The prayer in the writ petition is for a Writ of Certiorari calling for the records on the file of respondent in CST:489551/95-96 dated 16.07.2010 and quash the same as illegal, arbitrary, barred by limitation, violative of the provisions of Section 22 of the TNGST Act, 1959 and against the Principles of Natural Justice.
2. The case of the petitioner is that he is carrying on business on execution of printing works and he is an assessee on the file of the respondent under the Central Sales Tax Act 1956 and erstwhile Tamil Nadu General Sales Act, 1959. For the assessment year 1995-96 (CST) the petitioner reported a total taxable and turn over of Rs.35,03,046/- and Rs.32,19,095/- respectively, vide regular monthly returns filed before the respondents. Originally, for the assessment year, the respondent passed an order on 29.10.1997, against which, the petitioner filed appeal before the Appellate Assistant Commissioner, Virudhunagar in AP(CST) No.204 of 1999. The said appeal was partly allowed and partly dismissed by the order dated 20.05.2002. As against the disallowed portion, the petitioner did not file any appeal. However, for the allowed portion, the department preferred appeal against the order before the Sales Tax appellate Tribunal (Additional Bench) Madurai, in MTSA No.246/05. The said appeal filed by the Department was dismissed by the Appellate Tribunal vide order dated 22.02.2006. Thereafter, the Department did not prefer any revision before this Court and therefore, the matter has become final. Therefore, pursuant to the order passed by the appellate Tribunal dated 22.02.2006, the respondent passed an order on 21.06.2007 giving effect to the said order of the lower appellate authorities, wherein, the excess tax paid by the petitioner was shown as Rs.1,74,094/- and refund order to that effect was also issued to the petitioner, based on which, the petitioner also obtained refund of the said amount from the treasury.
3. Only thereafter, after long years, ie., on 09.03.2010, the respondent again issued a notice for the same assessment year 1995-96, whereby the respondent proposed to levy a penalty of Rs.2,87,321/- under Section 22(2) of the TNGST Act 1959, as the said tax was collected by the petitioner and not paid to the Department. Therefore, objections were called for from the petitioner. The petitioner also filed its objections on 16.03.2010 objecting that the proposed levy of penalty on the ground that it is barred by limitation as contemplated in proviso to sub section 2 of Section 22 of the TNGST Act, 1959.
4. Thereafter, a personal hearing was given to the petitioner on 10.05.2010, 11.05.2010 and 12.05.2010. During the said personal hearings, the petitioner had also submitted before the respondent that the limitation of five years, as provided under the proviso to
Section 22(2) of the TNGST Act, would stand in the way, against the proposed levy of penalty against the petitioner. However, without considering the said legal submissions made on behalf of the petitioner, the respondent has passed the impugned order dated 16.07.2010, by which, it confirmed the proposals already contained in CST 489551/95-96 dated 09.03.2010 and by which, levying a penalty of Rs.2,87,321/- under
Section 22(2) of the Act, 1959. Challenging the same, the present writ petition has been filed with the aforesaid prayer.
5. Heard the learned counsel for the petitioner and the learned Additional Government Pleader for the respondent.
6. The learned counsel for the petitioner would heavily rely upon the provisions of 22(2) proviso, which reads thus:
?22.(2) If any person or registered dealer collects any amount by way of tax or purporting to be way of tax in contravention of the provisions of sub-section (1), whether or not any tax is due from such person or dealier under this Act in respect of the transaction in which he collects such amount, the assessing authority may, after giving such person or dealer a reasonable opportunity of being heard, by order in writing impose upon him by way of penalty [a sum which shall be,-
(i) where the excess amount has been collected in the bonafide belief that it had to be collected, one hundred per cent of the amount collected;
(ii) where the excess amount has been collected wilfully and knowing that it was not due to be collected, one hundred and fity per cent of the amount collected;; ] provided that no proceedings under this sub-section shall be commenced after a period of five years from the date of order of the final assessment by the assessing authority;
Provided further that no prosecution for an offence under sub-section (1-A) of section 45 shall be instituted in respect of the same facts on which a penalty has been imposed under this sub-section.?
7. The learned counsel for the petitioner would contend that in view of the said categorical provision, whereby 5 years limitation had been prescribed, within which, Section 22(2) of the TNGST Act can be pressed into service. In this case, admittedly, the assessment year was 1995-96 and the five years period was over by 31.03.2001 and the notice that proposed levy of penalty was issued only on 09.03.2010 ie., after very long years, which culminated with the impugned order dated 16.07.2010. Therefore, on that ground alone, the impugned order is unsustainable and therefore, the same is liable to be interfered with.
