Assessment orders issued beyond the three-year limit under Section 24(5) of the PVAT Act, 2007 are invalid; powder coating activities constitute a works contract subject to taxation.

ORDER :

Prayer in all TC: These petitions have been filed under Section 51(2) of the PVAT Act, 20076 to revise the order of the Value Added Tax Appellate Tribunal, Principal District Judge, Puducherry dated 16.11.2021 passed in T.A. Nos. 2 to 4 of 2016.

1. Heard the learned counsel for the Petitioner-Commercial Tax Department. There is no re-presentation on behalf of Respondent-Assessee despite service of notice.

2. These Tax Cases are directed against the orders dated 02.03.2016 passed by the Puducherry Value Added Tax Appellate Tribunal, Principal District Judge, Puducherry in T.A. Nos. 2 to 4 of 2016 for the Assessment Years 2007-08 to 2009-10 respectively.

3. Operative portion of the impugned order read as under:

In this case, the date of inspection for assessing the returns of the appellant factory, by the Assessing Authority on the appellant factory was done on 8.2.2013. The assessment year pertains to 2007-2008. The assessment should have been made within three years from the end of the year i.e. 31.3.2008 namely within 31.3.2011 The assessment order had been passed only on 12.12.2014 and therefore, the assessment order itself is non-est in law There is no explanation on the side of the Respondent in this context. It is seen that the assessment order had been passed after the period stipulated in Section 24(5) of PVAT Act, 2007. The proviso does not apply since it is no the case of the Respondent that the input tax credit has been availed wrongly or the dealer had produced false invoice, vouchers, declaration certificate or any other documents with a view to support his claim of input tax credit or refund or the assessing authority had reversed the input tax credit availed by the dealer/appellant and determined tax due as contemplated u/s 24(6) of the PVAT Act, 2007.

10. In such circumstances, this court holds that the Assessment Order dated 12.12.2014 is hit by the provision u/s 24(5) of the PVAT Act, 2007. Therefore the tax due as assessed by the Assessment Officer besides imposing 200% penalty on the tax payable without giving any sufficient reasons is against law and probabilities of the case The Appellate Assistant Commissioner, Puducherry also without going into the merits of the case had blindly upheld to the decision of the Assessing Authority without any justifiable reason. Therefore, I hold that that the Assessment Order dated 12.12.2014 requires interference and to be set aside, on the ground of passing the assessment order after a period of three years from the end of the year to which the return relates, namely 31.3.2008.

11. In the result, the Order passed by the Appellate Assistant Commissioner (CT). Commercial Taxes Department. Puducherry in Proceedings in Appeal No. 52/PVAT/2014-15, dated. 29.6.2015 in Assessment Order of the Commercial Tax Officer (IAC), Puducherry dated. 12. 12.2014 is set aside. No costs.

4. By the impugned Common Order, the Appellate Tribunal has set aside the order dated 29.06.2015 of the Appellate Assistant Commissioner (CT) Commercial Taxes Department, Puducherry. By the said order, the Appellate Assistant Commissioner (CT) Commercial Taxes Department, Puducherry in Appeal Nos. 52 to 54/PVAT/2014-2015/AAC, had affirmed the Assessment Orders passed by the Commercial Tax Officer-IAC for the assessment years 2007-2008 to 2009-2010 respectively.

5. For the sake of convenience, the relevant Assessment Years and their respective Assessment Orders are as follows:

6. These cases were admitted on 07.09.2016. The following substantial questions of law were framed by this Court at the time of admission:

(i) Whether the work of powder coating undertaken by the Assessee amounts to execution of works contract or not?

(ii) Whether the powder coating work involves transfer of property