VAT assessment limitation: COVID-19 extension not available to the assessing authority, and time-barred months were set aside.
The Andhra Pradesh VAT limitation period under Section 21(4) requires assessments to be completed within four years from the end of the relevant period. The Supreme Court's COVID-19 suo motu extension of limitation was held unavailable to an assessing authority for completing assessments, so it could not save delayed assessments. Where part of the assessment period had already become time-barred on the assessment date, those months were unsustainable. The assessments were therefore set aside only to the extent they covered time-barred months, and the matters were remanded for fresh consideration only for the periods still within limitation.
Issues: (i) Whether the period of limitation for completing the assessments under Section 21(4) of the Andhra Pradesh Value Added Tax Act, 2005 was extended by the Supreme Court's suo motu orders during the COVID-19 period so as to save the impugned assessments; (ii) whether the assessments were barred by limitation in respect of the months for which the statutory period had already expired.
Issue (i): Whether the period of limitation for completing the assessments under Section 21(4) of the Andhra Pradesh Value Added Tax Act, 2005 was extended by the Supreme Court's suo motu orders during the COVID-19 period so as to save the impugned assessments.
Analysis: The assessments were made under Section 9(2) of the Central Sales Tax Act, 1956 read with Section 21(4) of the Andhra Pradesh Value Added Tax Act, 2005. The limitation under Section 21(4) requires completion of assessment within four years from the end of the relevant period. The Court followed the view that the Supreme Court's suo motu extension of limitation was intended to address difficulty faced by litigants and was not available to an assessing authority for completing assessments.
Conclusion: The benefit of the Supreme Court's COVID-19 limitation extension was not available to the assessing authority.
Issue (ii): Whether the assessments were barred by limitation in respect of the months for which the statutory period had already expired.
Analysis: On the dates of the assessment orders, part of the assessment periods had already crossed the limitation period, while some later months had not. The Court therefore treated the assessments as unsustainable to the extent they covered time-barred months and capable of being examined only for the balance period that remained within limitation.
Conclusion: The impugned assessments were set aside to the extent they related to time-barred months, and the matters were remanded only for the periods still within limitation.
Final Conclusion: The writ petitions succeeded only in part, with relief confined to the limitation issue and a restricted remand for fresh consideration of the surviving assessment periods.
TaxTMI 
AI Drafter ✕
TaxTMI 
