Writ petitions dismissed; assessment and penalty under s.53(1)(ii) AP VAT Act upheld for 2016-17 under-declared purchases

The HC dismissed the writ petitions, upholding the assessment and levy of penalty under s.53(1)(ii) of the AP VAT Act. The court found the show-cause notice alleged under-declaration of purchases for 2016-17 and that s.21(5) permitted assessment within six years from filing the return; the SC's extension of limitation during the COVID period was held applicable. The SCN was not time-barred, statutory/alternate remedies were available, and the petitions were therefore dismissed.

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Issues: (i) Whether the period of limitation as extended by the Hon'ble Supreme Court during the Covid period applies to issuance of show cause notices, passing of assessment orders and related quasi-judicial proceedings; (ii) Whether Section 21(5) of the AP VAT Act empowers assessment within six years on facts indicating willful evasion, thereby validating the impugned assessment and penalty.

Issue (i): Whether the Supreme Court's extension of limitation during the Covid period applies to quasi-judicial proceedings such as issuance of show cause notices, passing of assessment orders and filing of appeals arising therefrom.

Analysis: The Supreme Court extended the period of limitation from 15.03.2020 to cover all proceedings where limitation applies. The Court considered the operational constraints on authorities and litigants during the Covid period, including limited staff attendance, and found that the extension was intended to cover all proceedings irrespective of whether they are before courts, tribunals or quasi-judicial authorities.

Conclusion: The extension of limitation granted by the Supreme Court during the Covid period applies to quasi-judicial proceedings including issuance of show cause notices and passing of assessment orders.

Issue (ii): Whether Section 21(5) of the AP VAT Act authorises assessment within six years where facts indicate under-declaration or willful evasion, validating the impugned assessment and consequent penalty.

Analysis: The show cause notice and revised notice contained allegations of significant under-declaration of purchases and referenced that penalty proceedings would be initiated for offences under the Act. The material in the notices indicated under-declaration for the relevant year and cited Section 21(5) as applicable. Section 21(5) permits assessment within six years from the date of filing of the return or first return relating to the offence where conditions such as willful evasion are implicated.

Conclusion: Section 21(5) of the AP VAT Act applies on the facts presented and permits assessment within six years; the impugned assessment and penalty are sustainable on limitation and jurisdictional grounds.

Final Conclusion: The writ petitions challenging the assessment and penalty are without merit and are dismissed; an efficacious statutory appeal remedy exists before the appellate forum.

Ratio Decidendi: The Supreme Court's Covid-period extension of limitation applies to quasi-judicial proceedings, and where a show cause notice raises facts indicative of under-declaration or willful evasion, Section 21(5) of the AP VAT Act permits assessment within six years from the relevant return, validating such assessments and related penalties.

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