Assessments beyond the limitation period prescribed in the Kerala General Sales Tax Act are unsustainable.

JUDGMENT

[WP(C) Nos.7697/2019, 14467/2019, 23419/2020 and 32662/2019]

The petitioners in these writ petitions seek to challenge the various assessment orders passed against them under the provisions of the Kerala General Sales Tax Act , 1963 (for short, the “Act”), on the ground of limitation, entitlement for credit with reference to various amounts paid by the respective petitioners to the civil courts against Garnishee orders issued by the courts as well as the denial of concessional rate of tax on sales made by them to NTPC and such other institutions.

2. I have heard Sri.Parvathi S., the learned counsel for the petitioners, as well as Sri.Alen Priayadarshi Dev, the learned Government Pleader for the respondents.

3. Both sides admit that if the issue of limitation is decided and if it is ultimately in favour of the assessee, there is no requirement for considering the other two issues noticed earlier.

4. Therefore, the first point to be considered is as to whether assessments impugned in these cases are barred by limitation. The facts and circumstances as borne out of W.P(C) No.7697 of 2019 are noticed in a representative capacity. The afore writ petition has been instituted essentially challenging the assessments under the Act with reference to the assessment year 2007-08. Ext.P3 is the assessment order issued, dated 28.01.2019, under the provisions of the Act. The pre-assessment notice under Section 17(3) of the Act, on the basis of which the assessment has been completed, was issued on 25.08.2017. Therefore, the question to be considered is as to whether the assessment in the case at hand is barred by limitation on their basis.

5. The provisions of Section 17(3) of the Act, as it originally stood, did not provide for any period of limitation, either for initiation of assessments, or for finalisation. The limitation for the first time was introduced by the Finance Act, 1993, through the insertion of sub-section (6) with effect from 01.04.1993, originally providing for a four-year period and later a five-year period with effect from 31.03.2002. Therefore, applying the afore period of four years/five years, there is no dispute that the assessment for the year 2007-08 cannot be sustained, since the pre-assessment notice was issued only on 25.08.2017.

6. Though Sri.Alan would seek to rely on the provisions of Section 17(6) of the Act, as has been amended by the Finance Acts, 2009 and 2010, this Court notices that the afore contention has been specifically considered by a Division Bench of this Court in State of Kerala v. Renjitha Sathyan [2025 KHC OnLine 1027] holding that the afore amendments cannot save the limitation in the cases like the one noticed herein. Though Sri.Alan would contend that the assessments were pending with reference to the Finance Acts, 2009 and 2010, and assuming that it is so, it goes without saying that the assessments ought to have been completed within the period prescribed by the provisions as amended by the Finance Acts, within the period of 31.03.2010 or 31.03.2011. In the case at hand, as noticed above, the pre-assessment notice was issued only on 25.08.2017, on the basis of which the assessment was completed on 28.01.2019. Therefore, I am of the opinion that the learned Government Pleader may not be justified in placing reliance on the amendments carried out by the Finance Acts, 2009 and 2010.

7. Though Sri.Alan would further contend that with reference to W.P(C) No.23419 of 2010, insofar as the assessment therein is for the assessment year 2001-02, the initiation of the assessment steps on 26.09.2009 and the subsequent completion of the assessment were within the period of limitation, I am of the opinion that with reference to the assessment year 2001-02, the period of five years has come to an end by 31.03.200