The Orissa High Court while quashing the assessment order held that the Sales Tax Commissioner should exercise power to extend the period before the expiry of the original limitation period.
The petitioner, M/s. Cobra Instalaciones Y Servicios challenged the assessment order on the grounds that it has been passed beyond the period of limitation i.e. after the lapse of more than six months to the date of completion of the Audit Visit Report (AVR) on 20th June 2012.
Mr. Mohanty, Senior Counsel for the Petitioner submitted that realizing that the limitation was going to an end on 31st March 2013, the Assessing Authority on 25th March 2013 i.e. six days prior thereto, requested the Commissioner of Sales Tax (CST) to invoke the power conferred on him in terms of proviso to sub-Section (6) of Section 42 of the OVAT Act. Thereafter the CST passed an order on 20th July 2013 extending the time for passing the assessment order by a period of six months.
The issue raised in this case was whether an ex post facto extension of limitation could have been granted by the CST in terms of the proviso to Section 42 (6) of the OVAT Act to validate the impugned assessment order dated 15th May 2013 for all the above years.
The division bench is headed by Chief Justice Dr. S. Muralidhar and Justice B.P. Routray held that it was important for the Commissioner to have exercised the power to extend the period before the original period of limitation expired i.e. before 31st March 2013 of limitation.
“The Court is unable to sustain the validity of the impugned assessment order dated 15th May 2013, which, on the date it was passed, was in violation of Section 42(6) of the OVAT Act. The Court further holds that the order dated 20th July 2013 passed by the CST in terms of the proviso to Section 42 (6) of the OVAT Act cannot validate such an illegal assessment order, which, on the date it was passed, was clearly time-barred,” the Bench said.
The court directed the petitioner to deposit the amount deposited pursuant to the interim order dated 27th August 2013 will be refunded to the Petitioner upon an application being made by the Petitioner, on the basis of this order. If such application is made not later than 1st September 2021, it shall be processed and an appropriate order be passed thereon by the Department in a time-bound manner, in any event not later than three months thereafter.
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