TMI Blog2014 (7) TMI 1346X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Taxes under Section 51(1) of the Act, which has been upheld by this Tribunal while disposing the Interlocutory Application No. 1 filed by the State in cross appeals granting stay for refund of tax vide order dated 30th March, 2012 in STA Nos. 768 to 780 of 2011, the appellant challenged this stay order of the Tribunal before the Hon'ble High Court by filing writ petitions bearing W.P. Nos. 12772 to 12784 of 2012 (T-RES) which has been disposed of by judgment dated 5th June, 2012 allowing the writ petition in part, directing the Tribunal to reconsider the matter and pass fresh order. The appellant has challenged this judgment also, by filing writ appeal bearing W.A. Nos. 3320 to 3332 of 2012 (T-RES). In the writ appeal, the Hon'ble High Court by its judgment dated 11th September, 2012 directed this Tribunal to construe the cross-objections as appeals and should be disposed of in accordance with law. While directing so, the Hon'ble High Court had held that the appeal by the assessee before the Tribunal appears to be untenable exercise and also observed that when the assessee had succeeded before the Appellate Authority, he cannot file an appeal against such order onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. The demand from the first proposition notice of ₹ 32,57,441/- of tax, penalty and interest has been raised for an amount of ₹ 30,19,65,840/- of tax, penalty and interest. This has been further revised by the 3rd proposition notice dated June 25, 2010 wherein, the AA had proposed to levy tax, penalty and interest of ₹ 2,11,28,657/- under the KVAT Act and ₹ 76,36,98,538/- under the Central Sales Tax Act. (iv) Finally, the AA has passed orders on 25th September, 2010 which has been served on 12th October, 2010 by taxing the following transactions as under: (a) Software sold by the appellant from the State of Gujarat as a turnover from Karnataka; and (b) Consulting services provided by appellant as transfer of right to use. (v) Aggrieved by the said reassessment orders under KVAT Act and CST Act, the appellant filed appeals before the FAA who framed five specific issues to resolve the appeals. While disposing the appeals, the FAA has answered issues 2 to 5 in favour of the appellant and issue 1 is only one which has been answered against the appellant relating time limitation as specified under Section 40 of KVAT Act for passing order by the AA. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6-2007 were examined by the Deputy Commissioner of Commercial Taxes (Investigation) which had led to the issuance of reassessment order under Section 39(1) of the Act for the periods of September 2006 to March 2007. (vi) The appellant submits that as there is no additional evidence being brought on records by the AA, the AA is not justified to take shelter under Section 40(1)(b) of the Act and states that the investigations carried by the Investigation Wing resulted in the acceptance of the returns for the year 2005-2006 and issuance of reassessment order for the periods of September 2006 to March 2007. It is submitted that notwithstanding the above contention, assuming without accepting that three years of time shall be applicable in the current situation, then also the AA has simply relied on the financial statements already submitted before him as the basis for the purpose of reassessment. 5. On the above grounds, the prayer is made to set aside the findings of the FAA only on the question of time limitation. 6. The State has filed cross-objections against the appeals filed by the appellant which is numbered as Cross Appeal Nos. 1433 to 1445 of 2014. The grounds urged b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, 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? (3) What order regarding the appeals and the cross appeals? 9. Our answer to the above points are as under: Point No. 1.--In the affirmative. Point No. 2.--Partly in the affirmative. Point No. 3.--As per the final order for the following: REASONS 10. Point No. 1.--The appellant has contested that the FAA has erred in coming to the conclusion that the reassessment order passed by the AA under Section 39(1) of the Act is not barred by limitation. The reasons assigned by the FAA for this, is to the effect that the information obtained by the AA from the books of accounts and documents made available by the appellant has been relied upon for the evidence of facts to frame reassessment and such information is within three years from having come to his knowledge which is sufficient in the opinion of the prescribed authority to justify making of the reassessment. This reasoning has been assailed by the appellant on the ground that no new information or facts have emerged and all such in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 31st day of March, 2007 shall be made under this sub-section within a period of ten years after the end of the prescribed tax period . 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. Hence, we are of the opinion that the FAA's finding is saved by the Act No. 54 of 2013 cited supra. 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. Hence, we are of the opinion that the FAA is correct in resolving the first issue against the appellant and thereby the first point is answered in the affirmative. 11. Point No. 2.--In the cross appeals, it has been urged that the FAA ought to have regularised the reassessment order when the all the tax periods have been clubbed by the AA to do reassessment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment order has been passed for the tax period of March 2006 'alone' instead of passing orders tax period wise under the KVAT Act as well as the CST Act separately, the reassessment orders of the AA are not sustainable in the eyes of law and liable to be set aside. Therefore without touching on the merits of the other issues raised in the cross appeals namely the third, fourth and fifth issues mentioned above, as the reassessment orders suffers from infirmity and done in gross violation of statutory rules, the same need not be answered by us. Therefore, we come to the conclusion that 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. Point No. 3.--As Point No. 1 is answered in the affirmative, the appeals bearing STA Nos. 768 to 780 of 2011 filed by the appellant are liable to be dismissed and as Point No. 2 is answered partly in the affirmative, the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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