Chakkas Enterprises Vs Chief Commissioner of State Taxes and Others (Andhra Pradesh High Court)
Andhra Pradesh High Court has set aside the VAT assessment order against Chakkas Enterprises, ruling that the assessment was issued beyond the prescribed limitation period. The case involved tax demands for the period between June 2, 2014, and June 13, 2017, along with a penalty notice dated September 16, 2021. The petitioner, a registered dealer under the A.P. VAT Act, 2005, challenged the attachment of their bank accounts and immovable property, contending that the assessment order was issued after the four-year limitation period under Section 21(4) of the Act. The tax authorities argued that the petitioner deliberately evaded service of notices and that the assessment was based on a best judgment assessment due to non-cooperation. They also cited Section 21(5), which extends the limitation period to six years in cases involving willful tax evasion.
The High Court found that the assessment order did not establish willful suppression of facts, which is a prerequisite for invoking Section 21(5). Since no evidence of deliberate tax evasion was cited in the order, the court ruled that the four-year limitation under Section 21(4) applied. Consequently, the assessment order and penalty notice were deemed invalid and beyond limitation. The court also quashed all related actions, including the attachment of the petitioner’s bank accounts and immovable property. With this ruling, all proceedings initiated under the disputed assessment were nullified.
