Assessment Order Passed After Expiry Of Four Years To Which Return Relates Is Not Valid U/s 23(2) MVAT Act: Bombay HC
The Bombay High Court held that an assessment order passed after the expiry of four years from the end of the year containing the period to which the return relates, is not a valid order under sub-section (2) of Section 23 of the Maharashtra Value Added Tax Act (MVAT Act).
Karvy Innotech Limited (company), previously known as HCL Services Limited, had contested an assessment order and notice of demand issued by the Deputy Commissioner of State Tax (Revenue) for the financial year 2015-16. The Court quashed and set aside the impugned order.
A Division Bench of Justice K.R. Shriram and Justice Jitendra Jain, observed, “Sub-section (2) of Section 23 very clearly provides that where the return in respect of any period is filed by a registered dealer by the prescribed date and if the Commissioner considers it necessary or expedient to ensure that return is correct and complete and he thinks it necessary to require the presence of the dealer or the production of further documents, he shall serve on such dealer, a notice requiring him on a date and at a place specified therein, either to attend and produce or cause to be produced all documents on which such dealer relies in support of his return or to produce such documents or evidence as is specified in the notice.”
Advocate Gopal Mundhra represented the petitioner, while Addl. G.P. Jyoti Chavan appeared for the respondents.
The company was engaged in trading IT and electronic equipment and providing related services and was registered under the MVAT Act. The company raised several grounds against the impugned order issued by the Revenue.
The primary contention was regarding the limitation period provided under Section 23(2) of the MVAT Act. According to the petitioner, the return for the period from 1st April 2015 to 31st March 2016 should have been assessed by 31st March 2020. However, the order was digitally signed on 23rd June 2020, making it time-barred. The petitioner argued that the assessment order was issued beyond the four-year limitation period, rendering it invalid.
The petitioner also alleged the natural justice principles were not followed in their case since they were not given a personal hearing, despite petitioner seeking a personal hearing. This, according to the petitioner, contravenes the MVAT Act, which mandates an opportunity for a personal hearing before finalizing an assessment order.
“The same was served through SAP to the registered email ID of the dealer. He has not explained why he could not have served the same order which was allegedly digitally signed by him on 19th March 2020 and why a fresh digital signature had to be put on 23rd June 2020. It is also pertinent to note that the order which he had served by email on 24th June 2020 in the reference states 2020-21. Therefore, it is obvious that both are different documents. In view thereof, the only conclusion that can be arrived at is the order which has been made is dated 23rd June 2020,” the Court noted.
Consequently, the Court held that “the impugned assessment order having been passed after expiry of four years from the end of the year containing period to which return relates, is not a valid order and same is quashed and set aside. In view of these categorical findings of ours, we are not devoting time to deal with the submissions of the parties with regard to sub-section (5A) of Section 23 of the MVAT Act.”
Cause Title: Karvy Innotech Limited v. State of Maharashtra & Ors. (Neutral Citation: 2024:BHC-OS:8647-DB)
Appearance:
Petitioner: Advocates Gopal Mundhra, Parth Parikh and Darshan Madekar
Respondents: Addl. G.P. Jyoti Chavan