Assessment order for 2007-08 set aside as time-barred under tax law

The court set aside the assessment order for the assessment year 2007-08, ruling it as time-barred under Section 27 of the Tamil Nadu Value Added Tax Act, 2006. Despite the respondent's defense of sending notices for objections, the court found the assessment initiated on 06.08.2019 to be beyond the limitation period of six years from the original assessment date. Citing relevant judgments, the court emphasized that a proceeding beyond the limitation period is void ab initio, rendering the impugned order jurisdictionally flawed and legally invalid under Article 226 of the Constitution of India.

---

---

Issues: Challenge to assessment order for the assessment year 2007-08 on the grounds of being barred by limitation.

Analysis:
The petitioner contested the impugned order dated 22.04.2022, arguing that it was time-barred as per Section 27 of the Tamil Nadu Value Added Tax Act, 2006, which allows revision of assessment within six years from the original order. The petitioner, a yarn manufacturer, had previously undergone assessment under Section 22(2) of the Act on 24.10.2013. However, the impugned order was issued based on office record verification, which the petitioner claimed was beyond the statutory limitation period. The respondent, represented by the Additional Government Pleader, defended the impugned order, stating that notices were sent to the petitioner for objections, which were not submitted with supporting documents, leading to the assessment order.

The court examined the legal provisions under Section 22(2) and Section 27 of the Act. The court noted that assessments from 2006-07 to 2010-11 were deemed to have been assessed on 30.06.2012. Therefore, any assessment after this date should be under Section 27, with a limitation of six years from the date of the original assessment. The court emphasized that the impugned order dated 22.04.2022 should comply with the limitation prescribed under Section 27, requiring assessments to be made within six years from the original assessment date. Despite the issuance of notices, the court found that the assessment initiated on 06.08.2019 was beyond the limitation period, rendering the consequential assessment also time-barred.

Considering the jurisdictional aspect, the court cited relevant judgments to support its decision. Referring to judgments such as Commissioner of Income Tax, Chennai vs. Alagendran Finance Ltd., and ITW Signode India Ltd., vs. CCE, the court reiterated that a proceeding beyond the limitation period is void ab initio. The court highlighted that the question of limitation is fundamental to jurisdiction, making an order barred by limitation a nullity. Therefore, the court concluded that the impugned proceedings were jurisdictionally flawed due to being time-barred, leading to the setting aside of the impugned order. The court invoked Article 226 of the Constitution of India to address the jurisdictional issue and disposed of the Writ Petition, emphasizing that an order barred by limitation is legally invalid.

---