2025 (5) TMI 1815 - HC - VAT / Sales Tax

Tax Assessment Order Invalidated Due to Expired Limitation Period and Jurisdictional Irregularities Under Entry of Goods Act

The SC examined a tax assessment order's validity under the UP Tax on Entry of Goods Act. The court found the assessment order time-barred, as it was ... Challenge to Assessment Order dated 31.12.2013 for A.Y. 2003-04 passed u/s 9 (4) of UP Tax on Entry of Goods Into Local Areas Act, 2007, framed by the Deputy Commissioner, Sector 18, Commercial Tax, Ghaziabad - time barred or not - HELD THAT:- It is not in dispute that revisionist approaches this Court for challenging the validity of Entry Tax Act and the interim order was granted in favour of the revisionist/ petitioner therein. The said writ petition was dismissed vide order dated 28.3.2012 to which the respondent authority has applied for certified copy of the order on 31.5.2012 and delivery of the same was taken on 26.7.2012 though the same was ready on 12.6.2012. Thereafter, after a long gap, the same was sent vide letter dated 13.2.2013 by the office of Commercial Tax, High Court Works to the Deputy Commissioner, Commercial Tax, Sector 18, Ghaziabad. Once the letter was received at Ghaziabad, the order ought to have been passed accordingly, within six months from its receipt. The record shows that originally the assessing authority of the revisionist was Deputy Commissioner, Assessment, Commercial Tax, Sector 1, Hapur but the order of the assessment has been passed by the Deputy Commissioner, Commercial Tax, Sector 18, Ghaziabad. The respondent authority at no stage has brought on record any material to show as to how the case of the revisionist has been transferred from Deputy Commissioner, Assessment Commercial Tax, Sector 1, Hapur to Deputy Commissioner, Commercial Tax, Sector 18, Ghaziabad. The record further shows that a report was called for by the Tribunal and the same was submitted by letter dated 15.2.2023, copy of which has been annexed as Annexure no. 9 to this revision but how the jurisdiction of the assessing authority of the revisionist was transferred and under which order, the same has neither been brought on record nor a word has been whispered in that respect. In the absence of any such material available on record, the change of assessing authority, who has passed the present assessment order, is not justified. Conclusion - The assessment order dated 31.12.2013 was time-barred as it was passed beyond the six-month limitation period from the date of receipt of the certified copy of the dismissal order of the writ petition, in violation of Section 21(6) of the UP Tax on Entry of Goods Into Local Areas Act, 2007. The matter requires reconsideration by the assessing authority and for that purpose, the impugned order passed by the Commercial Tax Tribunal is hereby set aside - Revision allowed. 1. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered by the Court in this matter are:- Whether the Assessment Order dated 31.12.2013 for the Assessment Year 2003-04, passed under Section 9(4) of the Uttar Pradesh Tax on Entry of Goods Into Local Areas Act, 2007, is time-barredRs.- Whether the period of limitation for passing the assessment order should be calculated from the date of dismissal of the writ petition challenging the proceedings or from the date of receipt of the certified copy of the dismissal order by the Commercial Tax DepartmentRs.- Whether the assessment order passed by the Deputy Commissioner, Commercial Tax, Sector 18, Ghaziabad, is valid when the original assessing authority was the Deputy Commissioner, Assessment Commercial Tax, Sector 1, Hapur, and no material was placed on record to show transfer of jurisdictionRs.2. ISSUE-WISE DETAILED ANALYSISIssue 1: Whether the assessment order dated 31.12.2013 is time-barredRs.The legal framework governing limitation for passing assessment orders under the UP Tax on Entry of Goods Into Local Areas Act, 2007, specifically Section 21(6), was examined. Section 21(6) excludes the period during which the assessment proceedings were stayed by the Court from the limitation period.The revisionist had challenged the assessment proceedings by filing a writ petition in 2006, which was stayed until its dismissal on 28.3.2012. The State obtained the certified copy of the dismissal order on 26.7.2012. The assessment order was passed on 31.12.2013.The revisionist contended that the limitation period should be counted from the date of dismissal of the writ petition or at the latest from the date when the certified copy was received by the assessing authority, and that the assessment order passed beyond six months from this date was time-barred.The Court noted that the assessment order was passed after a considerable delay beyond six months from the receipt of the certified copy of the dismissal order. The Court emphasized that the assessment order ought to have been passed within six months from the date of receipt of the certified copy, as per the statutory mandate.The State, relying on Section 21(6), argued that the assessing authority was entitled to pass the order after receipt of the higher court's order. However, the Court found that the delay was not justified and the period of limitation was not properly adhered to.Precedents cited include the judgment in Pearless General Finance and Investment Co. Ltd., which clarified the meaning of assessing authority and the procedural requirements for limitation, and M/s Ganesh Plywood Emporium Varanasi, which supported the State's position on the authority to pass orders post receipt of higher court orders.Issue 2: Proper computation of limitation period and effect of stayThe Court analyzed the effect of the stay granted by the writ petition and the exclusion of the stay period from limitation under Section 21(6). The stay was effective from the date of filing the writ petition in 2006 until its dismissal in 2012.The revisionist argued that the limitation period should commence only after the dismissal of the writ petition and receipt of the certified copy by the assessing authority. The Court agreed that the stay period is excluded and that the limitation period starts only after the stay ends and the assessing authority receives the certified copy.The Court held that the assessment order passed beyond six months from the receipt of the certified copy was not in conformity with the statutory limitation period.Issue 3: Validity of assessment order passed by Deputy Commissioner, Commercial Tax, Sector 18, Ghaziabad instead of original assessing authorityThe revisionist challenged the jurisdiction of the Deputy Commissioner, Commercial Tax, Sector 18, Ghaziabad, who passed the assessment order, when the original assessing authority was the Deputy Commissioner, Assessment Commercial Tax, Sector 1, Hapur.The Court scrutinized the record and found that no material or official order was placed on record to show transfer of jurisdiction or reassignment of the case from the original assessing authority to the officer at Sector 18, Ghaziabad.The Tribunal had called for a report, but the report did not clarify the basis for the change in jurisdiction. The Court held that in the absence of any such material or explanation, the change of assessing authority was not justified.The Court emphasized that the revisionist must be informed in detail of any such transfer along with copies of relevant orders while passing any fresh assessment order.3. SIGNIFICANT HOLDINGS- The Court held that the assessment order dated 31.12.2013 was time-barred as it was passed beyond the six-month limitation period from the date of receipt of the certified copy of the dismissal order of the writ petition, in violation of Section 21(6) of the UP Tax on Entry of Goods Into Local Areas Act, 2007.- The Court stated: 'Once the letter was received at Ghaziabad, the order ought to have been passed accordingly, within six months from its receipt.'- The Court underscored the necessity of proper jurisdictional authority in passing assessment orders, noting: 'In the absence of any such material available on record, the change of assessing authority, who has passed the present assessment order, is not justified.'- The Court remanded the matter to the assessing authority for fresh assessment in accordance with law, directing that the revisionist be informed in detail of any transfer of jurisdiction along with copies of relevant orders.- The question of law as to whether the assessment order was time-barred was answered in the affirmative, and the impugned order of the Commercial Tax Tribunal was set aside on this ground.