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<h1>Revision allowed: time-barred assessment set aside for exporter due to anti-dating, revenue's failure to prove service</h1> <h3>M/s Avant Grade Carpets P Ltd. Versus The Commissioner of Trade Tax U.P. Lucknow</h3> HC allowed the revision, holding the assessment time-barred and the impugned orders unsustainable. The Court accepted the revisionist's allegation of ... Applicability of time limitation - time barred assessment - remand order passed by Tribunal exparte assessment was made - HELD THAT:- Serious allegation of anti-dating has been made by the revisionist that the last date for passing the order was 27.11.2002 and the order was served upon the dealer on 29.11.2002, which is beyond the statutory period of limitation. To the said submission, rebuttal was made that the order was passed on 12.11.2002 and was given to the process server on 13.11.2002, but in absence of original record of the process server, which has not been produced at any stage, the contention of the revisionist cannot be disbelieved. It is the duty of the authorities to maintain all the records of pending cases. In the case in hand, when revision was pending before the Court, it was the duty of the authorities to maintain all original record as contemplated under the Act. In absence of due diligence on the Revenue, the assessee/dealer/revisionist cannot be permitted to suffer. When one of the core issues was with regard to limitation was under consideration of this Court, which was also taken before the authority below, then it becomes double duty of the Revenue to maintain the same. Once the authorities failed to exercise their duties for maintaining the record as well as the record of the process server, no adverse inference can be drawn against the revisionist and the allegations for anti-dating fortifies and the benefit must flow to the revisionist - assessee, instead of Revenue - The peculiar fact of the case is that the revisionist is an exporter for the previous and subsequent years and no liability of tax was determined. The impugned orders cannot be sustained in the eyes of law - revision allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether an assessment order issued after a remand is time-barred under the statutory six-month limitation in section 21(5) when the order is served on the dealer after the statutory last date. 2. Whether alleged anti-dating/contrivance of the assessment order (to meet limitation) can be inferred in the absence of original process-server records and, if so, what consequence follows. 3. What is the effect of the Revenue's failure to produce original record/evidence relevant to limitation and service on the burden of proof and admissible inferences. 4. Whether, on the particular facts (export business with no tax liability found in previous and subsequent years), the impugned assessment can be sustained when the limitation issue remains unresolved in the Revenue's favour. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Limitation under section 21(5): legal framework Legal framework: Section 21(5) prescribes that where an order is recalled by the appellate/tribunal authority, the assessing authority must pass the assessment within six months from the date of recall. The limitation is mandatory and governs the time for framing an assessment after remand. Interpretation and reasoning: The Court accepts the legal proposition that the last date for framing and serving an assessment after recall/remand is computed strictly under section 21(5). The revisionist identified clear dates: recall on 27.05.2002 and thereby a statutory last date of 27.11.2002. Service on 29.11.2002 would therefore be beyond the statutory period if the order had in fact been passed/served outside the six-month window. Ratio vs. Obiter: Ratio - the statutory six-month period under section 21(5) is a mandatory limitation, and compliance with it is an essential condition for validity of the assessment after remand. Conclusion: The Court recognizes that service after the statutory last date would render the assessment time-barred unless credible evidence shows earlier passing/valid service within the period. Issue 2 - Allegation of anti-dating and probative value of process-server records Legal framework: Determination of service date and genuineness of the date of order depends on contemporaneous records (e.g., process-server diary/records); anti-dating is impermissible and, if proven, vitiates the assessment. Precedent treatment: A prior decision relied upon by the revisionist (referred to in the pleadings) was noted as authority for the proposition that service beyond limitation invalidates assessment; the Tribunal, however, held the assessment within time. The Court did not expressly overrule or follow that precedent on technical grounds but applied established principles concerning records and proof of service. Interpretation and reasoning: The Revenue asserted the order was passed on 12.11.2002 and handed to the process server on 13.11.2002 (i.e., within limitation). The Court directed production of original process-server records to verify this. The Revenue failed to produce those originals and later filed an affidavit stating the required process-server record is not available. Given the absence of original records and the centrality of that evidence to rebut the limitation objection, the Court held that the allegation of anti-dating was fortified rather than rebutted. Ratio vs. Obiter: Ratio - where the Revenue fails to produce contemporaneous records that are central to proving timely passing/service of an order, adverse inferences cannot be drawn against the assessee; instead, the benefit must accrue to the assessee. Conclusion: In the absence of original process-server records the Court inferred that the Revenue did not satisfactorily prove service within the statutory period; allegations of anti-dating are strengthened and weigh in favour of the revisionist. Issue 3 - Effect of Revenue's failure to maintain/produce records and burden of proof Legal framework: The burden lies on the Revenue to prove that statutory requirements (including timely service) have been met; public authorities are under a duty to maintain relevant records of proceedings and service. Interpretation and reasoning: The Court emphasized that when limitation is a live, specifically raised issue, it is incumbent on the Revenue to preserve and produce relevant original records. The failure to maintain or produce such records - especially when the Tribunal and this Court had expressly required production - undermines the Revenue's claim of timely service. The Court held that lack of due diligence by the Revenue disentitles it from drawing adverse inference against the assessee; rather, the evidentiary deficit benefits the assessee. Ratio vs. Obiter: Ratio - where a core issue depends on official records, and the Revenue fails to produce them despite directions, the failure shifts the evidentiary consequences in favor of the assessee and precludes sustaining the assessment on the limitation point. Conclusion: The Revenue's omission to preserve/produce process-server records amounted to failure of duty; the burden of proof on timely service was not discharged and the assessee is entitled to the benefit. Issue 4 - Relevance of the assessee's export operations and absence of tax liability in context of sustaining the impugned assessment Legal framework: Merits of tax liability and assessment quantum are distinct from procedural validity (limitation/service); however, procedural irregularity (time-barred assessment) invalidates the assessment irrespective of merits. Interpretation and reasoning: The Court noted that the revisionist was a 100% export unit and, for surrounding years, no tax liability was determined. This factual matrix reinforced the view that the Revenue should not be allowed to sustain an assessment by relying on unproven service dates or anti-dating, particularly where procedural strictness (limitation) is intended to protect taxpayers from stale or procedurally tainted assessments. Ratio vs. Obiter: Obiter (supporting context) - while not decisive of limitation, the factual background of continued export status and absence of tax in adjacent years made it less tenable for the Revenue to rely on an unverified service chronology to defeat the limitation objection. Conclusion: Given the procedural failure of the Revenue and the factual context (export business with no tax found in nearby years), the impugned assessment could not be sustained. Final Conclusion The Court concluded that the assessment could not be sustained because (a) the statutory six-month limitation under section 21(5) governed the remand period, (b) the Revenue failed to produce original process-server records necessary to prove timely passing/service, (c) the failure to maintain/produce records warranted that no adverse inference be drawn against the revisionist and, instead, the benefit flow to the revisionist, and (d) on the peculiar facts (export unit with no tax liability in relevant years) the impugned orders were set aside. The question of law on limitation was answered in favour of the revisionist and against the Revenue.