Assessments under Punjab VAT Act 2005 are framed u/s 29 of the Act. But there is time limit for completing the assessement under PVAT Act, after which no assessment can be framed. Here below I am attending the issue of time limit prescribed under section 29 of Punjab VAT Act, 2005 for framing assessment.
Assessment u/s 29(2) and 29(3) can be framed within three years: Section 29(4) of Punjab VAT Act provides that an assessement u/s 29(2),29(3) may be made within a period of three years after the date when annual statement was filed or due to be filed whichever is later. (Read article explaining assessments under Punjab VAT Act 2005).
Section 29(4-A) further provides specifically time limit for completing assessments in respect of year 2005-06. It provides that notwithstanding any thing contained in sub section 4, the assessment under sub-section 2 or sub section 3, in respect of which annual statement has already been filed, can be made within a period of three years, commencing from the 20th day of November, 2006.
Thus assessement for any year under sub-section 2 or 3 of section 29 can be framed within a period of three years from the date of filing of annual statement or last date of filing of such annual statement. The last date for filing annual statement in case of VAT dealers is 20th November and that of TOT dealers is 20th August every year.
Example: Thus assessment of a VAT dealer who has filed annual statement within due date can be framed only till 20th November 2009 and 20th November 2010 respectively. Thus the assessement of year 2005-06 and 2006-07 have become time barred and no assessment could be framed in respect of the said years in the current period unless the time limit of three years has been extended under proviso to section 29(4).
Extension of time limit for assessment: Proviso to sub section 4 of section 29 provides that the commissioner may by an order in writing, if the circumstances so warrant, allow assessment of a taxable or registered person after three years but not later than 6 years from the date, when annual statement was filed or due to be filed whichever is later.
However assessment relating to year 2005-06 in respect of which annual statement has already been filed, no extension of time limit beyond three years can be granted as section 29(4-A) is applicable irrespective of anything contained u/s 29(4).
Power of Extension must be exercised before the period of limitation expires: Thus the period of time limit for assessment u/s 29(3) may be extended. But the power of extenstion of time limit for assessment must be exercised before the limitation period of three years expires. There is a catena of judgments of Punjab & Haryana High court which make it clear that the power of extension of time limit from three years to six years must be exercised only before the limitation period ends. If the power of extension is exercised after the limitation period expires, such extension will not be valid.
Power to extend the period of limitation for completing assessment has to be exercised before the assessment becomes time barred and not after the period of limitation has expired- Rattan Coach Builders V State of Punjab[(2010) 15 STM 264 (HC-P&H) similar view expressed in Bharat Petroleum Corporation Ltd V State of Punjab [(2010) 15 STM 43 (HC-P&H)].
Prior opportunity of being heard must before extension order: Order of extension of time limit must also be passed after giving an opportunity of being heard to the assessee concerned (See my earlier artlicle on the issue of extension of Limitation)
Assessment framed after limitation period is void ab initio: Limitation for framing assessment was upto 30-04-2005 u/s 11(3) of PGST Act 1948 and the assessment was made on 30-05-2005 for the assessment year 2001-02 being the prescribed period of limitation was held void ab-initio. The limitation period is to be calculated upto the date on which judgement is released and not upto date on which judgement is reserved- State of Punjab V Nakodar Co-operative Sugar Mills Ltd. Decided on 07-04-2011 (HC-P&H) VATAP No 10 of 2011.
(It is to be noted here that section 11(3) of PGST Act, 1948 was almost similar to saection 29(4) ogf PVAT Act, 2005.
Time limit for Amendment in assessment: As per section 29(7) the designated officer may with the prior permission of Commissioner amend an assessment within a period of three years from the date of assessment order if he discovers under assessment of tax payable by a person for the reason that:
-Such person has committed fraud or willful neglect; or
-such person has misrepresented facts; or
-a part of the turnover has escaped assessment
Proviso to section 29(7) provides that no order amending assessment, shall be made without affording an opportunity of being heard to the effected person.
Time limit for Rectification of a mistake: As per section 29(8) a mistake apparent from record can be rectified within a period of one year only from the date of the assessment order. Such ractification can also be done only after giving an opportunity of being heard to the affected person.
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