Samko Techno Solutions PVT. LTD vs. The State Tax Officer

Facts

The petitioner, Samko Techno Solutions Pvt. Ltd., filed a writ petition challenging an order (Ext.P1) passed by the 1st respondent, the State Tax Officer, under Section 25(1) of the Kerala Value Added Tax (KVAT) Act for the assessment year 2008-09, dated March 13, 2020. The petitioner contended that the assessment order was passed beyond the prescribed limitation period. Specifically, they argued that under Section 25(1) of the KVAT Act, assessment should be processed within five years from the last date of the year to which the return relates. They also noted an amendment to the statute by the Kerala Finance Act, extending this period to six years. Furthermore, the petitioner claimed that Ext.P1 notice was not properly served. The revenue did not dispute the date of issuance of the notice.

Held

The Court held that Ext.P1 order is not sustainable under law. The reasoning was based on the interpretation of Section 25(1) of the KVAT Act, as previously interpreted by this Court in the cited judgments. The Court found that the assessment proceedings, as initiated by Ext.P1, were beyond the period of limitation. The petitioner's contention regarding the limitation period was accepted, and the revenue's argument that the amendment was prospective was implicitly rejected in light of the prior judgments. The Court noted that the Government Pleader did not dispute the date of issuance of the notice, which was crucial for determining the limitation period. Consequently, the Court set aside Ext.P1. The ratio decidendi is that assessment proceedings initiated beyond the statutory period of limitation, as interpreted by the High Court, are invalid. The operative direction was to set aside the impugned order.

Key Issues

1. Whether the assessment order, Ext.P1, passed by the State Tax Officer under Section 25(1) of the KVAT Act for the assessment year 2008-09, is barred by limitation, considering the statutory period of five years from the last date of the relevant year to which the return relates, and the subsequent amendment extending it to six years. Petitioner's Arguments: - The assessment order was passed beyond the five-year limitation period prescribed under Section 25(1) of the KVAT Act. - The amendment extending the period to six years, brought in by the Kerala Finance Act, is applicable. - The notice (Ext.P1) was not properly served. - Reliance was placed on this Court's judgments in Baiju AA & Others vs. State Tax Officer [2020 (1) KHC 39] and MCP Enterprises & Others vs. State of Kerala & Others [2020 (1) KHC 127] regarding the period of limitation. Revenue's Arguments: - The Government Pleader did not dispute the date of issuance of the notice. - Section 25(1) of the KVAT Act empowers authorities to initiate assessment proceedings for escaped turnover within five years, and the 2017 amendment was held to be prospective.