Santhosh Builders vs Deputy Commissioner of Commercial Taxes (CT), Nellore and Others

Goda Raghuram, J.—This writ petition is directed against the revisional orders dated August 31, 2006, passed by the first respondent in proceedings bearing R.V. No. 239/04-05/A6 and the consequent order passed by the second respondent bearing GI No. 12537/2001-2 dated November 7, 2006, seeking recovery of tax of Rs. 2,76,068 and attaching the bills pending with the third and fourth respondents. The petitioner is a firm in the business of securing and executing P.W.D., R and B and other contract works and in executing works on sub-contracting basis. The firm was incorporated in 1994 and is a registered dealer on the rolls of the second respondent. On the death of the husband of the deponent on April 18, 2002, the firm was dissolved and a new firm was reconstituted on October 28, 2003, a fact informed to the second respondent vide letter dated May 28, 2005, asserted to have been acknowledged by the second respondent; a fact not disputed in the counter-affidavit. On October 30, 2002, the assessment of tax under the Andhra Pradesh General Sales Tax Act, 1957, for the years 2001-02 was made by the second respondent granting the benefit of exemption from levy of tax on a turnover of Rs. 1,26,00,876.

The petitioner alleges that beyond four years from the order of assessment dated October 30, 2002, the first respondent invoked the power conferred u/s 20(2) of the Act and issued a fresh show-cause notice dated February 21, 2006, proposing to deny the benefit of exemption allowed by the second respondent on the turnover of Rs. 1,26,00,876. According to the petitioner, the impugned order dated August 31, 2006 was never communicated to it. When it was making enquiry with the third and fourth respondents the arrears due to the firm, the petitioner was informed that the second respondent issued proceedings for attaching the pending bills due to the firm under sections 16C and 17 of the APGST Act and section 29 of the Andhra Pradesh Value Added Tax Act, 2005 and that these proceedings for attachment were pursuant to the order dated August 31, 2006 passed by the first respondent, exercising the power of revision u/s 20(2) of the Act.

The petitioner assails the order purportedly passed by the first respondent on August 31, 2006 and never communicated to it on the ground that the said order is barred by the limitation period prescribed u/s 20(3) of the Act, which enjoins that the power of assessment shall be exercised within a period of four years from the date on which the order of assessment is served on the dealer. As the primary order of assessment was passed on October 30, 2002 and served on the petitioner on November 5, 2002, the revisional order could be passed exercising power u/s 20(2) of the Act only within four years from November 5, 2002, i.e., by November 4, 2006, is the contention.

Counsel relied upon several decisions to contend that since the revisional order passed by the first respondent was not served on it, it must be presumed that the order was passed beyond the period of limitation.

In State of Andhra Pradesh v. M. Ramakishtaiah & Co., Khetmal [1994] 93 STC 406 (SC), the Supreme Court was considering a fact-situation where the revisional order was communicated much beyond the period of four years prescribed as limitation for exercising the powers of revision. The court observed that since the order of the Deputy Commissioner said to have been made on January 6, 1973 was served upon the assessee only on November 21, 1973, i.e., 101/2 months later and there being no explanation from the Deputy Commissioner why it was so delayed, it is legitimate to presume that the order was not made on the date it was purported to have been made and could have been made after expiry of the prescribed four years period.

Again in Ushodaya Enterprises Ltd. Vs. Commissioner of Commercial Taxes, A.P., Hyderabad, following the judgment M. Ramakishtaiah & Co. [1994] 93 STC 406 (SC), this court observed (724 in 111 STC):

The next question that has been argued before us is the issue of limitation. The impugned order of the Commissioner bears the date November 20, 1995. It purports to revise the order dated November 25, 1991 passed by the Appellate Deputy Commissioner, Kakinada. That order was served on the petitioner on January 27, 1992. For setting aside that order in exercise of revisional powers u/s 20(1), a limitation of 4 years from the date of service of notice is prescribed. It is not in dispute that the last date for passing a final order in exercise of revisional power u/s 20(1) is January 27, 1996, i.e., four years from the date of service of the appellate order. Though the impugned revisional order of the Commissioner bears the date November 20, 1995, admittedly, it was served on the appellant on August 3, 1996. We find from the record that the said order reached the Commercial Tax Office concerned on July 27, 1996, as the stamp on the top of the order bears out and thereafter it was sent for service to the appellant who received the same on August 3, 1996. Thus, there is a time lag of more than eight months between the purported date on which the impugned revisional order was passed and the date on which it was served on the assessee. The reason for such inordinate delay remains unexplained. Even after perusal of the relevant record, the learned Government Pleader is not in a position to tell us as to what caused such extraordinary delay...

Similar presumption, in the absence of any explanation for the long delay in serving the order, was drawn by this court again in Vamshi Art Printers Pvt. Ltd., Hyderabad v. Commercial Tax Officer, Basheerbagh Circle, Hyderabad [2007] 44 STJ 50 holding and reiterating that delay in serving the order of revision beyond the period of limitation, legitimizes the presumption that the order was not passed on the date on which it is purported to have been passed.

In the counter-affidavit, the first respondent asserts that the revision order was passed on August 31, 2006 and as the petitioner-firm was closed, the order was sent by registered post on July 20, 2007 to all the six partners of the firm including the petitioner, who spoke to the affidavit; however, four covers were returned undelivered with postal endorsement addressees not traceable or available in this address and that as a last resort, the revisional order was served by affixture on August 16, 2007.

As already noticed, in the facts of the case, the revisional order was required to be passed by November 4, 2006, but was admittedly sent to the partners of the firm including the petitioner by registered post acknowledgement due on July 20, 2007, beyond the period prescribed u/s 20(3) of the Act. There is no explanation as to what steps were taken from August 31, 2006 till July 20, 2007 to communicate the revisional order to the petitioner. In view of these circumstances, it must be presumed that the order was not passed on the date it is purported to have been passed but it was passed beyond the period of limitation prescribed u/s 20(3) of the Act. Consequently, the order cannot be sustained being barred by limitation and is accordingly quashed. The writ petition is allowed as above, but in the circumstances without costs.