Ashraf T.M. and Others vs Commercial Tax Officer, Commercial Taxes and Others

A. Muhamed Mustaque, J.—These writ petitions are filed by the assessees under the Kerala General Sales Tax Act, 1963 (for short, "the KGST Act"), challenging the assessment orders under section 19 of the KGST Act. The common issue in both writ petitions is relating to limitation. In W.P. (C) No. 3822 of 2012, the assessment is in respect of the year 2004-05. The original assessment was completed on June 2, 2006 and thereafter, a revised assessment order was passed on October 31, 2006.

The proceedings have been reopened in terms of section 19 of the KGST Act by issuing notice dated October 27, 2011. The assessment was completed on January 20, 2012. The petitioner''s case is that the assessment under section 19 is barred by limitation beyond the period of five years as prescribed under section 19 of the KGST Act.

In W.P. (C) No. 4864 of 2013, the assessment is for the year 2001-02. The original assessment was completed on July 11, 2003. It was appealed and modified assessment order was passed on October 7, 2006. The petitioner received a notice under section 19 of the KGST Act on January 17, 2012. Thereafter, the petitioner replied. The petitioner again received the notice on January 3, 2013. The petitioner raised objection. However, overruling the objection, the assessment has been completed on February 2, 2013. This order is under challenge.

The learned counsel for the petitioners submits that the assessment in both cases is out of time as the same was not initiated or completed within five years from the expiry of the year to which tax relates. There is no dispute much to the controversy for reckoning five years. The only issue raised in the counter is based on the Kerala Finance Act, 2011 by amending section 17 of the KGST Act. By the above amendment, all pending matters for assessment has been extended to be completed on or before March 31, 2012. Therefore, it is contended by virtue of the amendment under section 17 of the KGST Act, the authority has power to complete the assessment in terms of section 19 of the KGST Act.

It is to be noted that sections 17 and 19 of the KGST Act operate in a different domain. Section 17 of the KGST Act relates to the assessment. Section 19 of the KGST Act relates to the assessment of escaped turnover. In section 19 of the KGST Act, specifically five years time is provided. Unless and until that five years is altered or amended by statutory provision, that cannot be taken away by an amendment to section 17 of the KGST Act. Section 19 of the KGST Act being an independent provision, necessarily, the limitation has to be reckoned in terms of section 19 of the KGST Act itself and not with reference to section 17 of the KGST Act. In view of the fact that there is no corresponding amendment to section 19 of the KGST Act, the assessment in terms of section 17 of the KGST Act is barred by limitation. Accordingly, the writ petitions are allowed and the impugned orders are set aside.