CHOLAYIL PVT LTD Vs. ASSISTANT COMMISSIONER (ASSESSMENT)

JUDGEMENT

(1.) The issue raised in the Writ Appeal is no longer res integra and is covered in favour of the appellant/petitioner by the order of the Full Bench, which answered the reference by a Division Bench in the above Writ Appeal.

(2.) The brief facts to be stated are that notices under Section 25(1) of the Kerala Value Added Tax Act, 2003 ('KVAT Act', for short) was issued on 21.1.2013 and 21.2013, respectively Exts.P1 and P2, for the assessment years 2005-06 and 2006-07. The Act, in a departure, from the earlier regime under the Kerala General Sales Tax Act, 1963 ('KGST Act', for short) provided for completion of assessment on the filing of return by the assessee. Section 25 of the KVAT Act provided for assessment of escaped turnover, under which at the instances of escapement as enumerated there under, the assessing authority may "proceed to determine, to the best of its judgment, the turnover which has escaped assessment to tax or has been underassessed or has been assessed at a rate lower than the rate at which it is assessable or the deduction in respect of which has been wrongly made or input tax credit that has been wrongly availed of and assess the tax payable on such turnover or disallow the input tax credit wrongly availed of, after issuing a notice on the dealer and after making such enquiry as it may consider necessary". However, this had to be done within five years from the close of the assessment year.

(3.) In the present appeal, the assessment years were 2005-06 and 2006-07, the close of which occur on 31.2006 and 31.2007. The issue before the learned Single Judge was whether notices could be issued after the five year period as stipulated in Section 25 of the KVAT Act. The learned Single Judge refused to exercise discretion under Article 226 of the Constitution of India and relegated the party to the appellate remedy. The petitioner/assessee was in appeal.