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2014 (7) TMI 1346 - HC - VAT and Sales TaxValidity of reassessment order passed by the AA under Section 39(1) of KVAT Act - barred by time limitation or not - Validity of cross appeals of the State. Whether, the FAA is correct in holding that the reassessment of the AA is not barred by time limitation as per Section 40 of the Act? - HELD THAT:- The issue is answered in the affirmative. The reading of the new substituted Section 40 clearly proves that the reassessment order dated 25th September, 2010 of the AA is not barred by time-limit. Even otherwise, it is to be noted that the AA has passed order considering the entire turnover for the year 2005-2006 as the turnover for the month of March 2006 and reassessment is done for the tax period of March 2006 alone. Considering this fact and without giving any finding whether it is correct or not, as per Section 40 of the Act as it stood then also, the reassessment order is not barred by time-limit as prescribed therein - the FAA is correct in resolving the first issue against the appellant and thereby the first point is answered in the affirmative. Whether, the cross appeals of the State are justified in view of the detailed findings of the FAA on each of the issues raised in the appeal which is being contested in these cross appeals? - HELD THAT:- The issue is answered partly in the affirmative. The tax period is defined under Section 2(33) of the Act and Rule 37 prescribes each calendar month as the tax period other than in the case of dealers who have opted for composition. In the case of the appellant, the tax period is a calendar month whereas, the AA has concluded reassessment order violating Rule 37 of the KVAT Rules, 2005 by determining the total turnover and the taxable turnover under KVAT Act and CST Act for the month of March 2006 only. The FAA is correct in holding that the AA has erred in clubbing the turnovers and passing the order for the month of March 2006 alone. The FAA should have stopped at this stage only without going into the merits of the case as the reassessment order of the AA is improper and not sustainable as the same has been done in violation of statutory provisions - the reassessment order need to be set aside and the case has to be remanded back to the AA with the direction that the reassessment orders are to be passed tax period wise separately under the KVAT Act and so also under the CST Act. Consequently, the impugned appellate order is also liable to be set aside. Therefore, the second point is answered partly in the affirmative. What order regarding the appeals and the cross appeals? - HELD THAT:- The matter need to be remitted back to the AA to pass orders afresh keeping in view of the time limitation and computation of time limitation as envisaged under Section 40 of the Act. Appeal disposed off.
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