IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE THE CHIEF JUSTICE MR.H.L.DATTU & THE HONOURABLE MR. JUSTICE K.M.JOSEPH FRIDAY, THE 25TH JANUARY 2008 / 5TH MAGHA 1929 ST.Rev.No.14 of 2004 ------------------------------------------- TA.No.494/2002 OF SALES TAX APPELLATE TRIBUNAL ADDITIONAL BENCH KOZHIKODE (ORDER DATED 19-6-2003) .................... REVISION PETITIONER/APPELLANT/ASSESSEE:- -------------------------------------------------------------------- M/S.SOUTH INDIA PLASTIC CORPORATION, CHERUVATHUR. BY ADV. SRI.T.M.SREEDHARAN SMT.M.S.KIRAN SRI.DEEPAK JOY.K. RESPONDENT: RESPONDENT/REVENUE:- ----------------------------------------------------------- STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY TO GOVERNMENT, SECRETARIAT, THIRUVANANTHAPURAM. BY SENIOR GOVERNMENT PLEADER SRI.MUHAMMED RAFIQ. THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 25/01/2008, ALONG WITH STRV NO. 16 OF 2004 STRV NO. 20 OF 2004 THE COURT ON THE SAME DAY PASSED THE FOLLOWING: H.L.DATTU, C.J. & K.M.JOSEPH, J. ------------------------------------------------------ S.T.Rev.Nos.14/2004, 16/2004 & 20/2004 ------------------------------------------------------- Dated, this the 25th day of January, 2008 ORDER K.M.Joseph, J. Being connected, these revision petitions are heard together and disposed of by this common order. (2). The petitioner is a registered dealer both under the provisions of Kerala General Sales Tax Act and Central Sales Tax Act (for short K.G.S.T.Act and C.S.T. Act). The petitioner calls in question the order passed by the Kerala Sales Tax Appellate Tribunal, under Section 41 of the K.G.S.T.Act. The question raised was whether the assessment orders which have been passed pursuant to the order of remand by the Appellate Assistant Commissioner dated 28-4-1997 in respect of assessment years 1982-83, 1981-82 and 1982-83 is barred by limitation. The short facts necessary for appreciating the questions of law raised are as follows: (3). In the appeals carried by the assessee, the appellate authority remanded the matter to the assessing authority for re-doing the matter by order dated 28-4-1997. The assessing authority received the order passed by the Appellate Assistant Commissioner in S.T.A.166/97 to 168/97 on 9-5-1997. The assessing authority is alleged to have passed the assessment orders for the assessment years 1981-82 on 21-3-2002. The assessing authority is further alleged to have passed orders in respect of the assessment year 1982-83 on 22-3-2002. It is the case of the Revenue that STRV Nos.14,16 &20 of 2004 -2- the assessment orders were communicated to the assessee on 21-6-2002. The petitioner took up the contention before the Tribunal that the assessment is barred by limitation. The Tribunal has found that the assessments were not barred by limitation. The finding of the Tribunal is as follows: “10. It is revealed from the page 71 of the asst., file relating to the year 81-82 (C.S.T.) that, the assessing authority received the copy of the order of AAC in STA 166/97 to 168/97 dt.28-4-97 on 9-5-97. By applying Sec.17 (8) of the KGST Act, 1963, the order of asst., after remand was to be passed within a period of 4 years from the expiry of the year in which the order was received by the assessing authority ie., within a period of 4 years from 1-4-98. So much so, the order of asst., after remand was to be passed prior to 31-3-02. In this matter, it is seen from the pages 89 and 90 of the asst., file that, the order of asst., dt.21-3-02 (passed after remand) was seen signed by the assessing authority on 21-3-02 itself. 11. On a reading of the ruling relied on by the learned counsel for the appellant and reported in (1995) 3 TR 224 (Ker.) in THE AGRL. INCOME TAX OFFICER AND ANOTHER V. K.JOSEPH N JACOB, it is seen that, it is a ruling relating to an asst., under the provisions of the AIT Act, 1950. Hence, we find that, the principle laid down in the said ruling cannot be made applicable to these matters which are relating to assts., under the provisions of the KGST Act, 1963. STRV Nos.14,16 &20 of 2004 -3- 12. Thus, in the light of our above discussion and finding, it is clear that, the order of asst., for the year 81-82 (after remand) was passed in due compliance with the requirements contained in Sec.17(8) of the KGST Act, 1963. That being so, we find that, the order of asst., for the year 81-82 dt. 21-3-02 is not barred by limitation. (4). We heard the learned counsel appearing for the revision petitioner as also the learned Government Pleader for the State. The learned counsel appearing for the petitioner would contend that, the Tribunal erred in deciding the question as to whether the assessment was barred by limitation. The reason given is erroneous. The learned counsel for the petitioner relied on the decision of this Court in Cochin Plantations Ltd. Vs. State of Kerala (1997 KLJ (Tax Cases) 96). It is a case under the K.G.S.T. Act. In that case, this Court held as follows: “The assessee had filed its returns much before the assessment order was served on it. The assessment order become effective only when it is issued from the office of the assessing authority. Assessment will not be over until the assessment is communicated to the assessee. The assessment order becomes operative only on service on the party intended to be affected thereby. The order of any authority cannot be said to be passed unless it is in someway pronounced or published or the party affected has the means of knowing it. It is not enough if the order is made, signed, and kept in the file, STRV Nos.14,16 &20 of 2004 -4- because such order may be liable to change at the hands of the authority who may modify it, or even destroy it, before it is made known, based on subsequent information, thinking or change of opinion. To make the order complete and effective, it should be issued, so as to be beyond the control of the authority concerned, for any possible change or modification therein.” (5). The Tribunal found that the assessing authority has passed the order within the period of limitation, going by the entries in the file. A contention was raised before the Tribunal that it is not sufficient to pass the order in order to complete assessment, for getting over the plea of limitation but it should be issued. Reliance was placed by the petitioner on the decision of this Court in Agricultural Income Tax Officer and another V. K. Joseph N. Jacob (1995) 3 KTR 224 (Ker.). The Tribunal overcame the principle which was laid down by the Court in the said decision on the basis that the said case arose under the provisions of Agricultural Income Tax Act. (6). We would think that the approach of the Tribunal to the question as to whether the assessment was being barred by limitation is patently unsustainable. The only basis for sustaining the orders of assessment by the Tribunal is the note in the file. The order of assessment has to be passed within a period of 4 years from the date on which the order of remand was received by the assessing authority as justification was found from the four corners of Section 17 (8) of the K.G.S.T. Act. STRV Nos.14,16 &20 of 2004 -5- Section 17 (8) of the K.G.S.T.Act reads as follows: “Any assessment or reassessment in pursuance of an order of appellate or revisional authority shall be completed within a period of four years from the expiry of the year in which the order was received.” (7). It cannot be disputed that under the Agricultural Income Tax Act or under the Kerala General Sales Tax Act, to constitute a proper order of assessment it should not only be passed but also be issued within the period of limitation. We find that this view is taken by a Division Bench of this Court in the decision reported in Government Wood Works Vs. State of Kerala {1988 (69) STC 62 } wherein the Court held as follows: .....(ii). that the order of any authority could not be said to be passed unless it was in some way pronounced or published. It was not enough if the order was made, signed and kept in the file. To make the order complete and effective, it should be issued, so as to be beyond the control of the authority concerned, for any possible change or modification. This should be done within the prescribed period, though the actual service of the order may be beyond that period.” (8). In the light of the principle which is established by the STRV Nos.14,16 &20 of 2004 -6- decisions of this Court, under the Agricultural Income Tax Act or K.G.S.T. Act we are of the view that the conclusion arrived at by the Tribunal cannot be sustained. This is for the reason that the Tribunal has sustained the orders of assessment finding that the orders of assessment have been noted to have passed within 4 years of remand under Section 17(8) but without further enquiry being made whether the orders were issued to the petitioner within time. The Tribunal came to the conclusion without considering the question whether the orders were in fact issued within the period of limitation prescribed under Section 17 (8) of the K.G.S.T.Act. We think that the Tribunal was in error in reaching to the conclusion that the assessment is not barred by limitation. (9). In such circumstances, we are left with no other choice, but to allow the revision petitions filed by the petitioner and to answer the questions of law framed by the petitioner in favour of the petitioner and against the Revenue. The Revision Petitions are allowed as above. (H.L.DATTU) CHIEF JUSTICE (K.M.JOSEPH) JUDGE MS