W.p (C) v. Income Tax Officer & Another [(1961) 41 Itr 191] Are Citedat The Bar To Contend That Even Notices Of Assessment Could Bequashed

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE V.CHITAMBARESH MONDAY, THE 10TH DAY OF JUNE 2013/20TH JYAISHTA 1935 WP(C).No. 4832 of 2010 (D) --------------------------- PETITIONER(S): ---------------- PARISONS FOODS (P) LTD., REGISTERED OFFICE - CHEROOTTY ROAD, KOZHIKODE-673032 REP.BY ITS MANAGING DIRECTOR, N.K.MOHAMMED ALI. REGISTERED OFFICE - CHEROOTTY ROAD, KOZHIKODE-673032 BY ADVS.SRI.E.K.NANDAKUMAR SRI.A.K.JAYASANKAR NAMBIAR SRI.K.JOHN MATHAI SRI.P.BENNY THOMAS SRI.P.GOPINATH RESPONDENT(S): ------------------- 1. STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT THIRUVANANTHAPURAM. THIRUVANANTHAPURAM. 2. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, SPECIAL CIRCLE-I, KOZHIKODE. R, BY ADV. GOVERNMENT PLEADER SRI.MANOJ P.KUNJACHAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 10-06-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX IN W.P.(C) No.4832 OF 2010 PETITIONER(S) EXHIBITS EXHIBIT P1:TRUE COPY OF THE PRE-ASSESSMENT NOTICE ISSUED BY THESECOND RESPONDENT DATED 30.5.2009SECOND RESPONDENT DATED 30.5.2009 EXHIBIT P2:TRUE COPY OF THE REPLY GIVEN BY THE PETITIONER TOEXT.P1 NOTICE DATED 15.6.2009EXT.P1 NOTICE DATED 15.6.2009 EXHIBIT P3:TRUE COPY OF THE PRE-ASSESSMENT NOTICE DATED21.12.2009.21.12.2009. EXHIBIT P4:TRUE COPY OF THE REVISED PRE-ASSESSMENT NOTICE DATED22.1.2010. 22.1.2010. RESPONDENT(S) EXHIBITS NIL. //TRUE COPY// P.S. TO JUDGE. V.CHITAMBARESH, J. ------------------------------- W.P (C) No.4832 of 2010 ------------------------------- Dated this the 10[th] day of June, 2013 J U D G M E N T Can an assessment under the Central Sales TaxAct, 1956 ('the CST Act' for short) be completed belatedly byavailing the time extended for the relevant year under theKerala General Sales Tax Act, 1963 ('the KGST Act' forshort) ? 2. The petitioner filed return for the year 2003-04under the CST Act conceding a total inter-state sales turnoverof `.77,77,79,446/- and claimed exemption for the turnover of`.77,08,88,957/- being consignment sales. The secondrespondent did issue Ext.P1 notice dated 30.5.2009 underRule 6(5) of the Central Sales Tax (Kerala) Rules, 1957 ('theRules' for short) in order to complete the assessment. Theassessment could not however be completed since there was achange in the fast track team constituted under Section 17 Dof the KGST Act in the meanwhile. P3 notice dated 21.2.2009was thereafter issued after verification of the books ofaccounts followed by Ext.P4 revised notice dated 22.1.2010 bythe second respondent under Rule 6(5) of the Rules. Exts.P1, P3 and P4 pre-assessment notices are impugned on the soleground that they have been issued well beyond four years of theassessment year 2003-04 (which ends on 31.3.2004). It is fairlyconceded that no period has been prescribed for completing theassessment under the Rules even though a period of four yearshas been prescribed for revised assessment under Rules 6(7) and6(8) of the Rules. But the petitioner maintains that a period offour years should be read into Rule 6(5) of the Rules also whichdeals with the completion of assessment under the Act. A seriesof decisions starting from Culcutta Discount Company Ltd. v. Income Tax Officer & another [(1961) 41 ITR 191] are citedat the Bar to contend that even notices of assessment could bequashed. 3. The respondents rely on Section 9(2) of the Actand contend that the authorities constituted under the KGST Actto make assessment are vested with the power to assess taxunder the CST Act as well. Such authorities for that purpose canexercise all or any of the powers they have under the generalsales tax law of the State and of course subject to the other Income Tax Officer & another [(1961) 41 ITR 191] are citedat the Bar to contend that even notices of assessment could bequashed. 3. The respondents rely on Section 9(2) of the Actand contend that the authorities constituted under the KGST Actto make assessment are vested with the power to assess taxunder the CST Act as well. Such authorities for that purpose canexercise all or any of the powers they have under the generalsales tax law of the State and of course subject to the other provisions of the CST Act and the Rules made thereunder. Therespondents assert that no time limit has been prescribed forcompleting the assessment under the CST Act or Rule 6(5) of theRules and can hence bank on Section 17 of the KGST Act. It ispointed out that Section 17 of the KGST Act as amended by theFinance Act, 2009 permits completion of assessment relating tothe years upto and including the year 2004-05 pending as on31.3.2009 on or before 31.3.2010. The respondents add that thewrit petition filed challenging the pre-assessment notices aremisconceived since the petitioner can very well file objectionsthereto and invoke statutory remedy thereafter if needed. 4. I heard Mr.Jayasankar.A.K., Senior Advocate on behalf of the petitioner and Mr.Manoj P.Kunjachan, GovernmentPleader on behalf of the respondents. 