2018 (5) TMI 1395 - HC - VAT and Sales Tax

Court quashes late revision notices under VAT Act, citing limitation period violation.

RELIANCE INDUSTRIES LTD. Versus STATE OF GUJARAT

The Court held that the notices for revision of assessment orders were issued beyond the limitation period prescribed under Section 75 of the VAT Act. ... Revision of order of assessment - the petitioner was directed to produce necessary accounts - time limitation - Section 75 of the VAT Act - revisional powers of Commissioner - Reduction of tax credit - input Fuel - Branch Transfers. Held that: - In terms of clause (a) of subsection (1) of section 75 thus, the Commissioner has revisional powers which can be exercised on his own motion or under an application made to him for such purpose. He could take any order in revision passed by the officer appointed under section 16 of the Act to assist him by calling for and examine record of any such order and pass such order as he thinks just and proper. Exercise of such powers however, comes with prescription of limitation. The suomotu power for calling any record of any such order can be exercised within three years. If the same is to be exercised on a motion by the person concerned, the period of limitation prescribed is one year. There is nothing on record to suggest that in the present cases, the Additional Commissioner had called for the record of the assessment of the petitioner for the particular year within three years of the date of the order so as to enable him to exercise the revisional powers. In fact, looking to the tenor of the notice of revision it was not even possible for him to have done so. This is because the order of assessment was passed on 30.03.2013. Period of limitation would therefore expire on 30.03.2016 - the action of the Additional Commissioner calling for the record of the assessment and issuing notice for revision is beyond the period of limitation prescribed. Clause (a) of subsection (1) of section 67 of the Gujarat Sales Tax Act made pari materia provisions concerning the revisional powers of the Commissioner. Under the said section also, the Commissioner is empowered to call for and examine the record of any proceedings of the subordinate officer suomotu within three years or on an application made to him for such purpose within one year from the date of the order passed by such officer. Reliance can be placed in the case of Om Metals & Minerals Ltd. v. Assistant Commissioner of Sales Tax (Appeals) [2011 (4) TMI 1025 - GUJARAT HIGH COURT], where it was held that the impugned notice has clearly been issued after the expiry of the period of three years from the date of the order sought to be revised, that is, the period of limitation prescribed under clause (a) of subsection (1) of section 67 and as such, the same is apparently barred by limitation. The impugned notices for revision cannot be sustained, being clearly in exercise of revisional powers beyond the period of limitation prescribed - petition allowed. Issues Involved:Petition challenging notice for revision of assessment order based on Supreme Court judgment. Limitation period for exercising revisional powers under Section 75 of the VAT Act.Analysis:Issue 1: Petition challenging notice for revision based on Supreme Court judgmentThe group of petitions involved similar facts and a common question of law regarding the revision of assessment orders. The petitioner, a company, challenged a notice issued by the Additional Commissioner of State Tax seeking to revise an assessment order passed by the Deputy Commissioner of Commercial Tax. The issue revolved around the interpretation of section 11(3)(b) of the Gujarat Value Added Tax Act concerning the reduction of tax credit for branch transfers involving fuel inputs. The Supreme Court, in a related case, held that the reduction of tax credit should be applied twice in certain cases. This judgment formed the basis for the impugned notices for revision. However, the petitioner contended that the revisional powers of the Commissioner were subject to limitations, including a prescribed period of limitation under Section 75 of the VAT Act.Issue 2: Limitation period for exercising revisional powers under Section 75 of the VAT ActSection 75 of the VAT Act grants revisional powers to the Commissioner, allowing for revision of orders within a specified timeframe. The Commissioner can exercise revisional powers on his own motion within three years or on an application made within one year from the date of the order. The statute also specifies that the order of revision must be passed within five years from the date of the order being revised. In the present case, the order of assessment was passed on 30.03.2013, and the notice for revision was issued on 03.11.2017, clearly beyond the prescribed three-year limitation period. The petitioner relied on previous judgments of the High Court to support the argument that the impugned notices for revision were barred by limitation. The Court referred to similar cases where notices for revision were held to be beyond the limitation period, emphasizing the importance of adhering to the prescribed time limits for exercising revisional powers.In conclusion, the Court found that the impugned notices for revision were clearly issued beyond the period of limitation prescribed under Section 75 of the VAT Act. Citing previous judgments and legal provisions, the Court quashed the respective notices in each petition, thereby disposing of all petitions accordingly.