The Kerala High Court has held that limitation under Section 17(D) of the Kerala General Sales Tax Act is not applicable to the notice of pre-assessment issued against the petitioner under the instructions of the High Court, in a major setback to Hindustan Coca Cola Beverages Private Limited.
The present writ petition was filed impugning Ext.P8 notice dated 12.01.2022 issued by the Deputy Commissioner of the State Tax, State GST Department, Kerala, Special Circle Palakkad, proposing taxable turnover at Rs.15.92 Crores for the purposes of GST.
The assessment order was completed in respect of the financial year 2004-05 under Section 17(D) of the Kerala General Sales Tax Act, 1963 (KGST Act).
The said assessment order passed under Section 17(D) of the KGST Act came to be challenged by the petitioner. A Single Judge of Kerala High Court allowed the writ petition and remanded the matter back to the assessing authority for a fresh order.
The original assessment order was set aside and the matter was remanded back. Vide order, a fast track team was constituted to complete the assessment in respect of the petitioner for the financial year 2004-05 under Section 17(D) of the Kerala General Sales Tax Act, 1963.
After the fast track team was constituted, the Deputy Commissioner was directed to take steps for re-doing the assessment under Section 17(D) of the KGST Act, in respect of the same.
Ext.P4 notice dated 02.12.2021 came to be issued to the petitioner to examine the accounts, documents and registers for the year 2004-05 and the petitioner was directed to produce those documents on 16.12.2021.
The petitioner filed a reply to the said notice dated 16.12.2021. The petitioner took a plea in his reply that in the financial year 2004-05, the original assessment order was set aside by the High Court vide judgment dated 14.12.2009 passed in WP(C) No. 35601/2009.
By the said judgment, a time frame of two months was granted for redoing the assessment. Almost 12 years had elapsed since the order passed by the High Court and therefore, the petitioner was not in possession of the records as sought for and they were unable to make available the records as per the notice dated 02.12.2021.
It was also said that calling for the records after the statutory period of assessment was not in accordance with law and a request was made to drop the proceedings for redoing the assessment. The said reply was considered and fresh notice dated 20.12.2021 was issued to the petitioner in notice. It was said that since the original assessment was already completed, which was set aside by the High Court and the matter was remanded back therefore, the time bar limit for completing the assessment was not available and there was no scope for jurisdictional objection.
The petitioner was again asked to produce documents failing which the assessment will be completed on available documents. The petitioner was given an opportunity of being heard.
On receipt of the said notice the petitioner again raised the same objection. It was said that no notice could have been issued after the period of assessment.
Notably, The time period under Section 25 should apply for a revised assessment. It was further said that the High Court had issued a direction for completion of assessment proceedings within a period of two months.
A Kumar, counsel for the petitioner submitted that it was the High Court that fixed the time limit
for finalizing or redoing the assessment, issuing notice after 12 years from the date of the order is against the time prescribed under Section 17D of KGST Act. It is further submitted that though it was not the original assessment, the revised assessment ought to have been completed within 5 years from the end of the financial year or at least from the date of the judgment passed by the High Court.
Reshmitha Ramachandran, Government Pleader however submits that the limitation prescribed for completion of original assessment or revised assessment would not be applicable in the facts of the present case inasmuch as the high Court had set aside the original assessment and remanded the matter back to the assessment authority to redo the assessment.
Therefore, the limitation prescribed for passing the original assessment or the revised assessment could not be applicable, she contended.
The assessment being neither original nor revised, but as per the direction of the High Court, it was observed that, “the limitation prescribed for passing the assessment/revised assessment would not be applicable to the facts of the present case.”
“The final order yet to be passed in pursuance to the proposed assessment in Ext.P8. This Court had directed the petitioner to file reply to Ext.P8 proposed assessment order and the petitioner has not filed the reply”, the bench noted.
It was thus held that, “the proposed assessment is neither the original assessment nor the revised assessment and the limitation prescribed for assessment and revised assessment would not be applicable to the facts of the case.”
Further, it was held that the question whether on remand also the limitation period prescribed for revised assessment would be applicable does not call for consideration in the facts of the present case inasmuch as it is not known that when the petitioner had supplied the copy of the judgment passed by the high Court before the assessing authority.
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