Delay in Cess Assessment Deemed Unjustified: Court Emphasizes Need for Timely Process

Siemens Limited Versus The State of Maharashtra, Commissioner of Local Body Tax, Navi Mumbai, The Local Body Tax Officer, Navi Mumbai Municipal

Siemens Limited Versus The State of Maharashtra, Commissioner of Local Body Tax, Navi Mumbai, The Local Body Tax Officer, Navi Mumbai Municipal - TMI Issues Involved:
1. Whether the delay in completing the assessment of cess under Rule 25 of the Maharashtra Municipal Corporation (Cess on Entry of Goods) Rules, 1996 was justified.
2. Whether the reminder issued in Form-H on 24.09.2019 was valid.
3. Whether the assessment process was vitiated due to the unreasonable delay.

Summary:

1. Delay in Completing the Assessment:
The petitioner, a registered dealer, filed returns for the period from 01.04.2008 to 31.03.2013. Notices in Form-H were issued by the Municipal Corporation for each year, but the assessment was not completed for almost ten years. The petitioner argued that the delay rendered the continuation of the assessment process unlawful. The Court noted that Rule 25(3) of the Rules of 1996 requires the Commissioner to assess the amount of cess due either "on the date specified in the notice or as soon as may be thereafter," indicating the need for expeditious assessment. The Court found that the Commissioner failed to act within a reasonable time, as the assessment was not completed despite sufficient opportunity being given to the dealer to produce evidence.

2. Validity of the Reminder Issued in Form-H on 24.09.2019:
The reminder issued on 24.09.2019 referred to Rule 33 of the Maharashtra Municipal Corporation (Local Body Tax) Rules, which was not applicable to the assessment of cess. The Court held that this indicated non-application of mind and was unjustified. The assessment should have been completed under Rule 25 of the Rules of 1996.

3. Unreasonable Delay Vitiating the Assessment Process:
The Court emphasized that where no period of limitation is prescribed, the assessment must be completed within a reasonable period. The delay of more than ten years in completing the assessment was deemed unreasonable and unjustified. The Court quashed the reminder issued on 24.09.2019 for the periods from 01.04.2008 to 31.03.2012 and allowed the Municipal Corporation to proceed with the assessment for the period from 01.04.2012 to 31.03.2013 within a reasonable time.

Conclusion:
The Court allowed Writ Petition Nos. 3124 of 2020, 9635 of 2021, 9637 of 2021, and 9638 of 2021, quashing the reminder dated 24.09.2019 for the periods from 01.04.2008 to 31.03.2012. Writ Petition No. 9636 of 2021 was dismissed, allowing the Municipal Corporation to complete the assessment for the period from 01.04.2012 to 31.03.2013 expeditiously.