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SC Says High Courts In Writ Jurisdiction Cannot Entertain The Assessment Order

The Supreme Court on Wednesday held that the High Court under writ jurisdiction cannot entertain the assessment order passed by the competent authority and statutory remedy of appeal against that order stood foreclosed by the law of limitation.

The bench of Justice A.M. Khanwilkar & Justice Dinesh Maheshwari allowed the appeal the plea of the appellant (Assistant Commissioner (CT)  LTU, Kakinada) that the High Court in exercise of its writ jurisdiction under Article 226 of the Constitution of India cannot entertain an assessment order on the sole ground that the statutory remedy of appeal against the order stood foreclosed by the law of limitation.

Brief facts of the case are that the Glaxo Smith Kline Consumer Health Care (respondent) is engaged in the business of manufacturing and sale of Horlicks, Boost, Biscuits, Ghee, Ayurvedic Medicines etc. The Assistant Commissioner had called upon the respondent to produce books of accounts for the assessment year 2013¬14 for finalization of assessment under the 1956 Act.  The authorized representative of the respondent produced declaration in Form “F” in support of its claim that certain transactions are inter State transfers.   The information and declaration furnished by the   respondent   was   duly   verified   and   after   giving   personal hearing final assessment order came to be passed   by   the   Assistant   Commissioner   on   21.6.2017,   raising demand   of   Rs.76,73,197/¬   (Rupees   seventy   six   lakhs   seventy three thousand one hundred ninety seven only).

Thereafter the respondent filed an application under Rule 60 of the Andhra Pradesh Value Added Tax Rules, 2005 , highlighting the error made in raising the demand based on incorrect turnover.   This application was filed only on 8.5.2018,   which   came   to   be   rejected   by   the   Assistant Commissioner   vide   order   dated   11.5.2018.     Aggrieved   by   the decision dated 11.5.2018, the respondent filed an appeal before the   Appellate   Deputy   Commissioner   of   Commercial   Taxes, Vijayawada   on   28.5.2018,   which   came   to   be   rejected   on 17.8.2018. Thereafter the appeal filed by the respondent on 24.9.2018 against the assessment order dated 21.6.2017, the same was dismissed on 25.10.2018   being   barred   by   limitation   and   also   because   no sufficient cause was made out, thereafter the respondent was advised to approached the High Court by way of writ jurisdiction under Article 226. The High Court allowed the writ petition directed the Assistant   Commissioner for reconsideration of the matter afresh after giving personal hearing to the respondent to explain the discrepancies.

Thereafter the Assistant commissioner being aggrieved challenged the judgment of High Court by way of SLP which is converted into appeal. The Supreme Court observed that  “ the   respondent   having failed to assail the order passed by the appellate authority, dated 25.10.2018 rejecting the application for condonation of delay, the assessment order passed by the Assistant Commissioner, dated 21.6.2017   stood   merged,   need   not   detain   us   in   view   of   the exposition of this Court in “Raja Mechanical Company Private Limited  vs.  Commissioner  of  Central  Excise,  Delhi¬I”.   It is well settled that rejection of delay application by the appellate forum does not entail in merger of the assessment order with that order.  Therefore, the High Court ought not to have entertained the subject writ petition filed by the respondent herein.

-India Legal Bureau

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