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2024 Supreme(Online)(KER) 35397
HIGH COURT OF KERALA
A. K. Jayasankaran Nambiar, K. V. Jayakumar, JJ
THE ASSISTANT COMMISSIONER OF STATE TAX – Appellant
Versus
BHIMA JEWELLERY AND DIAMONDS P. LTD. – Respondent
WA 1652/2020
ADV.K.P.ABDUL AZEES
The assessment order under the KVAT Act was not barred by limitation, and the court emphasized the necessity of adhering to natural justice principles in tax assessments.
Headnote:(A) Kerala Value Added Tax Act - Section 25(1) - Writ appeal against assessment order - The respondent challenged the assessment order on grounds of violation of natural justice, asserting that the notice was issued without adequate time to respond - The learned Single Judge erroneously assumed the assessment was barred by limitation based on previous judgments - The court clarified that the assessment year was within the permissible period for reopening assessments under the KVAT Act - The appeal was allowed, and the matter was remanded for a fresh decision on merits. (Paras 2-4, 6-8)
Facts of the case:
The respondent filed a writ petition against an assessment order issued under Section 25(1) of the KVAT Act for the assessment year 2013-2014, claiming violation of natural justice due to insufficient notice period.
Findings of Court:
The court found that the assessment order was not barred by limitation and that the learned Single Judge had misinterpreted the facts, leading to an incorrect ruling.
Issues: The main issue was whether the assessment order was barred by limitation or if it was a case of violation of natural justice.
Ratio Decidendi: The court held that the assessment was within the statutory period and emphasized the need for the Assessing Authority to hear the assessee before making a decision.
Result: The writ appeal was allowed, and the matter was remanded for a fresh decision.
JUDGMENT
Dr. A.K. Jayasankaran Nambiar, J.
This writ appeal has been preferred by the State, aggrieved by the judgment dated 22.09.2020 of a learned Single Judge in W.P(C).No.13815 of 2020.
2. The brief facts necessary for the disposal of this writ appeal are as follows:
The respondent/assessee had filed the writ petition, challenging an assessment order dated 16.03.2020 that was passed against it under Section 25 (1) of the Kerala Value Added Tax Act , (for short, “the KVAT Act”) for the assessment year 2013-2014. The primary contention taken in the writ petition for impugning the assessment order was that it was vitiated on account of a non-compliance with the rules of natural justice. It was the contention of the assessee before the writ court that the notice under (1) of the KVAT Act was issued only on 12.02.2020 and the assessment itself was completed on 16.03.2020 without affording an effective opportunity to the assessee to reply to the notice. In particular, the assessee also pointed out that the reason given by the Assessing Officer in the order dated 16.03.2020 for acting in a hasty manner to complete the assessment was patently wrong. While the Assessing Officer was of the view that he had to complete the assessment by 31.03.2020, according to the assessee, the said assumption was wrong since, as per the law as it stood then, only a pre-assessment notice under (1) of the KVAT Act had to be issued before 31.03.2020 and the assessment pursuant thereto could have been completed beyond 31.03.2020.
3. The learned Single Judge, who considered the writ petition, appears to have assumed that the case projected by the assessee was one of the assessment being barred by limitation. As there were other writ petitions that had been disposed by finding that a notice under Section 25 (1) of the KVAT Act had been issued beyond the period of limitation, based on the judgment of this Court in Baiju A.A. & Others v. State Tax Officer [2020(1) KHC 39] and MCP Enterprises and Others v. State of Kerala & Others [2020 (1) KHC 127], the learned Single Judge allowed the writ petition by finding that the impugned assessment order was barred by limitation.
4. Before us, it is the submission of Smt. Resmitha Ramachandran, the learned Government Pleader for the appellant/State that the learned Single Judge erred in assuming that the case of the writ petitioner was one of the assessment order being barred by limitation. She points out to the specific paragraph in the writ petition, as also to the grounds in the writ petition, which state emphatically that the assessment order would not be barred by limitation as was believed by the Assessing Officer while completing the assessment in haste. It is her contention that the argument of the learned counsel for the writ petitioner was essentially with regard to violation of the rules of natural justice while passing the assessment order, and in that context, the learned Single Judge ought not to have allowed the writ petition by finding the assessment order as having been passed beyond the period of limitation.
5. We have also heard Sri.Abdul Azeez, the learned counsel for the writ petitioner/assessee.
6. On a consideration of the rival submissions, we find force in the submission of the learned Government Pleader, for we find that the assessment year in question is 2013-14 under the KVAT Act. The KVAT Act was amended in 2017, whereby the period of limitation for re-opening the assessment was enhanced from five years to six years. No doubt, in those cases where the erstwhile period of limitation of five years had already expired before the date of the amendment of Section 25 (1) in 2017, the Revenue would not be permitted to re-open assessments that had been settled, through a fresh notice issued thereafter invoking the six-year period of limitation. In the instant case, however, we find that the assessment year in question is 2013-14 and the limitation period for re-opening assessment under (1) of t
