AI Drafter 
TaxTMI 
TaxTMI 
2024 (6) TMI 901
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....taken up for consideration on one preliminary objection raised by the petitioners and for which some of the writ petitions were entertained at the show cause notice level, some at the level of assessment orders, and some against the appellate orders. 3. The point for consideration by way of the preliminary objection raised by the petitioners are whether the show cause notice or the assessment orders passed in all these bunch of writ petitions are sustainable at all in view of the specific period of limitation prescribed under Section 21 (3) and Section 21 (4) of the Telangana Value Added Tax Act, 2005 (for short, 'TSVAT Act'). 4. Before we delve into the issue of limitation, it would be relevant at the outset itself to reproduce the two sub-sections under which the petitioners are backing upon their case. The said two sub-sections of TSVAT Act read as under: "(3) Where the authority prescribed is not satisfied with a return filed by the VAT dealer or TOT dealer or the return appears to be incorrect or incomplete, he shall assess to the best of his judgment within four years of due date of the return or within four years of the date of filing of the return whichever i....
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....2 - 15. 26152 of 2023 2016-17 - 13.09.2021 - 16. 26297 of 2023 2017-18 (April 2017 to June 2017) - 19.09.2021 - 8. From the details of the writ petitions provided in the chart above, prima facie, there is no dispute so far as the show cause notices which are under challenge in few writ petitions and the assessment orders in other writ petitions have all been passed beyond a period of four (04) years as is stipulated under Section 21 (3) and 21 (4) of the Act. Section 6 of the Telangana State Entry Tax Act, 2001, clearly envisages that for the purpose of assessment, inspection, seizure, enforcement of payment of any tax, so also payment of interest or penalty by the dealers, the provisions of law to be applied by the authority concerned is that which is provided in the Telangana State General Sales Tax Act, 2005. The Telangana State General Sales Tax Act subsequently has been abolished and the TSVAT Act has been introduced and therefore it is the provisions of the TSVAT Act which stands imported for Entry Tax assessment also and it is in this context that Section 21 of the TSVAT Act is being invoked. 9. Another fact which is apparent from....
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....es where the show cause notices have been challenged. It is the further contention of the learned Special Government Pleader that since they are at the show cause stage, the assessee or the dealers would be at liberty to raise all their submissions, contentions and defense through their counter and thereafter it should be left for the Adjudicating Authority or the Appellate Authority or the Assessment Officer, as the case may be, to take an appropriate decision. 14. According to the learned Special Government Pleader the authority concerned had initiated the proceedings in all these cases in the teeth of the judgment of the Hon'ble Supreme Court in the case of M/s. Jindal Stainless Ltd & Anr vs. State of Haryana (2017) 12 SCC 1 wherein in a batch of petitions, one among them also being that of State of A.P. vs. M/s. Sree Rayalseema Alkalies Company Limited. The Hon'ble Supreme Court held that levy of tax by the State under the Act is upon entry of notified goods and the same cannot be equated with levy of tax on sale of goods levied by the State under Entry 54 List II of the VII Schedule of the Constitution of India. It was also held by the Hon'ble Supreme Court that in addition....
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....if all the words providing for exemption are construed in its letter and spirit, it would indicate that such exemption is available only in respect of goods which are put in, the process of manufacture to bring about a change resulting in the new goods coming into existence. 18. According to the learned Special Government Pleader the term 'input' used in sub-section (2) of Section 3 would indicate indirect nexus of the modified goods to the resultant new product emerging out of manufacturing process and in order to be eligible for such an exemption under Section 3 (2) of the Entry Tax Act, there has to be a direct nexus between the input so used and the resultant output. All the other goods which may aid the process of manufacture cannot be considered as inputs since the legislature sought to provide for exemption only in respect of a class of goods which go into manufacture of other goods as 'inputs'. 19. Having heard the contentions put forth on either side and on perusal of records, it would be relevant at this juncture to take note of Section 21 (7) of the TSVAT Act also, which has been strongly relied upon by the learned Special Government Pleader in defending the action....
