M/S Sree Raja Rajeshwari Agencies vs. Commercial Tax Officer

Held

The Court allowed the writ petition and set aside the impugned Assessment Order A.O.No.50813 dated March 31, 2020, passed by the 1st respondent under the TSVAT Act, 2005, for the period April 2013 to March 2014. The Court found that the petitioner was disabled from filing their books of accounts and documents due to the COVID-19 lockdown, which commenced on March 21, 2020, and continued for an extended period. This situation prevented the petitioner from responding to the show-cause notice within the given timeframe and also raised questions regarding the limitation period. The Court acknowledged that the respondents did not dispute the impact of the lockdown. Consequently, the matter was remitted back to the 1st respondent for fresh consideration. The petitioner was granted six weeks from the date of receiving the order to produce their books of accounts and documents and to file written objections, including regarding the plea of limitation. The 1st respondent was directed to afford a personal hearing and pass a reasoned order in accordance with the law.

Facts

The petitioner, M/s Sree Raja Rajeshwari Agencies, challenged an ex-parte assessment order dated March 31, 2020, passed by the Commercial Tax Officer (1st respondent) for the tax period April 2013 to February 2014 under the TSVAT Act, 2005. The petitioner argued that the assessment order was barred by limitation, as the six-year period expired on March 20, 2020. Furthermore, a show-cause notice dated March 11, 2020, was sent by registered post, received on March 16, 2020, giving seven days to respond, which expired on March 23, 2020. However, a nationwide lockdown due to the COVID-19 pandemic was declared on March 21, 2020, preventing the petitioner from submitting their books of accounts and documents. The assessment order was passed on March 31, 2020, during this lockdown period. The petitioner also contended that the order was passed without affording reasonable hearings and was contrary to principles of natural justice, equity, and fair play, particularly in denying input tax credit against VAT purchases.

Key Issues

1. Whether the final ex-parte assessment order dated March 31, 2020, passed by the 1st respondent for the tax period April 2013 to February 2014 is barred by limitation, as the period of six years expired on March 20, 2020, under the relevant provisions of the TSVAT Act, 2005? 2. Whether the assessment order, passed after a show-cause notice issued on March 11, 2020, giving a response period expiring on March 23, 2020, was in violation of the principles of natural justice, equity, and fair play, given the nationwide COVID-19 lockdown declared on March 21, 2020, which prevented the petitioner from submitting their response and documents? Petitioner's arguments: The petitioner argued that the assessment order was barred by limitation as it was passed beyond the six-year period. They also contended that the lockdown due to COVID-19 pandemic rendered it impossible to comply with the show-cause notice within the stipulated time, thus violating principles of natural justice. They relied on the fact that the lockdown commenced before the expiry of the response period and continued thereafter. Respondents' arguments: The Special Counsel for Commercial Taxes did not dispute the fact of the COVID-19 lockdown and its impact on the petitioner's ability to submit documents.