Assessment Order Invalidated for Exceeding Six-Year Limit Under Section 27(1)(a) of TNVAT Act

The court held that the revised assessment order dated 30.03.2021 was invalid as it exceeded the six-year limitation period under Section 27(1)(a) of the TNVAT Act. The limitation period began on 31st October 2013, the date of deemed assessment, and ended on 31st October 2019. The show-cause notice issued on 22.02.2021 was beyond this period. Consequently, the court set aside the assessment order and allowed the writ petition, declaring the notice invalid due to the expiration of the limitation period.

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Issues Involved:
1. Validity of the revised assessment order under Section 27 of the TNVAT Act.
2. Limitation period for invoking Section 27 of the TNVAT Act.
3. Interpretation of "assessment" under Section 2(4-A) of the TNVAT Act.
4. Applicability of the deeming provision under Section 22(2) of the TNVAT Act.

Detailed Analysis:

1. Validity of the revised assessment order under Section 27 of the TNVAT Act:
The petitioner challenged the revised assessment order dated 30.03.2021 issued under Section 27 of the TNVAT Act, arguing that it was barred by limitation. The petitioner had ceased business activities and canceled the registration under the TNVAT Act on 01.06.2016. Despite this, the respondent issued a show-cause notice on 22.02.2021 for revising the tax assessment for the year 2012-2013. The petitioner contended that the revised assessment was beyond the permissible six-year period from the date of the original assessment.

2. Limitation period for invoking Section 27 of the TNVAT Act:
The petitioner argued that the limitation period for invoking Section 27(1)(a) of the TNVAT Act should commence from 31st October 2013, as the assessment year in question was 2012-2013. According to Section 22(2) of the TNVAT Act, the return filed by the petitioner was deemed to have been accepted by 31st October 2013. Therefore, the six-year limitation period would end by 31st October 2019. The show-cause notice issued on 22.02.2021 was beyond this period, rendering the revised assessment invalid.

3. Interpretation of "assessment" under Section 2(4-A) of the TNVAT Act:
The respondent contended that the term "assessment" under Section 2(4-A) of the TNVAT Act includes reassessment or revision of assessment. They argued that the reassessment made on 30.09.2016 should be considered the starting point for the limitation period. Therefore, the notice issued on 22.02.2021 was within the permissible period. The respondent relied on Supreme Court decisions to support their argument that the limitation period should commence from the date of reassessment, not the original assessment date.

4. Applicability of the deeming provision under Section 22(2) of the TNVAT Act:
The court analyzed the deeming provision under Section 22(2) of the TNVAT Act, which states that a dealer is deemed to have been assessed if the returns are filed in the prescribed form and accompanied by the necessary documents and proof of tax payment. The court emphasized that the intention of the legislature was to close the chapter by giving a deeming provision, making the assessment final on the 31st day of October of the succeeding year. The court concluded that once the dealer is deemed to have been assessed, the question of reassessment does not arise. The limitation period for invoking Section 27(1)(a) should start from the date of the deemed assessment, i.e., 31st October 2013.

Conclusion:
The court held that the revised assessment order issued on 30.03.2021 was unsustainable as it was beyond the six-year limitation period prescribed under Section 27(1)(a) of the TNVAT Act. The court set aside the impugned assessment order and allowed the writ petition, concluding that the show-cause notice issued on 22.02.2021 was invalid due to the expiry of the limitation period.

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