M/S. Sri Rukmani Agencies, v. The Commercial Tax Officer,
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated :: 23.01.2019
CORAM:
THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM W.P. No.36753 of 2006 M/S. SRI RUKMANI AGENCIES REP. BY ITS PROP. G. MOHANDAS 103-C ARUNACHALA ASARI ST. SALEM -1.
...petitioner Vs 1 THE COMMERCIAL TAX OFFICER SALEM TOWN SOUTH CIRCLE SALEM.
2 THE SPECIAL COMMR. AND COMMR. OF COMMERCIAL TAXES EZHILAGAM CHEPAUK CHENNAI -5.
...
respondents Writ Petition filed under Art.226 of the Constitution of India praying for a Writ of Certiorari calling for the records of the 1st respondent in his notice in TNGST 2680179/2000-01 dt. 31.3.2006 and quash the same as illegal.
For petitioner ...
Mr.S.Ramanathan For respondents ...
Mr.M.Hariharan, AGP (Taxes)
O R D E R
The notice issued by the first respondent in proceedings dated 31.3.2006 is sought to be quashed in the present Writ Petition.
2. The grievance of the Writ Petitioner is that the impugned notice issued by the first respondent is barred by limitation. The assessment order relates to the year 2000-01 and the five years limit prescribed under the statute expired on 31.3.2006. Though the notice impugned is dated 31.3.2006, it was served on the petitioner only on 19.6.2006, after a lapse of five years. Thus, the impugned notice is barred by limitation. In respect of the grounds raised in the present Writ Petition, this Court has considered similar issue in the case of Soverign Houseware Impex vs. Commercial Tax Officer, Manali Assessment Circle, Chennai, (2017 (104) VST 304 (Mad)). The order is extracted hereunder :- The challenge in this writ petition is to a pre-revision notice dated 21.5.2004 issued by the respondent herein on the ground that as per Section 16(1)(a) of the
Tamil Nadu General Sales Tax Act, 1959, a re-assessment has to be effected within five years.
2. Section 16(1)(a) of the said Act reads as under :
"Where, for any reason, the whole or any part of the turnover of business of a dealer has escaped assessment to tax, the Assessing Authority may, subject to the provisions of Sub-Section (2), at any time, within a period of five years from the expiry of the year, to which, the tax relates, determine to the best of its judgment the turnover, which has escaped assessment and assess the tax payable on such turnover after making such enquiry as it may consider necessary and after giving the dealer a reasonable opportunity to show cause against such assessment."
3. In this writ petition, the assessment in question is of the year 1998-99. The last date for issuing such a pre-revision notice was 31.3.2004, since the assessment was relating to the period 1998-99. Admittedly, the pre-revision notice was issued by the respondent vide proceedings dated 21.5.2004, after the expiry of five years of period prescribed under the said Act.
4. In support of the above proposition, the learned counsel for the petitioner cited the judgment of the Honourable Division Bench of this Court rendered in the case of Universal Abrasives Vs. CTO [reported in 2014 (68) VST 386] wherein speaking for the Bench, R.Banumathi,J (as she then was), considered the very same provisions and laid down the principles as under :
"By reading of the provision, it is clear that the limitation period commences from the date of final assessment order. The said provision came into effect prospectively and not retrospectively. There is nothing in the amended provision Section 16(1)(a) that the same was intended to operate retrospectively. Therefore, the respondent cannot resort to the amended provision Section 16(1)(a) to sustain the impugned revised proceedings of assessment.
As pointed out by the learned counsel for the appellant, the original order of
assessment for the year 1997-98 was issued in proceedings CST. 50386/97-98 dated March 11, 2000. Even though the assessment order dated March 11, 2000 has not been filed in the typed set of papers, in the revised proceedings dated July 2, 2002, the said proceedings dated March 11, 2000 has been shown as Ref.No.1. Hence, the said assessment order dated March 11, 2000 is the original assessment order. The proceedings dated July 2, 2002 is only a revised proceedings of the Commercial Tax Officer considering the representation of the petitioner regarding the disallowance of the exemption on export sales and disallowance of claim of assessment at 4% against the C Forms.
As rightly contended by the learned counsel for the appellant, the proceedings dated July 2, 2002 is only a revised proceedings and not a original order of assessment, since the original order of assessment for the assessment year 1997-98 is dated March 11, 2000. As per the unamended provision of Section 16(1)(a) of the CST Act, any revision of assessment of the escaped turnover ought to have been made within a period of five years from the expiry of the year to which tax relates. Since the assessment year is 1997-98, in the case on hand, any revision of proceedings ought to have been issued on or before March 30, 2003. But, the impugned revision notice was issued on April 5, 2004 and the impugned revised order for the year 1997-98 was issued on August 23, 2004, which is beyond the period of five years stipulated in Section 16(1)."
5. The very same Honourable Division Bench considered the same principle in the case of P.R.G.Kamaraj Vs.
DCTO, Thiruthuraipoondi Assessment Circle [reported in 2014 (74) VST 368], in which, the relevant portion reads as follows :
"In the case on hand, since the assessment order was passed on December 28, 2001, much prior to the amended provision came into effect i.e. July 1, 2002, the limitation of five years cannot be calculated from the date of the final order of assessment based on the amended provision
Section 16(1)(a). The assessment year in question is 1999-2000. Hence, the five year limitation ends by March 31, 2005 and the pre-revision notice issued beyond the period of five years is barred by limitation."
6. The learned Additional Government Pleader appearing for the respondent has not disputed the provisions as well as the principles laid down by the Honourable Division Bench of this Court and accordingly, the principles laid down by the Honourable Division Bench of this Court squarely apply to the case on hand, since the facts are almost similar. Therefore, the writ petition deserves to be allowed.
7. In the result, the writ petition is allowed and the impugned order dated 21.5.2014 is quashed.
No costs.
Consequently, the above WPMP is closed.
3. In view of the legal principles settled in the case cited supra, the facts and circumstances of the present case reveal that the impugned notice was served on the petitioner belatedly, more specifically after a lapse of five years and this being the factum of the case, the impugned notice issued by the first respondent is liable to be quashed. Accordingly, the impugned notice dated 31.3.2006 is quashed.
4. The Writ Petition stands allowed. No costs. Consequently, M.P.No.1 of 2006 is closed.
Sd/- Assistant Registrar(CS VI) //True Copy// Sub Assistant Registrar tar To 1 THE COMMERCIAL TAX OFFICER SALEM TOWN SOUTH CIRCLE SALEM.
2 THE SPECIAL COMMR. AND COMMR. OF COMMERCIAL TAXES EZHILAGAM CHEPAUK CHENNAI -5.
+1cc to Mr.S.Ramanathan, Advocate, S.R.No.5768 +1cc to the Spl Government Pleader, S.R.No.5664 W.P. No.36753 of 2006 CP(CO) GSP(21/02/2019)