's locus poenitentia if the assessment orders were not dispatched before the limitation period:The court found that the assessing authority does not lose its locus poenitentia (opportunity to change the decision) merely because the order was not dispatched before the limitation period. The jurisdiction to pass the assessment order within the prescribed period is what matters, not the communication date. This was reiterated in judgments such as *Khetmal Parekh & Company vs. State of Andhra Pradesh* and *A.M.Safiulla and Co. vs. The State of Madras*.5. Binding nature of instructions issued by the Excise and Taxation Commissioner on the assessing authority:The Tribunal held that the instructions dated 13.12.2004 and 14.3.2006 issued by the Excise and Taxation Commissioner were not binding on the assessing authority as they were not issued under section 56(3) of the HVAT Act. The court supported this view, stating that these instructions merely provided administrative guidance and did not have the force of law to render the assessment orders nullity if not followed.Conclusion:The court dismissed the appeal, affirming that the assessment orders made within the statutory period were valid despite being communicated later. The Tribunal's rejection of the limitation contention was justified, and the instructions from the Excise and Taxation Commissioner were not legally binding on the assessing authority.