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.... the learned Special Government Pleader may not have sufficient force of law for the simple reason that the judgment of the Hon'ble Supreme Court in the aforesaid batch of matters was delivered on 11.11.2016, and the impugned notices issued in most of these cases itself or the assessment orders passed was much beyond the period of four years from the date of the judgment and the Hon'ble Supreme Court in the aforesaid batch of matters dealing with the validity of the provisions of the Entry Tax. This argument also would not be sustainable for the reason that there are petitioners in whose cases the respondent-Authorities have not waited till the judgment of the Hon'ble Supreme Court to commence the proceedings so as to take a uniform stand so far as the limitation is concerned; and in a few cases, the notices were issued much before the decision of the Hon'ble Supreme Court though the adjudication part has been done subsequently, but notices were definitely been issued earlier which is sufficient to show that pendency of the matter before the Hon'ble Supreme Court was not a criteria at all. 21. The Hon'ble Supreme Court in the case of State of Punjab and others vs. Shre....
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....ed) It was also observed that upon the lapse of the period of limitation prescribed, the right of the Department to assess an assessee gets extinguished and this extension confers a very valuable right on the assessee. 23. ... ... ... 24. The argument of the learned Senior Counsel for the appellants based on Section 148 CPC would be of no consequence. This section categorically states that power to enlarge the period can be exercised even when period originally fixed has expired. Likewise, reliance upon Section 139(2) of the Income Tax Act is misconceived. That provision is made for the benefit of the assessee which empowers the assessing officer to grant an extension of time for filing of the return of income and, therefore, obviously will have no bearing on the issue at hand. Moreover, this Court in Ajanta Electricals case [CIT v. Ajanta Electricals, (1995) 4 SCC 182], which is relied upon by the learned counsel for the appellant, held that the time can be extended even after the time allowed originally has expired on the interpretation of the words "it has not been possible" occurring in Section 133(2) of the Act. The Court, thus, opined that the afore....
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....s the common law before the making of the Act/Rules ; (2) what was the mischief and defect for which the common law did not provide ; (3) what remedy the Legislature has resolved to cure ; and (4) the true reason of the remedy. The court is always to make such construction as shall : (a) suppress the mischief and advance the remedy ; and (b) suppress subtle inventions and evasions for the continuance of the mischief pro privato commodo (for private benefit) ; and (c) add force and life to the cure and remedy according to the true intent of the makers of the Act/Rules pro publico (for the public good). The Heydon's Rule is applied in order to suppress the mischief which was intended to be remedied as against the literal rule which could have otherwise covered the field. (Parayankandiyal Eravath Kanapravan Kalliani Amma v. K. Devi (1996) 4 SCC 76, Goodyear India Ltd. v. State of Haryana [1997] 105 STC 465 (P&H) ; (1997) 116 PLR 252, Ameer Trading Corpn. Ltd. v. Shapoorji Data Processing Ltd. (2004) 1 SCC 702, Halsbury's Laws of England, Volume 44(1), 4th Reissue, para 1474, pages 906-07, Bengal Immunity Company Li....
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....f the APGST Act, enabled the Commissioner to defer assessment proceedings, and thereby ensure that assessment proceedings, under the VAT Act, are not interdicted before its completion, and are completed without hindrance. In the absence of a provision in the VAT Act, similar to section 14 (6) of the APGST Act, none of the authorities under the VAT Act can be said to have been empowered to defer assessment proceedings. 23. Dealing with the words "or" as well as "and", recently the Hon'ble Supreme Court in the case of Commissioner, Customs Central Excise and Service Tax, Patna vs. Shapoorji and Pallonji & Company Pvt. Ltd. (2023) S.C.C. Online SC 1330 held at paragraph Nos. 22 and 23 as under, viz., "22. Having noticed some of the precedents in the field of interpretation of statutes, we now move on to a little bit of English grammar. The word "or" as well as the word "and" is a conjunction; and it is well known that a conjunction is used to join words, phrases, or clauses. On how the conjunctions "or" and "and" are to be read, guidance could be drawn from authoritative texts and judicial decisions. As per Justice G.P. Singh's Principles of Statutory Interpretation, t....
