COMMERCIAL TAX OFFICER Vs. FIJO JOSEPH

JUDGEMENT

(1.) The issue raised in the above writ appeals is with respect to the limitation under Section 6(5) of the Central Sales Tax Rules, 1957 [for brevity, the Rules]. Before we proceed with the matter, we have to notice the change brought about on introduction of the Kerala Value Added Tax Act, 2003 [for brevity, the KVAT Act]. Prior to the KVAT Act, the Kerala General Sales Tax Act, 1963 [for brevity, the KGST Act] provided for an assessment under Section 17 and much later to the enactment, provided a period of limitation for completion of assessment, which was four years. Under the KGST Act, there was only one return to be filed both under the KGST Act and the Central Sales Tax Act, 1956 [for brevity, the CST Act]. The Assessing Officer under the KGST Act would complete the assessments both under the KGST Act and CST Act by separate orders.

(2.) After the introduction of the KVAT Act, there is a deemed completion of assessment under Section 21, if the return is filed in the prescribed manner accompanied with the prescribed documents. Assessment of escaped turnover could be made either under Section 24 or under Section 25 of the KVAT Act, the latter of which provided a limitation period of five years for issuance of notice of assessment, more specifically "to proceed to determine...". Section 24 provided completion of such assessment within three years from the date of order to which the return relates. However, the practice of an assessment being proceeded with and completed by a specific order continued under the CST Act as per the prescription available in the Central Sales Tax(Kerala) Rules, (CST Rules, hereafter) ie: Rule 6(5). There is no limitation provided for such completion of assessment, under Rule 6(5); which the State seeks benefit of in these writ appeals. The learned Single Judge, by the impugned judgment allowed the writ petitions of the assessees setting aside the notices issued and the orders passed under the CST Act on the ground of it having not been completed within a reasonable time; which reasonable time was held to be four years.

(3.) In the writ petitions, the challenge was against the issuance of notice and completion of assessments beyond the four year period as provided under sub-rule (7) & (8) of Rule 6 of the CST Rules. The contention of the assessee before the learned Single Judge was that sub-rule (5) having not provided for any period of limitation, it cannot be said that the power to complete assessment could extend endlessly. It was submitted that even if there is no specific period of limitation provided, there should be a reasonable period contemplated; looking at the nature of the statute, rights and liabilities there under and other relevant factors, as has been held in State of Punjab v. Bhattinda District Co-operative Milk Producers India Ltd., 2007 11 SCC 363. The learned Single Judge accepted the said proposition and found so in paragraph 15 of the impugned judgment: