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2020 (11) TMI 80 - HC - VAT and Sales TaxTime Limitation for completion of assessment - though the assessees sought the limitation period to be limited to four years as has been prescribed under sub-rules (7) and (8) of Rule 6 of the CST Rules, the decisions thought it fit to refer to the General Sales Tax laws applicable in the State, thus enlarging the period of limitation from that available in the Rules - HELD THAT:- Section 9 enables the levy and collection of tax and penalties exercising all or any of the powers conferred on the Department under the General Sales Tax law of the State, which is subject to the other provisions of the CST Act and the Rules framed there under - Under the KGST regime as was applicable till the year 2004-2005, there was a finalization of assessment contemplated after the return is filed. Under the KVAT regime, which came into force from 01.04.2005, on filing of return, there is a self assessment under Section 21, which deems the assessment to have been completed on the receipt of the return. The limitation provided is not from the date of finalization of assessment, but from the closure of the year to which the tax relates. Even a rectification of mistake can only be within three years of the expiry of the year to which the tax relates. In that context, it would not have been the intention of the executive Government to enable an assessment at any time after the return is filed when the rules provide a limitation period of re-opening either for determination of turnover or for revising the rate of tax or even for rectification of a mistake. We would have in that context found the reasonable time to be four years. Rule 6(5) does not provide for a period of limitation and when the General Sales Tax law provided a period of five years for re-opening an assessment which is deemed to be completed under Section 21, the same applies under the CST Act and the Rules. We cannot but observe that though Section 25 of the KVAT Act provides for re-opening of the completed assessment under Section 21, under the CST Rules the limitation provided for reopening of assessment on the ground of escaped assessment is four years. For the year 2005-06 and 2006-07, the notices issued under Section 6(5) were just prior to the close of the 8th year, i.e., respectively on 13.02.2014 and 19.03.2015. For the year 2007-08, notice was issued on 20.03.2015, just prior to the close of the 7th year - Decided in favour of the assessee and against the Department.
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