Assessments Getting Time Barred By 31.03.2017 Can Continue Only Upto 31.03.2018: Kerala High Court

The Kerala High Court has held that the assessments that were getting time barred by 31.03.2017 can continue only up to 31.03.2018.

The bench of Justice Gopinath P. has observed that there was no material to conclude that notice was actually issued on 18.03.2018, as it is quite unlikely that a notice dated 18.03.2018 was not served on the petitioner till 25.03.2019. It is also seen from the notice that a hearing was proposed only on 30.03.2019, and it is quite inconceivable that a notice dated 18.03.2018 will propose a hearing more than a year later on 30.03.2019.

The petitioner/assessee has challenged the proceedings initiated by notice issued under the provisions of Section 25(1) of the Kerala Value Added Tax Act, 2003.

The petitioner submitted that in the earlier round of litigation between the petitioner and the respondent, the Court in the case of Ms. Priyadarshini Versus Assistant Commissioner of State Tax had directed that the assessments in respect of which the period of limitation for reopening under Section 25 of the KVAT was to expire by 31.03.2017 can be reopened up to 31.03.2018 by virtue of the amendment to the third proviso to Section 25 (1) of the KVAT Act vide the Kerala Finance Act, 2017.

The assessee submitted that though the notice issued in respect of the year 2011-12 was on 18.03.2018, it was served only on 25.03.2019, proposing a hearing on 30.03.2019, and even the earlier round of litigation proceeded on the basis that the date “18.03.2018” mentioned in the notice was a mistake and the actual date of the notice is 18.03.2019. In other words, the proceedings cannot be continued as the parties are bound by the earlier declaration contained in judgement, which makes it clear that the proceedings under Section 25(1) of the KVAT Act for the year 2011-12 can be continued only up to 31.03.2018.

The department contended that notice is issued within the time specified by the Court in judgement, though it was served only later. The earlier writ petition filed by the petitioner was disposed of only on 06.12.2019, and that may be the reason why there was a delay in actually serving the notice on the petitioner. However, it is not disputed that notice, though dated 18.03.2018, was actually served on the petitioner only on 25.03.2019.

The court noted that the date 18.03.2018 mentioned in the notice can only be a typographical error and that the notice was issued only on 18.03.2019.

The court, while allowing the petition, held that the issue stands covered against the respondent by the judgement itself, where it has been held that the assessments that were getting time barred by 31.03.2017 can continue only up to 31.03.2018. The judgement is a binding inter partes judgment between the petitioner and the department. Therefore, proceedings cannot be continued against the petitioner on the basis of a notice issued after the date specified in judgement for the assessment year 2011-12.

Counsel For Petitioner: Premjit Nagendran, Sri.P.Raghunath, M.Shylaja

Counsel For Respondent: Thushara James

Case Title: Intersource Exports (P) Ltd. Versus Deputy Commissioner Of State Tax

Citation: 2024 LiveLaw (Ker) 483

Case No.: WP(C) NO. 1520 OF 2021

Click Here To Read The Order