5. A cursory look at Section 9(2) of the CST Act throws an insight to the issue raised and the same is extractedbelow for reference:- 9. Levy and collection of tax andpenalties:- (1)xxxxxx (2)Subject to the other provisions of thisAct and the rules made thereunder the authoritiesfor the time being empowered to assess, re-assess,collect and enforce payment of any tax under thegeneral sales tax law of the appropriate State shall,-on behalf of the Government of India, assess, reassess, collect and enforce payment of tax, includingany interest or penalty, payable by a dealer underthis Act as if the tax or interest or penalty payableby such a dealer under this Act is a tax or interest orpenalty payable under the general sales tax law ofthe State; and for this purpose they may exercise allor any or the powers they have under the generalsales tax law of the State;and the provisions of suchlaw, including provisions relation to returns,provisional assessment advance payment of tax,registration of the transferee of any business,imposition of the tax liability of a person carrying onbusiness on the transferee of, or successor to suchbusiness, transfer of liability of any firm or Hinduundivided family to pay tax in the event of thedissolution of such firm or partition of such family,recovery of tax from third parties, appeals, reviews,revisions, references, refunds, rebates, interest ofpenalty charging or payment of interestcompounding of offences and treatment ofdocuments furnished by a dealer as confidential, shall apply accordingly: (emphasis supplied) There is obviously no embargo for the authorities to exercise allor any of the powers they have under the KGST Act subject tothe provisions of the CST Act and the Rules made thereunder inregard to completion of assessment. No period has beenprescribed for completing the assessment under Rule 6(5) of theRules while a period of four years is specifically prescribed forre-assessment under Rules 6(7) and 6(8) of the Rules. Thefailure to prescribe any period for completing the assessmentunder Rule 6(5) of the Rules is conspicuous enabling theauthorities to fall back on Section 17 of the KGST Act. Section17 of the KGST Act as amended by the Finance Act, 2009 hasextended the time for completing the assessment in question forthe period upto 31.3.2010. It cannot therefore be said thatExts.P1, P3 and P4 notices dated 30.5.2009, 21.12.2009 and22.1.2010 are on the face of it barred by limitation and henceliable to be quashed in this writ jurisdiction. 6. I may also incidentally refer to a Bench decision ofthe High Court of Andhra Pradesh in Andhra Sales Tax 6. I may also incidentally refer to a Bench decision ofthe High Court of Andhra Pradesh in Andhra Sales Tax Practitioners' & Consultants Association and Others v.Commissioner of Commercial Taxes and Another [(2002) 127 STC 177] wherein it is held as follows:- 19. ....... By force of sub-section (2) of section 9of the CST Act, the procedure provided under thegeneral sales tax law of the State for the purposesincluding the purpose relating to returns andprovisional assessment is made applicable to theproceedings arising out of the CST Act also.Therefore, merely because new procedure and formsprescribed under the impugned sub-rule (5-A) applyto the proceedings under the CST Act also, it cannotbe said that the impugned sub-rule isunconstitutional. Sub-section (2) of section 9 of theCST Act thus enables the sales tax authorities underthe APGST Act to invoke the provisions of the Actand the rules framed thereunder for the purpose ofcompleting the proceedings under the CST Act.”(emphasis supplied) A similar view is taken by the division bench of the same High Court in Nav Swadeshi Oil Mills v. State of Andhra Pradesh[(1983) 54 STC 149]. 7. Heavy reliance is placed by the petitioner on State of Punjab and Others v. Bhatinda District Co-operativeMilk Producers' Union Ltd. [(2007) 11 SCC 363] to urge that areasonable period of four years should be read into the Rules.The Supreme Court has in the said decision held that the powerto revise suo-motu under Section 21 of the Punjab General SalesTax Act, 1948 should be exercised within a reasonable period.The period was arrived at on the basis of the statutory schemeand the notice issued to show cause against the proposedrevision of assessment order five years after its completion wasquashed. It is the case of the petitioner that a period of fouryears for completing the assessment under 6(5) of the Rules isreasonable when the same period has been specified for re-assessment under Rules 6(7) and 6(8) of the Rules. There ishowever no scope for such hypothesis in the instant case sinceSection 17 of the KGST Act comes to the rescue of therespondents to complete the assessment within the extendedtime in view of Section 9(2) of the CST Act. I however permit thepetitioner to file objection to Exts.P1, P3 and P4 notices andraise all available contentions notwithstanding the fact that its attempt to nip the assessment in the bud is hereby aborted. Resultantly the Writ Petition fails and is dismissed. No costs. V.CHITAMBARESH,Judge. nj.