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2020 (11) TMI 25 - KERALA HIGH COURTRecovery of arrears of Sales Tax - inter-State sales turnover against 'C' Forms - time limitation - principles of natural justice - HELD THAT:- The recovery notices are of October 2014. The time limit prescribed vide amendment was, from five years, extended to six years as per the amendment brought in 2017. On account of a retrospective operation of newly introduced provision, assessee would not be in a position to adduce material to defend against an allegation of suppressed / escaped turnover. No doubt, retrospective operation of Section 42(3) would entail into reopening of assessments completed years back and assessee would not have relevant books of accounts and other records to defend the case against alleged escaped turnover. As per Rule 58(20) of KVAT Rules, assessee is required to maintain the books for a period of five years from the end of assessment year in question or two years from the date of disposal of the appeal or revision arising out of such assessment or from the date of completion of any other provisions under the Act connected with such assessment appeal or revision, whichever is later. Fixing of a reasonable period would have to be read in determining what reasonable should be. The oral scheme of KVAT Act in the interest of ensuring certainty in tax matters and also the necessity to interpret the provisions in the manner is to avoid unconstitutional results such as unreasonablness, unfairness and arbitrariness of statutory provisions. The time limits specified in Rule 58(20) of KVAT Rules offer a safe guarding factor to define the limits of power under Section 42(3) of the Act. Meaning thereby, it would not be proper to re-open assessments to bring the tax escaped turnover, which cannot be exercised in a manner that prejudicially affect an assessee, who would not be in a position to meet the charge against him for want of books of accounts and other relevant material - petition allowed.
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