Mukesh Kumar Singh vs. The State Of Bihar

Held

The Court held that the reassessment order and demand notice were liable to be set aside. It found that the 36-month period for conducting the audit, as stipulated under Section 26(3) of the Bihar Value Added Tax Act, 2005, is to be calculated from the due date for filing the return, which for the year 2015-16 was December 31, 2016. Therefore, the audit and subsequent proceedings should have been completed by December 31, 2019. The order passed on March 31, 2021, was thus beyond the statutory time limit, rendering the respondents without jurisdiction. The Court also noted that while the respondents claimed the notice was served via registered post, the petitioner asserted it was not properly served. Citing the Supreme Court's decision in Tamil Nadu Cements Corporation Limited, the Court held that a writ petition can be entertained when the order or proceedings are wholly without jurisdiction, even if a statutory remedy exists. Consequently, the impugned order and demand notice were quashed. The petitioner was granted liberty to approach the concerned authority for consequential benefits, which the authority was directed to redress within three months.

Facts

The petitioner, Mukesh Kumar Singh, filed a writ petition challenging an ex-parte reassessment order and demand notice dated March 31, 2021, and a notice dated February 10, 2022. These were passed under Section 31 of the Bihar Value Added Tax Act, 2005, following an audit report for the financial year 2015-16. The petitioner contended that the proceedings were time-barred and initiated without his knowledge. The audit was conducted on December 16, 2019, and a notice for appearance was issued on December 26, 2020, for January 13, 2021. The petitioner claimed this notice was not properly served. The respondents argued that the notice was sent via registered post and that the time limit for audit should be calculated from the date of the audit, not the due date for filing returns.

Key Issues

1. Whether the reassessment order and demand notice dated March 31, 2021, passed under Section 31 of the Bihar Value Added Tax Act, 2005, are liable to be quashed on the grounds of being passed beyond the time limit stipulated under Section 26(3) read with Section 24(3) of the Act, 2005? Petitioner's arguments: The petitioner argued that the proceedings were time-barred as the order was passed on March 31, 2021, which is beyond 36 months from the due date of the return for 2015-16 (December 31, 2016). They asserted that the respondents lacked jurisdiction to pass the order after December 31, 2019. The petitioner also contended that the notice dated December 26, 2020, was not served in accordance with law, and the audit report and subsequent order were passed without his knowledge. Respondents' arguments: The respondents contended that the 36-month period should be calculated from the date of the audit (December 16, 2019), not the due date of the return. They also argued that the notice was served via registered post and that the petitioner had an alternative statutory remedy of appeal.