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....alter or amend the law. It can only interpret the provision, to make it meaningful and workable so as to achieve the legislative object, when there is vagueness, ambiguity or absurdity. The purpose of interpretation is not to make a provision what the Judge thinks it should be, but to make it what the legislature intended it to be." 24. Very recently, a Division Bench of the Gujarat High in the case of Reliance Industries Ltd. and another vs. State of Gujarat and others (2020) 82 G.S.T.R. 32 (Guj), held at paragraph Nos. 168, 170 & 171 as under, viz., "168. The illustration given by Mr. Soparkar for the purpose of demonstrating that the impugned amendment is arbitrary and unreasonable is quite apt. ... ... ... 170. Then we are taking about unreasonableness in the impugned provision, we should look into the English decision in the case of Kruse v. Johnson [1895-90] All ER 105. It has been observed as under : "Unreasonableness in what sense ! If for instance they were found to be partial and unequal in their operation between different classes, if they were manifestly unjust, if they disclosed bad faith, if they involved such oppressive or gratu....
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....d after lapse of a long number of years and the rule of limitation applicable in that behalf is said to be three years from the date of discovery of mistake of law. The incongruity of the situation needs no emphasis." 25. Earlier also the Hon'ble Supreme Court in the case of Spentex Industries Limited vs. Commissioner of Central Excise and others (2016) 1 S.C.C. 780, dealing with the interpretation of the word "or" at paragraph Nos. 28 to 32, held as under, viz., "28. The aforesaid discussion leads us to the only inevitable consequence which is this: the word "OR" occurring in Rule 18 cannot be given literal interpretation as that leads to various disastrous results pointed out in the preceding discussion and, therefore, this word has to be read as "and" as that is what was intended by the rule-maker in the scheme of things and to carry out the objectives of Rule 18 and also to bring it on a par with Rule 19. 29. We are conscious of the principle that the word "or" is normally disjunctive and "and" is normally conjunctive (see Union of India v. Kamalabai Harjivandas Parekh [AIR 1968 SC 377 : (1968) 1 SCR 463] ). However, there may be circumstances where these w....
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....e Rules which express manifest intention of the legislature which provide for granting of both kinds of rebates to the assessee. In Mazagaon Dock Ltd. [AIR 1958 SC 861 : (1959) 1 SCR 848], this aspect was explained in the following manner: (AIR p. 865-66, para 10) "10. The word 'or' in the clause would appear to be rather inappropriate, as it is susceptible of the interpretation that when some profits are made but they are less than the normal profits, tax could only be imposed either on the one or on the other, and that accordingly a tax on the actual profits earned would bar the imposition of tax on profits which might have been received. Obviously, that could not have been intended, and the word 'or' would have to be read in the context as meaning 'and'. Vide Maxwell's Interpretation of Statutes, 10th Edn., pp. 238-39. But that, however, does not affect the present question which is whether the word 'derived' indubitably points to the business of the non-resident as the one taxable under Section 42 (2), and for the reasons already given, the answer must be in the negative." 26. The two decisions referred to by the learned Special Government Pleader for the respon....
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....rder is for the year 2014-15, i.e., which is four (04) years from the last date of financial year, i.e., from 31.03.2015 to 30.01.2019, and the impugned show-cause notice was issued on 30.01.2019 and the Assessment Order was passed on 09.02.2019, i.e., just around ten (10) days' time from the date of issuance of the show-cause notice. Therefore, though the period of limitation hits the assessment up till January, 2015, but the period February and March, 2015, the period comes within the four years of limitation prescribed. Thus, the Assessment Order would be sustainable on the aspect of limitation only for the period February and March, 2015. However, the learned Senior Counsel appearing on behalf of the petitioners drew the attention of the Court to the hasty manner in which the proceedings were concluded, i.e., the show-cause notice issued on 30.01.2019 and also the final Assessment Order passed on 09.02.2019, i.e., just around ten (10) days. He further made a categorical statement that even the show-cause notice which was issued by the respondent-Authorities was not effectively served and no opportunity of personal hearing was provided to the petitioners. He, therefore, contende....