Siemens Limited Vs State of Maharashtra (Bombay High Court)
Bombay High Court held that since the Commissioner failed to complete the assessment for the relevant years within a period of ten years of issuing the initial notice in Form-H, the notice is quashed.
Facts- The petitioner is a ‘Company’ incorporated under the Companies Act, 2013 and has been registered as a ‘dealer’ in the State of Maharashtra under the provisions of Section 2(16A) of the Maharashtra Municipal Corporations Act, 1949. The Dealer was liable to pay cess on bringing goods within the limits of Navi Mumbai Municipal Corporation – hereinafter referred to as the Municipal Corporation under Section 152A of the Act of 1949. Accordingly, the Dealer filed returns for the period commencing from 01.04.2008 to 31.03.2009 and thereafter for each financial year till 31.03.2013 under the Maharashtra Municipal Corporation (Cess on Entry of Goods) Rules, 1996. The assessment of cess is carried out under Rule 25 of the Rules of 1996. For each of the aforesaid years, the Dealer was issued notice in Form-H as provided by Rule 25(3) of the Rules of 1996 since the Commissioner was not satisfied with the returns filed by the Dealer. By such notice in Form-H, the Dealer was required to produce all evidence on which the Dealer sought to rely in support of the returns as filed.
According to the Local Body Tax Officer, the Dealer failed to produce relevant documents in support of the returns as filed. After the last notice dated 30.10.2014, Form-H reminder came to be issued on 24.09.2019 for all the aforesaid years. According to the Dealer, by not completing the process of assessment for a long period of almost eight to ten years, the Municipal Corporation was not entitled to proceed further in the matter. In that premise, Form-H reminder issued on 24.09.2019 in each writ petition is under challenge. The Dealer seeks a declaration that the action of issuing such notice belatedly was contrary to the provisions of the Act of 1949 read with the Rules of 1996.
Conclusion- We thus hold that failure to complete the process of assessment under Rule 25(3) and (4) of the Rules of 1996 for a period of more than ten years from the date of issuance of the initial notice in Form-H would render the process of assessment liable to be quashed on the ground of unreasonableness and failure to complete the assessment for no justifiable reason.
It is held that since the Commissioner failed to complete the assessment for the relevant years within a period of ten years of issuing the initial notice in Form-H, the notice dated 24.09.2019 is quashed.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
Since similar challenges have been raised in these writ petitions, they are being decided together by this common judgment. RULE. Rule made returnable forthwith and heard the learned counsel for the parties.
2. The facts relevant for considering the challenge raised in the writ petitions are that the petitioner is a ‘Company’ incorporated under the Companies Act, 2013 and has been registered as a ‘dealer’ in the State of Maharashtra under the provisions of Section 2(16A) of the Maharashtra Municipal Corporations Act, 1949 (for short, ‘the Act of 1949’). The Dealer was liable to pay cess on bringing goods within the limits of Navi Mumbai Municipal Corporation – hereinafter referred to as the Municipal Corporation under Section 152A of the Act of 1949. Accordingly, the Dealer filed returns for the period commencing from 01.04.2008 to 31.03.2009 and thereafter for each financial year till 31.03.2013 under the Maharashtra Municipal Corporation (Cess on Entry of Goods) Rules, 1996 (for short, ‘the Rules of 1996’). The assessment of cess is carried out under Rule 25 of the Rules of 1996. For each of the aforesaid years, the Dealer was issued notice in Form-H as provided by Rule 25(3) of the Rules of 1996 since the Commissioner was not satisfied with the returns filed by the Dealer. By such notice in Form-H, the Dealer was required to produce all evidence on which the Dealer sought to rely in support of the returns as filed. The relevant dates when Form-H came to be issued by the Municipal Corporation are as under:-
