2021 Supreme(Bom) 1051

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Ujjal Bhuyan, Milind N Jadhav, JJ.
Greatship (india) Ltd - Appellant
Versus
State Of Maharashtra - Respondent
Writ Petition (Stamp) No. 92630 of 2020
Decided On : 30-04-2021

An assessment order has to be made known either directly or constructively to the party affected by the order in order to enable him to prefer an appeal. Mere writing of an order and keeping the same in file would be no order in the eye of law. The order must be communicated either directly or constructively.

Headnote:

MVAT ACT - CST ACT - ASSESSMENT - LIMITATION - SERVICE OF ORDER - MVAT RULES - INTERNAL CIRCULAR - BEST JUDGMENT ASSESSMENT - ADMINISTRATIVE APPROVAL - MANUAL ISSUANCE OF ASSESSMENT ORDERS - PROCEDURE - SERVICE OF ASSESSMENT ORDERS - ELECTRONIC SERVICE - PROHIBITION - COMMUNICATION OF ORDER - JURISDICTION - WRIT PETITION - ALTERNATIVE REMEDY - JURISDICTIONAL ISSUE - WRIT PETITION MAINTAINABLE: 1. Assessment orders passed under section 23(2) of the MVAT Act and section 9(2) of the CST Act read with section 23(2) of the MVAT Act for the assessment period 01.04.2015 to 31.03.2016 were stated to have been passed manually on 20.03.2020. The limitation period for passing such assessment orders was four years from the end of the year containing the period to which the return relates. Since the assessment period was 01.04.2015 to 31.03.2016, the four year limitation period would expire on 31.03.2020. Therefore, if the assessment order was required to be passed under section 23(2) of the MVAT Act for the aforesaid assessment period, it had to be passed on or before 31.03.2020. 2. As per rule 87(1) of the MVAT Rules, assessment orders and demand notices can be served by different methods including by hand delivery and by sending a scanned copy or electronically generated and digitally signed copy by email. In the case of personal service (hand delivery), the officer or person serving an assessment order or notice shall require the signature of the person to whom those are delivered as acknowledgment of service which must be endorsed on the original order or notice or on a separate slip. 3. Internal circular No.4A of 2020 dated 20.03.2020 issued by the office of the Commissioner of State Tax, Maharashtra State laid down the procedure for manual issuance of assessment orders. Clause (III) of the circular mandated that assessment orders passed manually should not be served electronically to the dealers as those would have to be delivered to them manually which date will be considered for all legal purposes. Further, there was clear prohibition upon the assessing officer that if an assessment order is passed manually and subsequently entered into the system, printout of the same should not taken out as it would not be considered to be a proper assessment order but just a document created for the purpose of data entry. 4. The impugned orders of assessment could not have been passed on 20.03.2020 or before 31.03.2020. Those were passed beyond the limitation period of 31.03.2020 and thus are non est in the eye of law. In such a case, question of petitioner not availing the alternative remedy of appeal does not arise. That apart, when it is a question of jurisdiction or lack of jurisdiction, an aggrieved assessee cannot be denied relief under Article 226 of the Constitution of India only on the ground of alternative remedy.

Fact of the Case:

Petitioner, a company providing specialized services to persons involved in exploration and production of oil and natural gas, filed a writ petition under Articles 226/227 of the Constitution of India, seeking quashing of assessment orders dated 20.03.2020 passed by respondent No.3 under the Maharashtra Value Added Tax Act, 2002 (MVAT Act) as well as under the Central Sales Tax Act, 1956. Petitioner claimed that the impugned orders were barred by limitation and were passed without providing an opportunity of hearing. Respondent No.3 contended that the assessment orders were passed within the prescribed time limit as per the MVAT Act and that petitioner had failed to exhaust the appellate remedy provided under the MVAT Act.

Finding of the Court:

The Court found that the impugned orders of assessment could not have been passed on 20.03.2020 or before 31.03.2020. Those were passed beyond the limitation period of 31.03.2020 and thus are non est in the eye of law. In such a case, question of petitioner not availing the alternative remedy of appeal does not arise. That apart, when it is a question of jurisdiction or lack of jurisdiction, an aggrieved assessee cannot be denied relief under Article 226 of the Constitution of India only on the ground of alternative remedy.

Issues: 1. Whether the impugned orders of assessment were passed within the prescribed time limit as per the MVAT Act? 2. Whether petitioner had failed to exhaust the appellate remedy provided under the MVAT Act?

Ratio Decidendi: 1. The limitation period for passing assessment orders under section 23(2) of the MVAT Act and section 9(2) of the CST Act read with section 23(2) of the MVAT Act for the assessment period 01.04.2015 to 31.03.2016 was four years from the end of the year containing the period to which the return relates. Since the assessment period was 01.04.2015 to 31.03.2016, the four year limitation period would expire on 31.03.2020. Therefore, if the assessment order was required to be passed under section 23(2) of the MVAT Act for the aforesaid assessment period, it had to be passed on or before 31.03.2020. 2. As per rule 87(1) of the MVAT Rules, assessment orders and demand notices can be served by different methods including by hand delivery and by sending a scanned copy or electronically generated and digitally signed copy by email. In the case of personal service (hand delivery), the officer or person serving an assessment order or notice shall require the signature of the person to whom those are delivered as acknowledgment of service which must be endorsed on the original order or notice or on a separate slip. 3. Internal circular No.4A of 2020 dated 20.03.2020 issued by the office of the Commissioner of State Tax, Maharashtra State laid down the procedure for manual issuance of assessment orders. Clause (III) of the circular mandated that assessment orders passed manually should not be served electronically to the dealers as those would have to be delivered to them manually which date will be considered for all legal purposes. Further, there was clear prohibition upon the assessing officer that if an assessment order is passed manually and subsequently entered into the system, printout of the same should not taken out as it would not be considered to be a proper assessment order but just a document created for the purpose of data entry. 4. The impugned orders of assessment could not have been passed on 20.03.2020 or before 31.03.2020. Those were passed beyond the limitation period of 31.03.2020 and thus are non est in the eye of law. In such a case, question of petitioner not availing the alternative remedy of appeal does not arise. That apart, when it is a question of jurisdiction or lack of jurisdiction, an aggrieved assessee cannot be denied relief under Article 226 of the Constitution of India only on the ground of alternative remedy.

Final Decision: The impugned orders of assessment dated 20.03.2020 and the related notices of demand also allegedly dated 20.03.2020 were set aside and quashed.