TMI Blog2021 (7) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Commercial Taxes, Faizabad, U.P., by which the Assessing Authority was informed that 'C' Form produced by the purchasing dealer namely M/s.M.K.Traders have been found to be invalid and accordingly, a request was made to reject 'C' Form. Thereupon, after a period of eight years, a proposition notice dated 20.10.2014 was issued to the respondent. The respondent filed objection to the same on 29.12.2014 and eventually an order of re-assessment was passed on 31.01.2015 - The initiation of proceeding of re assessment is clearly barred by limitation as the case of respondent is governed by Section 46(1) of the Act and since the initiation of proceeding of re-assessment itself was beyond a period of eight years, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14.06.2016 passed by the Karnataka Appellate Tribunal. The petition was admitted by a Bench of this Court on the following question of law: In the facts and circumstances of the case, whether the Tribunal is right in holding that Re assessment order passed under Section 39(2) of the Karnataka Value Added Tax is barred by Limitation? 2. Facts leading to filing of this petition briefly stated are that the respondent is a dealer registered under the Karnataka Co-operative Societies Act, 1959 as well as the Karnataka Value Added Tax Act, 2003 and Central Sales Tax Act, 1956. The respondent is engaged in the business of manufacturing and sale of chocolates, coco products and trading of arecanut and copper sulphate. The respondent is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al before the Joint Commissioner of Commercial Taxes, who by an order dated 03.10.2015, dismissed the appeal preferred by the respondent. The assessee thereupon approached by filing an appeal before the Karnataka Appellate Tribunal. The Tribunal, by judgment dated 14.06.2016, inter alia, has held that the proceeding for re-assessment was barred by limitation and has allowed the appeal preferred by the assessee. In the aforesaid factual background, this petition has been filed. 5. Learned Additional Government Advocate for the appellant submitted that the Tribunal ought to have appreciated that the provisions of Section 40(2) of the Act are applicable and the extended period of 10 years apply to the fact situation of the case and therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther evidence comes to the notice of the prescribed authority; or (b) if the prescribed authority has reason to believe that the whole or any part of the turnover of a dealer in respect of any tax period has escaped re-assessment to tax; or (c) tax has been under re-assessed; or (d) has been re-assessed at a rate lower than the rate at which it is assessable under the Act; or (e) any deductions or exemptions have been wrongly allowed in respect thereof, the prescribed authority may, notwithstanding the fact that whole or part of such escaped turnover was already before the said authority at the time of re-assessment, proceed to make any further re-assessments in addition to such earlier re-assessment. 40. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate authority, a tribunal or competent court shall not be taken into account in computing such period for assessment or reassessment as the case may be. From perusal of Section 39(2) of the Act, it is evident that the power under Section 39(2) of the Act with regard to re-assessment under Section 39 can be invoked on any further evidence coming to the notice of the prescribed authority or if the prescribed authority has reason to believe that the whole or any part of turnover of a dealer in respect of any tax period has escaped re-assessment to tax, tax has been under re-assessed or has been re-assessed on the rate lower than the rate at which it is assessable under the Act or any deductions or exemptions have been wrongly allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of respondent is governed by Section 46(1) of the Act and since the initiation of proceeding of re-assessment itself was beyond a period of eight years, the proceeding has to be held to be barred by limitation in view of the period of limitation prescribed under Section 46(1) of the Act. It is pertinent to note that Section 40(2) of the Act applies to a case of a dealer who is unregistered and who has not paid taxes and has fraudulently failed to pay tax which results in punishment under Section 79 of the Act. It is pertinent to note that none of the aforesaid pre conditions are satisfied in the case of the respondent. Therefore, the condition precedent for invocation of Section 40(2) of the Act have not been fulfilled in the case of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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