8. Per contra, the learned Additional Government Pleader (Tax) for the respondents would contend that the order impugned was passed not only under Section 22(2) of the TNGST Act, but also under
Section 9(2) of the CST Act, since the petitioner is an Assessee under CST, mainly reassessment has been done and levy of penalty was proposed under
Section 9(2) of the CST read with Section 22(2) of the TNGST Act. Moreover, the said proviso, which was heavily relied upon by the petitioner side, was inserted only in the year 2004 by Tamil Nadu Act 19 of 2004 and this case of the assessment year 1995- 96, which is a past case and moreover, as against the original assessment year, appeals were preferred by both sides and as against the appellate order, in respect of the allowed portion, Department preferred further appeal and the same was decided, of course, against the department only on 22.02.2006. Therefore, the five years limitation would start only from that date and not from the cut off date for the assessment year 1995-96 and therefore, notice dated 09.03.2010 as well as the impugned order dated 16.07.2010 are well within the period of limitation of five years, assuming that the said limitation can be pressed into service for the case on hand. Therefore, the learned Additional Government Pleader submits that no interference is warranted in the impugned order.
9. This Court has considered the rival submissions made by the learned counsel for both sides.
10. The only point raised in this case is that whether the impugned order reviewing the penalty on the petitioner for the assessment year 1995-96 is barred by limitation within the meaning of proviso to sub
section 2 of the 22 of the TNGST Act. The said provision, as has been extracted above, no doubt, has clearly given the limitation period of five years from the date of order of the final assessment by the assessing authority.
11. The said final assessment was over by an order dated 29.04.1997, even though thereafter appeals were preferred by both sides, a further appeal was preferred by the department as against the allowed portion and the appeal got dismissed on 22.02.2006, of course, against the department, that would not entitle the department to claim the benefit of extending the five years limitation period or switch over the five years limitation period from the date of final assessment order to the date of disposal of the further appeal by the appellate Tribunal. If this proposition as propounded by the respondents side is accepted, then, it can also be extended to the period, where if any writ petition is filed before this Court, as against the dismissal of the appeal by the Tribunal and in case, where it will take years together for disposal of such kind of writ petitions, the limitation point can also be stretched upon till the disposal of the writ petition. Therefore, this Court does not agree with the said argument advanced on behalf of the respondent that the five years limitation would start only from 22.02.2006, where appeal filed by the department was dismissed by the Sales Tax Appellate Tribunal.
12. The other reason advanced by the learned Additional Government Pleader for the respondent is that the impugned order was passed not only under
Section 22(2) of the Act, but also under
Section 9(2) of the CST Act. There is no such specific limitation period contemplated under CST Act especially, under
Section 9(2) and therefore, since the petitioner is an assessee under CST Act, the provision of 9(2) can be very well pressed into service. Therefore, limitation provided under proviso to 22(2) of the TNGST Act shall not take away the right of the respondent under
Section 9(2) of the CST Act. This argument advanced by the learned Additional Government Pleader for the respondent shall have no substance for the simple reason that though the petitioner is an assessee under CST, the modus operandi and the maximum procedure in making assessment and reassessment and levying penalty are to be dealt with, as has been contemplated under
Section 22(2) of the TNGST Act. In fact, it was done only under the procedure contemplated under the TNGST Act, that is the reason why
Section 22(2) was specifically invoked. When
Section 22(2) is invoked and by which, the present impugned order has been passed levying penalty against the petitioner, certainly, the limitation point raised therein under the proviso, which has been subsequently inserted in the year 2004 shall be taken into account and the same can be treated as a mandatory one. In that view of the matter, the present order, which is impugned herein, since admittedly, initiated and passed only after the limitation period of five years ie., on 09.03.2010 and ended on 16.07.2010, whereas the limitation was over on 31.03.2011 itself for the purpose of assessment year 1995-96. Therefore, this Court has no hesitation to hold that the impugned order is not sustainable because of the limitation provided as per
Section 22(2) proviso. Accordingly, the impugned order is liable to be quashed and therefore, the same is quashed. The writ petition is, therefore, allowed. The interim stay granted already is made absolute. No costs. Consequently connected Miscellaneous Petition is closed.
To The Assistant Commissioner (CT) ? II Sivakasi .