2019 (8) TMI 823 - HC - VAT and Sales Tax

Court bars revised assessment orders beyond limitation, emphasizing certainty in public law.

The court concluded that the revised assessment orders were barred by limitation as they were determined after the six-year period from the date of ... Determination - proceed to assess - limitation under Section 27(1)(a) of the TNVAT Act - assessment qua dealer - enforcement wing report - assessing authority's duty to apply mind independently - public law principle of finality and limitationDetermination - proceed to assess - enforcement wing report - assessing authority's duty to apply mind independently - limitation under Section 27(1)(a) of the TNVAT Act - Whether the inspection by the Enforcement Wing on 16.12.2016 and the Enforcement Wing report dated 16.04.2018 constituted a 'determination' within the meaning of Section 27(1)(a) of the TNVAT Act so as to save the revisional proceedings from the six years limitation. - HELD THAT: - The court held that the term 'determine' in the context of Section 27(1)(a) must be read as denoting an official proceeding to assess the dealer - i.e., to 'proceed to assess' - and connotes application of mind and an effective expression of conclusion directed to the dealer. Reliance on lexical and authoritative authorities supports that 'determination' implies an official adjudicatory action rather than mere internal inspection findings. The Enforcement Wing's inspection (16.12.2016) and its report (16.04.2018) were independent inputs which the Assessing Authority was bound to consider by applying its own mind; the Enforcement Wing officer cannot be equated with the Assessing Authority and its report does not itself constitute a determination qua the dealer. The revisional notice dated 27.09.2018 was the first communication amounting to 'proceeding to assess' the petitioner-dealer; therefore the reckoning date for limitation is the date of the revisional notice (and in precise calculation, the date of service of that notice). Because the revisional notice and the revised assessment orders were issued after the six-year limitation period from the date of assessment had elapsed, the revised assessments under Section 27(1)(a) are time-barred. The court emphasized the public law principle that limitation prevents leaving a person indefinitely uncertain of liability. [Paras 11, 20, 21, 23]Inspection and report by the Enforcement Wing do not constitute 'determination' under Section 27(1)(a); the date of the revisional notice (27.09.2018) is the relevant reckoning date and the revised assessments are barred by six years' limitation.Final Conclusion: The writ petitions are allowed; the revised assessment orders under Section 27(1)(a) of the TNVAT Act for Assessment Years 2007-08 to 2010-11 are set aside as barred by the six years' limitation. There shall be no order as to costs. Issues Involved:1. Limitation under the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act).2. Whether inspection and report by the Enforcement Wing can save limitation for the Revenue.3. Interpretation of the term 'determine' in Section 27(1)(a) of the TNVAT Act.Detailed Analysis:Issue 1: Limitation under the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act)The central theme of the writ petitions is limitation under the TNVAT Act. The assessment years in question are 2007-08, 2008-09, 2009-10, and 2010-11, with the deemed assessment date being 30.06.2012. Revisional notices were issued on 27.09.2018, and revised assessment orders were passed on 30.05.2019. The petitioner contended that these orders are barred by limitation as per Sections 27(1)(a) and 27(1)(b) of the TNVAT Act, which prescribe a six-year limitation period from the date of assessment, effective from 19.06.2012. The court noted that the six-year period expired on 30.06.2018.Issue 2: Whether inspection and report by the Enforcement Wing can save limitation for the RevenueThe Revenue argued that the inspection on 16.12.2016 and the report on 16.04.2018 should be considered part of the assessment process, thus saving the limitation period. However, the court noted that the revisional notice and the revised assessment order were issued after the six-year limitation period had elapsed. The court emphasized that the assessment process must be initiated concerning the dealer, which in this case, occurred only on 27.09.2018, well beyond the limitation period.Issue 3: Interpretation of the term 'determine' in Section 27(1)(a) of the TNVAT ActThe court examined the term 'determine' in the context of Section 27(1)(a) of the TNVAT Act, referring to various judgments and legal dictionaries. The term 'determine' implies proceeding to assess and must be done concerning the dealer. The court concluded that the term 'determine' means that the assessment process must be initiated concerning the dealer, which happened only on 27.09.2018. Thus, the revised assessment orders were barred by the six-year limitation period.Conclusion:The court concluded that the revised assessment orders were barred by limitation as they were determined after the six-year period from the date of assessment had elapsed. The court set aside the impugned assessment orders and allowed the writ petitions, emphasizing that limitation is based on a public law principle that one cannot be kept guessing in eternity. Consequently, the connected miscellaneous petitions were closed, and no costs were ordered.