COVID Limitation Extension Applies to VAT Assessments: HC Upholds Tribunal Order:

COVID Limitation Extension Applies to VAT Assessments: HC Upholds Tribunal Order The revisionist, a firm engaged in manufacturing and trading of spices, was registered under the Uttar Pradesh Value Added Tax Act, 2008. For A.Y. 2015-16, an ex parte assessment order dated 30.03.2019 was passed, creating a tax demand of Rs. 8,50,000 based on a survey conducted on 19.02.2016. The revisionist filed an application under Section 32 of the UP VAT Act on 05.08.2019 seeking a recall of the ex parte assessment, which was allowed on 27.09.2019. A fresh show cause notice was issued, books of account were produced, and proceedings recommenced. However, no assessment order was passed by 31.03.2020, which the revisionist claimed was the outer limitation period under Section 29(6). Thereafter, a second show cause notice was issued on 27.07.2020 and a fresh ex parte assessment order dated 14.08.2020 was passed, estimating suppressed sales and purchases. Appeals before the first appellate authority and the Commercial Tax Tribunal were unsuccessful on the issue of limitation, leading to the present revision. Issue Before HC: Whether the assessment order dated 14.08.2020, passed after recall of the earlier ex parte assessment, was barred by limitation under the UP VAT Act despite extension of limitation granted by the Supreme Court during the COVID-19 pandemic. HC's Order: The Allahabad High Court held that the assessment order dated 14.08.2020 was not barred by limitation. The Court observed that the Supreme Court, in a Suo Motu Writ Petition, had expressly excluded the period from 15.03.2020 to 14.03.2021 for the computation of limitation in all proceedings under any law prescribing limitation. The Court further noted that the State Government had issued a circular dated 17.08.2020 extending the limitation for proceedings under Section 32 of the UP VAT Act up to 31.10.2020 in view of the COVID-19 pandemic. The circular dated 25.08.2021, relied upon by the revisionist, was found to relate specifically to GST law and not applicable to VAT proceedings. Thus, the Tribunal’s order was upheld and both questions of law were answered in favour of the State. To Read Full Judgment, Download PDF Given Below