The Commercial Tax Officer (Wc) vs. V.C.Constructions

Facts

The Revenue (Commercial Tax Officer and State of Kerala) appealed a judgment of a learned Single Judge that set aside an assessment order (Ext.P3) passed against M/s.V.C.Constructions. The Single Judge had found the assessment order barred by limitation, based on the contention that the notice for reopening the assessment for the assessment year 2013-14 was issued beyond the prescribed period under Section 25(1) of the Kerala Value Added Tax Act, 2003 (KVAT Act). The Revenue argued that the notice was issued within the six-year period of limitation, which was introduced by a 2017 amendment to Section 25(1) of the KVAT Act. They relied on a previous Division Bench judgment in a similar case.

Held

The Court allowed the writ appeal, setting aside the judgment of the learned Single Judge. The Court found that the assessment year in question was 2013-14, and the limitation period for reopening assessment under Section 25(1) of the KVAT Act was six years, as amended in 2017. The notice issued to the assessee on 23.01.2020 was within this six-year period. The Court noted that the learned Single Judge had erroneously assumed the notice was belated. The Court relied on a previous Division Bench judgment in W.A.No.1753 of 2020, which dealt with a similar situation and held that the six-year period of limitation was applicable for the assessment year 2013-14, and notices issued within this period were valid. The operative direction was to set aside the impugned judgment and dismiss the writ petition. However, the Court granted liberty to the assessee to approach the First Appellate Authority under the KVAT Act by filing a statutory appeal within one month from the date of receipt of a copy of this judgment, which would be treated as filed within time.

Key Issues

1. Whether the notice issued for reopening the assessment for the assessment year 2013-14 under Section 25(1) of the KVAT Act was barred by limitation, considering the amendment to the said section in 2017? Petitioner's Arguments (Revenue): The Revenue contended that the notice for reopening the assessment for the year 2013-14 was issued on 23.01.2020, which was within the six-year period of limitation prescribed under Section 25(1) of the KVAT Act, as amended in 2017. They relied on a Division Bench judgment in W.A.No.1753 of 2020, which held that for the assessment year 2013-14, the six-year period of limitation was applicable and the notice issued on 06.02.2020 was within time. Respondent's Arguments (Assessee): The respondent (writ petitioner) argued before the Single Judge that the assessment order was barred by limitation as the notice was issued beyond the period prescribed under Section 25(1) of the KVAT Act. The judgment does not record specific arguments from the assessee before the Division Bench, but their initial contention before the Single Judge was that the notice was belated.