M/S Deccan Veneers (P) LTD. vs. The Assistant Commissioner (St)

In fact, Division Bench in the case of SJ Constructions (supra) discussed decisions rendered by the High Court of Karnataka, Madras and Kerala to the effect that a single composite assessment year cannot be passed for more than one financial year. It also took into consideration contrary view expressed by the High Court of Delhi. After detailed discussion of said decisions and relevant provisions i.e., Section 2(97), 2(106), 39(1) & (2), Section 44(1), Sections 73 and 74 of the Act, it was concluded as under:- 16. For this purpose, Section 73(3) and (4) are relevant. Under Section 73(3) the notice that has to be issued can be for “any period”. The Hon’ble High Court of Delhi, in the aforesaid judgment, had held that the term “any period” cannot be restricted to a specified period but would mean any length of period. The Hon’ble High Court at Madras had taken the opposite view. The Hon’ble High Court at Madras held that while the term “any period” has been used in Section 73(3), the language in Section 73(4) is “such tax periods”. The Hon’ble High court at Madras then went into the definition of tax period as specified in Section 2(106) to mean that a period for which a return is to be filed. Since return, as defined in Section 2(97) is a return for a month or a year, the Hon’ble High Court at Madras had come to the conclusion that the term “any period” would have to be understood, in the light of the use of the term “such tax periods” in Section 73(4) and consequently “any period” would have to be understood to be a tax period. We would respectfully follow the view taken by the Hon’ble High Court at Madras, in as much as, the effect of Section 73(4) and Section 73(3) had not been brought to the notice of the Hon’ble High Court of Delhi. With all due respect, the interpretation, of the interplay between Section 73(3) and Section 73(4), placed by the Hon’ble High Court at Madras appears to be the correct interpretation.

Section 74(3) is in parimateria with Section 73(3). However, sub- section (4) of Section 74 does not contain the term “such tax period”. This non mention would not, in our opinion, make any difference to the aforesaid interpretation. Apart from this, there are certain other provisions, which would also have to be considered. Any interpretation of an Act should not result in some of the other provisions becoming otiose or reduced in scope. As rightly pointed out by the Hon’ble High Court at Madras, the right of a registered person to obtain benefit under Section 128 of APGST Act as well as the right to invoke the W.P No.8837of 2024 -4-

In the circumstances, we are of the opinion that a single show cause notice or a single composite assessment order cannot be passed in relation to more than one tax period of either a month if the assessment is taken up before the due date for filing of the annual return or for more than one year if the due date for filing of annual return has been reached.

In the present case, composite notice DRC-01 was issued by respondents for the years 2017-18, 2018-19, 2019-20, 2020-21 and 2021-22 and impugned composite order dated 30.12.2023 was passed in respect of years 2017-18, 2018-19 and 2019 to 2020. 6. Learned counsel for respondents, while not denying that the issue is squarely covered in favour of the petitioner, submits that Form DRC-07 has nevertheless been issued separately.

Be that as it may, he is unable to deny that the issue raised is indeed covered in favour of petitioner. Proceedings thus undertaken are clearly unsustainable. Impugned order is thus set aside with liberty to respondents to initiate fresh proceedings for each assessment year separately. Period from the date of passing of impugned order till date of receipt of this order shall stand excluded for the purpose of limitation.

Writ Petition is, disposed of accordingly with no order as to costs. Pending miscellaneous application(s), if any, stand(s) disposed of accordingly.