2022 (5) TMI 556 - HC - VAT and Sales Tax

Court dismisses writ petitions for 2006-10 assessments, upholds validity of notices; 2010-11 petition allowed, notice time-barred.

The court dismissed the writ petitions for the assessment years 2006-07 to 2009-10, finding the reassessment notices valid within the limitation period. ... Reopening of assessment - Deemed assessment - time limitation - impugned notices issued beyond the period prescribed under Section 27 of TNVAT Act, 2006 or not - Assessment Year 2010- 2011 - HELD THAT:- As far as the impugned notice dated 28.2.2019 for the assessment year 2010-11 is concerned, there was a deemed assessment on 30.6.2012 by the operation of law under proviso to section 22 (2) of the Tamil Nadu Value Added Tax Act, 2006.No previous notice for reopening of the assessment appears to have been issued. Therefore, the impugned notice dated 28.2.2019 seeking to reopen the deemed assessment completed on 30.6.2012 appears to be time-barred as no notice was issued within time and is therefore liable to be declared as time barred. The assessment which was completed long after the period of limitation was held barred by law. This is not the case in the case of the petitioner. It is also not open to the petitioner to plead the helplessness by citing rule 6 (11) of the Tamil Nadu Value Added Tax Rules, 2007. As long as the notices for reopening of the assessment had been issued and re-assessment was not completed, it was incumbent on the part of the petitioner to have maintained the records. If the petitioner failed to maintain the records, petitioner has to face the consequences. The respondent is therefore directed to complete the assessment of the assessment years 2006-07 to 2009-10 within a period of three months from date of receipt of this order. Needless, to state, before passing such orders, the petitioner shall be heard - In case the petitioner fails to file any reply or participate in the personal hearing, the respondent shall proceed to pass appropriate orders on merits and in accordance with law based on the available materials. Petition dismissed. Issues Involved:1. Validity of notices issued under Section 27 of the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act, 2006).2. Limitation period for reassessment under Section 27 of the TNVAT Act, 2006.3. Continuation of reassessment proceedings and deemed assessment.4. Jurisdiction and issuance of notices by different authorities.5. Maintenance of records as per Rule 6(11) of the Tamil Nadu Value Added Tax Rules, 2007.Detailed Analysis:Validity of Notices Issued Under Section 27 of TNVAT Act, 2006:The petitioner challenged the notices issued under Section 27 of the TNVAT Act, 2006, arguing that they were issued long after the expiry of the limitation period prescribed under the Act. The petitioner relied on the case of Tvl. Victus Dyeings vs. The Assistant Commissioner (ST), where it was held that reassessment notices issued after six years from the date of assessment were barred by limitation. The court examined the meaning of the term 'determine' as used in Section 27(1)(a) and concluded that the reassessment proceedings initiated beyond the limitation period were invalid.Limitation Period for Reassessment:The petitioner contended that the reassessment notices for the assessment years 2006-07, 2007-08, 2008-09, 2009-10, and 2010-11 were issued beyond the limitation period. The court observed that the original assessments were completed on various dates, and the impugned notices were issued much later. For the assessment year 2010-11, the court found that the deemed assessment was completed on 30.06.2012, and the impugned notice issued on 28.02.2019 was clearly time-barred.Continuation of Reassessment Proceedings and Deemed Assessment:The court noted that for the assessment years 2006-07 to 2009-10, the first notices for reopening the assessment were issued within the limitation period, and the impugned notices were a continuation of those earlier notices. Therefore, the reassessment notices for these years were not time-barred. However, for the assessment year 2010-11, no previous notice for reopening the assessment was issued within the limitation period, making the impugned notice time-barred and invalid.Jurisdiction and Issuance of Notices by Different Authorities:The petitioner argued that the impugned notices were issued by a different authority than the one who issued the earlier notices, and therefore, they should be quashed. The court rejected this argument, stating that the issuance of notices by different officers of the same department does not invalidate the notices.Maintenance of Records as Per Rule 6(11):The petitioner claimed that they were not required to maintain records beyond the prescribed period of five years (later six years) under Rule 6(11) of the Tamil Nadu Value Added Tax Rules, 2007. The court held that as long as the notices for reopening the assessment had been issued within the limitation period, the petitioner was obligated to maintain the records. Failure to do so would result in consequences for the petitioner.Conclusion:The court dismissed the writ petitions for the assessment years 2006-07 to 2009-10, as the reassessment notices were found to be within the limitation period and valid. However, the writ petition for the assessment year 2010-11 was allowed, as the reassessment notice was issued beyond the limitation period and was time-barred. The court directed the respondent to complete the assessment within three months, providing the petitioner an opportunity to file a reply and be heard.