2010 (8) TMI 848 - HC - VAT and Sales Tax

Summary

Issues:
Challenge against notice of reassessment dated February 3, 1999 on the ground of limitation under Article 226 of the Constitution of India.

Detailed Analysis:
1. Notice of Reassessment and Grounds Raised:
The petition challenged the notice of reassessment dated February 3, 1999, on the basis of being barred by limitation under section 35 of the Bombay Sales Tax Act, 1959. Other legal grounds were also raised but were deemed unnecessary for the decision.

2. Factual Background:
The original assessment order dated March 31, 1995, resulted in significant dues, which were later appealed. The Deputy Commissioner of Sales Tax allowed the appeal on October 29, 1996, directing a refund and setting aside the original assessment. Subsequently, a notice for revision was issued but was dropped following objections raised by the assessee. A search of the petitioner's premises in 1998 led to the issuance of the challenged notice of reassessment in 1999.

3. Submissions and Arguments:
The petitioner's counsel argued that the notice of reassessment was beyond the five-year limitation period prescribed by section 35 of the BST Act. It was contended that no material facts were suppressed, and therefore, the extended period of limitation should not apply. Various legal contentions were raised to challenge the notice.

4. Counter-Arguments:
The respondents' counsel acknowledged that there was no suppression of facts or misrepresentation by the petitioner. It was also recognized that invoking the extended period for reassessment was not justified, as the notice was issued beyond the five-year limitation period.

5. Court's Decision:
After considering the arguments, the court found that the notice of reassessment dated February 3, 1999, was indeed beyond the limitation period set by section 35 of the BST Act. As the limitation expired on March 31, 1997, and the notice was issued in 1999, it was deemed to be barred by limitation. Consequently, the court quashed and set aside the notice of reassessment, allowing the writ petition with no costs imposed.