2022 (8) TMI 535 - HC - VAT and Sales Tax

High Court quashes MVAT Act order over jurisdictional issues, emphasizing statutory timelines

The High Court quashed the impugned order under the MVAT Act due to jurisdictional issues, ruling in favor of the petitioners. The Court emphasized the ... Liability of dues - time limitation - main thrust was that the impugned order has been passed after the expiry of 6 years from the end of the year containing the transaction and, therefore, the order has been issued without jurisdiction - HELD THAT:- As per the proviso, in case a notice is issued under Sub-Section (5) on or after 1st April 2015, no order of assessment under Sub-Section(5) of Section 23 shall be made after the expiry of six years from the end of the year containing the transaction. Admittedly, transaction related to the period 1st April 2014 to 31st March 2015. The six years period, therefore, will begin from 1st April 2015 and it will end on 31st March 2021. It is for this reason, respondent no.3 knowing very well that 31st March 2021 is a crucial date, has dated the impugned order as 30th March 2021. But the clear give away is the date on which the digital signature is put on the impugned order, and that is 19th April 2021 at 18:14:33 hrs. Therefore, the order of assessment under Sub- Section (5) of Section 23 has been made after the expiry of 6 years from the end of the year and, therefore, the order has been passed without jurisdiction. Petition disposed off Issues:1. Validity of notice received under the Maharashtra Value Added Tax Act, 2002 (MVAT Act).2. Impugned order issued by respondent no.3 for payment of dues.3. Jurisdictional validity of the impugned order passed after the expiry of 6 years.Analysis:Issue 1: Validity of notice under MVAT ActThe petitioners, engaged in the business of manufacturing and dealing with Hydrogen Gas and other chemicals, received a notice under Sub-Section (5) of Section 23 of the MVAT Act. The notice, issued by respondent no.3, alleged tax evasion and called for the production of documents. The petitioners claimed non-receipt of the notice and subsequent reminders. The legal representative argued that the notice was not received, leading to an exparte order for payment of dues. The petitioners contended that the notice was not issued correctly, affecting their ability to respond effectively.Issue 2: Impugned order for payment of duesSubsequently, respondent no.3 issued an order holding the petitioners liable for a substantial sum. The petitioners claimed non-receipt of this order until they started receiving recovery calls. The legal representative highlighted discrepancies in the order's issuance and delivery, emphasizing that it was sent to the wrong email address. The petitioners disputed the validity of the order, citing procedural irregularities and lack of proper communication.Issue 3: Jurisdictional validity of the impugned orderThe main argument raised was that the impugned order was issued after the expiry of 6 years from the relevant transaction period, rendering it without jurisdiction. The legal representative contended that Section 23(5) of the MVAT Act imposes a time limit for assessment, and the proviso inserted from 1st April 2015 restricts the assessment period to six years from the end of the transaction year. As the impugned order was digitally signed after this period, it was deemed to lack jurisdiction. The Court agreed with this argument, emphasizing the significance of the timing of the digital signature in determining the order's validity.In conclusion, the High Court quashed and set aside the impugned order due to jurisdictional issues, ruling in favor of the petitioners. The judgment highlighted the importance of adherence to statutory timelines and procedures in tax assessment matters. The petition was disposed of with no order as to costs, providing relief to the petitioners in this legal dispute.