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2014 (9) TMI 453 - HC - VAT and Sales TaxValidity of assessment order passed - Denial of refund claim - Bar of limitation - whether it is a "deemed assessment" under rule 14(5A) or assessment under sub-rules (6) and (7), if an assessing officer undertakes assessment on the ground that the turnover escaped assessment to tax, it shall be within the period prescribed under sub-rule (8) - held that:- The patent difference in the language used in the phrase "if no assessment is made within a period of four years from the date of filing of the return" used in sub-rule (5A) and the phrase " within a period of four years from the expiry of the year to which the turnover relates" appearing in subrule (8)(b) make it very clear that an assessment undertaken under rule 14A(8)(b) should be within four years from the expiry of the year to which the turnover relates. In that view of the matter, the submission made by the petitioner that except in regard to the returns filed for the months of March, 2007, the assessment in respect of returns for the months of April 2006-March 2007 is barred by limitation cannot be accepted. The returns for the months of April, 2006 to March, 2007 or the returns relate to the turnover of the financial year 2006-07, and therefore, the assessment order passed on March 30, 2007, is well within the limitation. It is not barred by limitation. The feeble submission that the impugned assessment order was antedated has not been substantiated and therefore, we reject the same. We accordingly hold that the impugned assessment order dated March 30, 2011 is not barred by limitation as per rule 14A(8) of the State Rules. Section 7 of the VAT Act exempts goods listed in the First Schedule from VAT. As per entry 45 it is cotton fabrics which are exempted and not towels. Towels fall under entry 52 of the Fourth Schedule. Therefore whenever a dealer seeks exemption for cotton fabrics as falling under entry 45 of the Fourth Schedule it is for the assessment officer to enquire into the same. In this case, it is neither disputed nor denied by the petitioner that the CTO, Autonagar Circle, Vijayawada, inspected the petitioner's machinery and found that they were producing terry towels. Secondly in their objections filed after receiving show-cause notice the petitioner admitted of effecting sales of cotton terry towels. Further it was found that most of the sales were made to hotels and proposed that the petitioner was converting the fabric into towels and selling them. It is a question of fact and ordinarily in writ jurisdiction, it cannot be interfered with. Further the petitioner had an effective alternative remedy of filing appeal before the Appellate Deputy Commissioner. They waited for four months and chose to file writ petition challenging the impugned order. In this background, we are afraid we do not find any merit in the impugned assessment order. Decided against assessee.
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