Limitation extension for litigants does not extend tax assessment time; delayed sales tax assessments were largely barred under the four-year rule.

A general extension of limitation granted during the pandemic did not enlarge the statutory time available to sales tax assessing authorities to complete assessments. Under Rule 14A(5A), a deemed assessment arises if no assessment is made within four years from the return due date, so the assessment power had to be exercised within that period. On the facts, the assessments for 2014-2015 and 2016-2017 were time-barred, while the 2015-2016 assessment was partly barred, with only March 2016 left open for fresh assessment. The HC accordingly set aside the barred assessments and preserved a limited remand for the surviving period.

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Issues: (i) whether the benefit of extension of limitation granted by the Supreme Court during the pandemic applied to the assessing authorities under the sales tax regime; (ii) whether the assessment orders were barred by limitation under Rule 14A(5A) of the A.P. Central Sales Tax (A.P.) Rules.

Issue (i): whether the benefit of extension of limitation granted by the Supreme Court during the pandemic applied to the assessing authorities under the sales tax regime

Analysis: The rule extending limitation for litigants could not be treated as extending the statutory time available to the assessing authorities for completing assessments. The benefit of such extension was confined to parties approaching forums after expiry of limitation and did not enlarge the power period available under the taxing statute.

Conclusion: The extension of limitation did not apply in favour of the assessing authorities.

Issue (ii): whether the assessment orders were barred by limitation under Rule 14A(5A) of the A.P. Central Sales Tax (A.P.) Rules

Analysis: Rule 14A(5A) creates a deeming assessment if no assessment is made within four years from the date of filing of the return. Since returns under the Central Sales Tax regime are filed monthly by the 20th day of the succeeding month, the assessment power had to be exercised within four years from that due date. On the facts, the assessments for 2014-2015 and 2016-2017 were beyond time. For 2015-2016, the assessment for March 2016 could still be made, but the rest of the year was time-barred.

Conclusion: The assessments for 2014-2015 and 2016-2017 were barred by limitation, and the assessment for 2015-2016 was partly time-barred with only March 2016 left open for fresh assessment.

Final Conclusion: The writ petitions succeeded to the extent of setting aside the time-barred assessments, while preserving a limited remand for fresh assessment of March 2016 in one assessment year.

Ratio Decidendi: A general extension of limitation granted for litigants does not enlarge the statutory period for revenue authorities to complete assessments, and where the assessment rule prescribes a four-year outer limit from the return due date, assessments made beyond that period are invalid.

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