Indira Vs Assistant Commissioner (State Tax) (Madras High Court)
Conclusion: Notices issued to the respective banks attaching the accounts of the assessee maintained with them was valid as assessee did not file returns on time under Rule 7 of the TNVAT Rules, 2007, or submit complete returns for the assessment years, therefore, the deemed assessment passed under Section 22(4) of the TNVAT Act should be considered as the first assessment and the limitation for reopening the Assessment under Section 27 of the TNVAT Act, 2006 would apply only six years thereafter.
Held: Search took place at the place of business of assessee. However, the impugned notices were issued after a lapse of five years for the relevant assessment years. Assessee submitted that the procedure adopted was clearly contrary to the mandatory provision to the Section 65(4) of Tamil Nadu Value Added Tax Act, 2006 and Circular No.Q3/3259/2010, dated 14.06.2010. Assessee submitted that the determination of the tax liability under Section 27 of TNVAT Act, 2006 was beyond the period of limitation for the respective assessment years. It was submitted that the accounts of assessee were frozen without prior notice to assessee even before the impugned Assessment Orders dated 23.12.2019 were passed. Revenue argued that assessee failed to pay taxes and no proper documentation was provided during the search, therefore, the Writ Petition was time-barred and should be dismissed. It was held that section 25 of the TNVAT Act, 2006, specifically deals with the proceedings where an Assessee liable to pay tax fails to submit a return within the prescribed period or return submitted by an Assessee appears to be incomplete or incorrect, the Assessing Officer may after making such enquiry as may be considered necessary, determine the tax payable provisionally by such dealer to the best of this judgement. There is no time limit prescribed under section 25 of the of the TNVAT Act, 2006. Since no returns were filed by assessee in time or thereafter as was prescribed under Rule 7 of the TNVAT Rules, 2007, it had to be construed that the Impugned Assessments dated 23.12.2019 was the first assessment passed by AO under Section 22(4) of the TNVAT Act, 2006. The limitation for reopening the Assessment under Section 27 of the TNVAT Act, 2006 would apply only six years thereafter. Therefore, there was no merits in the challenge to the Impugned Order. Since the demand had now been confirmed there could not be any interference with the Impugned Notices issued to the respective banks attaching the accounts of assessee maintained with them. Therefore, this writ petition had dismissed.
