RAJIVE BHALLA, J.
By way of this order, we shall decide VAT Appeal Nos. 84 and 85 of 2013 as they involve adjudication of the same question of law. For the sake of convenience, facts are being taken from VAT Appeal No. 84 of 2013.
The State of Punjab impugns the correctness of order dated 31.1.2013 passed by the Value Added Tax Tribunal, Chandigarh, accepting an appeal filed by the respondent and as a consequence. setting aside orders dated 23.4.2012 and 30.11.2011 passed by the Deputy Excise and Taxation Commissioner (Appeals), Faridkot Division, office at Bathinda and the Excise and Taxation Officer-cum-Designated Officer, Bathinda, respectively.
A brief reference of facts would be appropriate.
A large number of cases, including the cases in hand, were selected for re-assessment by invoking Section 29(4) of the Punjab Value Added Tax Act, 2005 (hereinafter referred to as the “Act”), but as the period of three years, provided for re-assessment, had expired and it was proposed to invoke the extended period of three years provided by Section 29(4) of the Act, a public notice was uploaded on to the website of the department, informing assessees in general, that the department proposed to invoke the extended period of three years. As no objections were received, notices were issued to assessees under Section 29(3) of the Act, including the respondent for framing assessments for the financial year 2006-07. The assessments were finalised by raising a further demand. Appeals filed by assessees were dismissed. The Tribunal has allowed the appeals, filed by assessees, by holding that service of notice on the website of the department, is not valid service and as personal notices were not issued or served, assessment orders are, therefore, null and void.
Counsel for the appellant submits that service by uploading a notice on the official website of the department is sufficient information to assessees, of departmental intent to invoke the extended period of three years, for reassessment. The Tribunal has adopted a hypertechnical approach by holding that as each assessee was required to be served personally, in accordance with the Rule 86 of the Punjab Value Added Tax Rules, 2005 (hereinafter referred to as the “2005 Rules”), the assessment orders are illegal. The assessees were aware of notices uploaded on the website of the department as they file returns on the website. Even otherwise, as there were 1268 dealers, it was not possible for the department to personally serve each assessee by an individual notice, within the extended period of limitation. The method adopted by the department, therefore, cannot be faulted. Counsel for the State of Punjab relies upon a judgment in Rai Vimal Krishna v. State of Bihar, AIR 2003 Supreme Court 2676, to contend that in a similar case, though relating to a Municipal Corporation, a public notice has been held to be sufficient service. It is prayed that the impugned order may be set side and the matter may be remitted to the Tribunal, to decide the appeal on merits.
We have heard counsel for the parties, perused the impugned order.
Section 29 (3) of the Act empowers the Commissioner, on his own motion or on the basis of information received, to direct the designated officer to make an assessment of the amount of tax payable by any person for such period as he may specify in his order. Sub-section (4) of Section 29 of the Act provides that an assessment under sub-section (3) may be made within three years after the date when the annual statement was filed or due to be filed, whichever is later. The proviso to sub-section (4) of section 29 of the Act, however, provides that where circumstances so permit the Commissioner may, by an order in writing, allow assessment of a taxable person after three years, but not later than six years from the date, when annual statement was filed or due to be filed by such person, whichever is later. While considering the nature of this power, a Division Bench of this Court held in A.B Sugars Limited v. State of Punjab, 2010 29 VST 538 (P&H), that this power can not be invoked without affording an opportunity of hearing to the dealer. The State of Punjab proposed to extend the period of assessment beyond the period of three years and, therefore, decided to afford an opportunity of hearing to assessees likely to be adversely affected. A notice was uploaded, on its website to inform assessees, likely to be affected of its intention to invoke the extended period of three years. Admittedly no individual notice was ever served upon the assessees, before the order extending the period of limitation was passed. rule 86 of the 2005 Rules, provides for the mode and manner of serving notices in the following terms:-
“(a) by delivery by hand or through courier, of a copy of the notice to the addressee or to any other agent, duly authorised in this behalf by him or to a person, regularly employed by him in connection with the business in respect of which he is registered as a person or to any adult male member of his family residing with the person; or
(b) by registered post;
(c) by e-mail.
Rule 86 of the Rules does not envisage service of a general notice or by publication on the website, of the department. At this stage, it would be appropriate to reproduce a few relevant paragraphs from the order passed by the Tribunal:-
“Admittedly, only Rule 86 of the Punjab Value Added Tax Rules, 2005 provide the mode of service of notice and there is no other provision either in the Punjab Value Added Tax Act, 2005 or the Rules framed thereunder. As per the extension order dated 15.11.2010 passed by the Ld. etc. as available in the extension file, the public notice was issued on 22.10.2010 for extending the time limit by two years for framing of assessment U/s 29(4) of the Act, 2005 for the assessment year 2006-07. The list of assessment cases in which the time limit was to be extended was put on the website of the Department for inviting the objections from the dealers/taxable persons to be effected by such extension order. It is not within the contemplation of Rule 86 ibid to invite objections from the dealers/taxable persons by putting the list of such persons on the website of the Excise and Taxation Department. Such mode of service being not there in Rule 86 ibid, it is very difficult to say that the service of notice in the stated manner is in tune with the provisions of this Rule. The notice having not been got served in a manner as provided by law, it is not possible to say that the persons to be affected by extension order were afforded an opportunity of being heard.”
XX XX XX XX
Adverting to instant case, there is nothing on the record to show that the persons to be affected by the extension order dated 15.11.2010 were associated in the time limit extension proceedings before the extension was granted or that the extension order was individually communicated to the persons who were to be affected by it…..”
XX XX XX XX
In the case at hand, the assessment year being 2006-07, the last return was due to be filed by 20.11.2007 The limitation prescribed for framing assessment U/s 29(4) of the Act, 2005 being three years, the assessment could have been framed by 20.11.2010 unless the time limit was extended in a manner as enunciated in A.B Sugars Ltd. (Supra). The extension order dated 15.11.2010 being not in adherence to the spirit of A.B Sugars Ltd. (supra) cannot be deemed to be valid and legal. Sequelly, such extension cannot be taken note of. If it is so, there can be no escape from the finding that the assessment order dated 30.11.2011 being barred limitation is without jurisdiction and cannot be legally enforced. The record is quite barren to show, if there was any legal impediment in passing the assessment order within the limitation period as prescribed under law. The assessment proceedings had not been stayed by any court or competent authority…..”
A perusal of the opinion recorded by the Tribunal reveals that after referring to Rule 86 of the Rules, it has been held that failure of the department to serve individual notices in an incurable defect, that renders assessment orders null and void.
The judgment in Rai Vimal Krishna's case (supra) does not advance the appellant's case in any manner as Section 149 of the Municipal Corporation Act, 1952, empowered publication of an assessment list by beat of drum and by play cards posted at conspicuous places etc., throughout Patna. It was, therefore, held that the public notice, in accordance with the procedure prescribed by Section 149 of the Act, was sufficient notice to the public at large, including the assessee. The situation, in the present case, is entirely different as neither rule 86 of the 2005 Rules nor any other provision of the statute permits publication of a notice, much less, a general notice on the website of the department.
We find no error of jurisdiction or of law in the impugned order. The service of an individual notice is a sine qua non for invoking power and the admitted absence of any such individual notice, renders the assessment orders, illegal and void.
In view of what has been stated hereinabove, we find no merit in the appeal and dismiss the same in limine.