Incomplete VAT returns may trigger assessment without express limitation, while penalty remains subject to a six-year time bar.

Section 22(4) of the Tamil Nadu Value Added Tax Act, 2006 applies as a stand-alone provision for non-filing, incomplete or incorrect returns, and it does not import the limitation period in Section 27. The power must still be exercised within a reasonable period, and the impugned action was found to have been taken within that time. Penalty under Section 22(5) is separately governed by an express six-year limit from the assessment order, and the penalty orders here were passed within that period. On those findings, the assessment orders and consequential penalty were sustained.

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Issues: (i) whether proceedings under Section 22(4) of the Tamil Nadu Value Added Tax Act, 2006 were barred by limitation; (ii) whether the penalty imposed under Section 22(5) of the Tamil Nadu Value Added Tax Act, 2006 was time-barred; and (iii) whether the impugned assessment orders were liable to be interfered with.

Issue (i): whether proceedings under Section 22(4) of the Tamil Nadu Value Added Tax Act, 2006 were barred by limitation

Analysis: Section 22(4) operates as a stand-alone provision for cases of non-filing of return, incomplete return, incorrect return, or absence of prescribed documents or proof of payment. The provision does not prescribe any specific period of limitation for initiating or passing an order. The limitation period under Section 27 is not imported into Section 22(4). At the same time, the power under Section 22(4) must be exercised within a reasonable period. On the facts, the impugned action was taken within such reasonable period.

Conclusion: The proceedings under Section 22(4) were not barred by limitation and the challenge on that ground failed.

Issue (ii): whether the penalty imposed under Section 22(5) of the Tamil Nadu Value Added Tax Act, 2006 was time-barred

Analysis: Section 22(5) specifically provides that penalty cannot be imposed after six years from the date of the assessment order. The assessment orders were dated 11.01.2021, and the penalty orders were passed well within the six-year period contemplated by the statute. The court also noted that the notices and orders were issued before expiry of the relevant time limits.

Conclusion: The penalty under Section 22(5) was within limitation and the challenge failed.

Issue (iii): whether the impugned assessment orders were liable to be interfered with

Analysis: The returns were found to be incomplete or incorrect, resulting in short payment of tax. Since Section 22(4) was validly invoked and the consequential penalty was also within time, no legal infirmity was made out in the assessment orders.

Conclusion: The impugned assessment orders were upheld.

Final Conclusion: The writ petitions failed on merits, and the assessments and consequential penalty were sustained.

Ratio Decidendi: Where a return is incomplete or incorrect, Section 22(4) of the Tamil Nadu Value Added Tax Act, 2006 may be invoked without any express statutory limitation, though the power must still be exercised within a reasonable period, and penalty under Section 22(5) remains subject to its own six-year limitation.

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