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2009 (2) TMI 886 - HC - VAT and Sales TaxProceedings initiated u/s 67 of the KVAT Act, 2003 challenged on the ground of the orders passed being vitiated on the ground of period of limitation having expired - Adjudicating officer ceased to have jurisdiction by virtue of limitation of one year provided under the proviso to Section 67(1) - Notice was issued u/s 67 pointing out that variation in stock was noticed during inspection and consequently appellant was called upon to file objection against proposal for penalty - No reply from appellant - another notice was issued proposing penalty for attempted evasion of tax for two years - Even though the adjudicating authority is bound to complete adjudication pursuant to search u/s 67 within one year from the date of detection of offence, appellant did not raise any objection of time bar even after receipt of two notices HELD THAT:- In this case we are told that the records were verified on 19.7.2007. However, it is not known whether the process of evaluation was carried out then or later. Counsel for the appellants contended that proceeding is time barred even with reference to date of verification of accounts which was on 19.7.2007. The verification of accounts need not be the date of detection of offence. During verification, the officer has to evaluate the accounts and compare the same with physical stock and only when he detects offence, he gets jurisdiction to proceed to levy penalty. Even though statute does not require the officer to record detection of offence, initiation of proceedings u/s 67 is sufficient evidence of detection of offence. We do not find anything in the Act to indicate the grounds on which Deputy Commissioner can extend the time for completion of proceedings u/s 67(1). In any case the contention of the counsel that the extension of time should be granted by the Deputy Commissioner within the time limit of one year is a tenable contention. If records prove that extension of time is granted beyond one year from date of detection of offence, then such proceedings automatically become invalid affecting the validity of the penalty order itself. This is a matter which requires to be examined by the appellate authority with reference to records. However, we do not think any adjudication proceedings is contemplated under the Act requiring notice to be issued to the dealer or even issuing a communication extending the time. If the dealer raises objection to the penalty notice on ground of limitation, then AO is bound to communicate the order of the Deputy Commissioner and thereafter only he gets jurisdiction to continue the proceedings against the assessee. In this case appellant has not raised the objection of limitation when notice was served proposing penalty. So much so, appellant can raise the objection only in appeal and ld Single Judge rightly held so. We, therefore, dismiss the Writ Appeal leaving freedom to the appellant to verify the records and raise limitation as a ground, which appellate authority will consider with reference to the records and in the light of the meaning assigned to the Section. Appellant is granted two weeks time from date of receipt of this judgment to file appeal, if it is not already filed.
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