2016 (11) TMI 1199 - HC - VAT and Sales Tax

Court rules assessment order under VAT Act lacks jurisdiction, quashes order citing absence of pending assessments & expired time limits.

ROYAL ENTERPRISE Versus STATE OF GUJARAT AND 1

ROYAL ENTERPRISE Versus STATE OF GUJARAT AND 1 - TMI Issues:Challenge to assessment order under Section 34(8A) of the Gujarat Value Added Tax Act, 2003.Analysis:The petitioner challenged the assessment order dated 10th August, 2016, passed by the Commercial Tax Officer under Section 34(8A) of the VAT Act, 2003. The petitioner contended that the assessment order was without jurisdiction as no assessment was pending, and the time limits for various assessments had expired. The order sought to disallow income tax credit related to purchases made by the petitioner. The assessment resulted in a demand for additional dues, including tax, interest, and penalty. The petitioner filed a special civil application under Article 226 and/or 227 of the Constitution of India, feeling aggrieved by the assessment order.The petitioner argued that the Commercial Tax Officer wrongly invoked Section 34(8A) of the VAT Act, as no assessment was pending when the notice was issued. The petitioner relied on a previous decision by a Division Bench of the Court in a similar case, where an assessment order under the same provision was quashed because the assessment had become final, and the time for revision had lapsed. The State, represented by the learned AGP, did not dispute the petitioner's contentions, acknowledging that no assessment was pending when the proceedings under Section 34(8A) were initiated.The Division Bench's previous decision was cited, highlighting that the provision of Section 34(8A) could not be applied when the original assessment and revision powers had become time-barred. The Court emphasized that the provision required the pendency of proceedings, which was absent in the petitioner's case. Ultimately, the Court found the impugned assessment order to be without jurisdiction, as it was made beyond the prescribed limitation period of 4 years under Section 34(9) of the Act. Consequently, the Court quashed and set aside the assessment order, ruling in favor of the petitioner.In conclusion, the Court's judgment in this case revolved around the jurisdictional issue concerning the assessment order passed under Section 34(8A) of the VAT Act, 2003. The Court found in favor of the petitioner, relying on the absence of pending assessments, expired time limits, and the precedent set by a previous Division Bench decision. The impugned assessment order was deemed to be without jurisdiction and was consequently quashed and set aside.