2023 (9) TMI 724 - HC - VAT and Sales Tax

Validity of preassessment notices - impugned notices are barred by limitation in terms of Rule 5 (6) of the Central Sales Tax (Puducherry) Rules 1967 or not - HELD THAT - This Court is not inclined to entertain the batch of writ petitions at the stage of show cause notice for it is trite law that though there is no absolute bar or embargo against entertaining writ petitions against notices, however, interference should be in rare cases and not as a matter of routine. Though, the restriction is self imposed it has been consistently held that High Court shall exercise restraint in entertaining writ petitions under Article 226 of the Constitution of India at the stage of show cause notice. This Court is of the view that whether the notices are barred by limitation or not can be adjudicated by the authority issuing the notice and it is open to the petitioner to submit its objection to the proposal including the plea of limitation. Limitation is a mixed question of fact and law which is yet another reason as to why this Court is not inclined to entertain the writ petition at the stage of show cause notice. The writ petitions are disposed of.

Summary

Issues:
1. Challenge to preassessment notices on the basis of limitation under CST (P) Rules 1967.

Summary:
The batch of writ petitions challenged preassessment notices as time-barred under Rule 5(6) of the CST (P) Rules 1967. The petitioner, engaged in automotive fuel system business, claimed concessional tax rates without proper declaration forms. Notices issued for various assessment years directed reversal of Input Tax Credit. The petitioner submitted documents to support claims, but notices were challenged as barred by limitation.

Case of the Petitioner:
The assessments were claimed to be barred by limitation under Rule 5(6) of the CST (P) Act, rendering the notices null and void. The impugned notices invoking CST Act and PVAT Act were deemed misconceived due to jurisdictional issues governed by the CST (P) Rules 1967.

Case of the Respondents:
The respondents argued that the writ petitions were premature and should be raised before the Assessing Authority. Initiation of assessment proceedings within the prescribed period was cited as sufficient, regardless of the timing of the final assessment order.

Judgment:
The Court declined to entertain the writ petitions at the show cause notice stage, emphasizing the need for restraint in interference. Citing Supreme Court precedents, the Court highlighted that limitation issues should be addressed during the assessment process. The petitions were disposed of with liberty for the petitioners to file objections within six weeks for consideration by the Respondents.