Andhra Pradesh VAT Act | Pleadings On Suppression Of Material Facts, Wilful Evasion Of Tax Are Sine Qua Non For Invoking S.21(5): High Court

"There is nowhere any mention of suppression of facts, much less, wilful suppression of facts, resulting in wilful evasion of tax, which is the sine qua non, for invoking Section 21(5) of the Act. In such circumstances, the provisions of Section 21(5) of the Act would not be applicable and the period of limitation would be four years, as set out under Section 21(4) of the Act," held Justice R. Raghunandan Rao and Justice Harinath N.

The order was passed in a Writ Petition filed by Chakka Enterprises challenging the assessment order, attachment of bank account, and immovable property, passed by the Commercial Tax Officer, Addanki Circle.

The main grievance of the petitioner was that the tax period in question ended in 2017, the order of assessment should have been passed within 4 as stipulated in section 21(4) of the Act. However, the assessment officer had passed the order beyond the period of limitation and had notified the petitioner only subsequent to his property being attached.

The counsel on behalf of the Assessing Officer contended that the petitioner was incorporative and deliberately avoided service. The notices were sent to the last known business address of the petitioner by registered post and were received by the petitioner.

The counsel for Commercial tax contended that the assessment order was passed on the basis of the best judgment assessment because no books of accounts or any other material were provided to the Assessing Officer. Thus, due to the wilful suppression of facts, section 21(5) was automatically invoked and the limitation was extended to 6 years.

The bench, after hearing both sides, noted that the order was passed relying on the returns filed by the petitioner, so the claim that no material was provided, could not be accepted.

“A perusal of the impugned order would show that the entire order goes on the basis of best judgment assessment, relying upon the returns filed by the petitioner.”

The bench also noted that the pleadings relating to 'suppression of martial facts' found no place in the assessment order, and were a sine qua non for invocation of section 21(5).

Thus, the writs were allowed, the assessment order and the penalty notice were set aside, and all consequential reliefs were granted.

Chakkas Enterprises vs. The Chief Commissioner Of State Taxes and Others

Counsel for petitioner: Peddibhotla Venkata Sai Rajesh

Counsel for respondent: GP for Commercial Tax