VALIDITY OF ASSTT. NOTICES UNDER PVAT ACT RECENTLY ISSUED

The VAT Department in Punjab has started issuing the notices for assessements for the year 2005-2006 under section 29 of Punjab Value Added Tax Act 2005 to the dealers across the state. The notices u/s 29 of PVAT Act 2005 can be issued within 3 years from the last date for filling of Annual statement i.e VAT 20 of the year concerned or the date on which the return is actually filled whichever is later.

The last date for filling of VAT 20 Annual Statement under PVAT Act is 20th November every year. The last date for filling of VAT 20 for the year 2005-2006 was 20th november 2006. Hence the limitation period for assessement of the cases for the year 2005-2006 under PVAT Act 2005 has come to an end on 20th november 2009.

Evan though the assessement of cases for the year 2005-2006 under PVAT Act has become time barred, the notices are still being issued to the dealers across the state by the department.

The notice for assessement u/s 29(3) of PVAT Act can be issued after the period of limitation as stated u/s 29 (4) if the extension is granted by the Commissioner as per proviso to section 29(4) which runs as under:

'Provided that where circumstances so warrant, the Commissioner may, by an order in writing, allow assessment of a taxable person or of a registered 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.'

There is news that the combined requisite approval of the commissioner has been taken by the department for assessement of year 2005-2006. As is clear from the wording of the abovestated proviso to section 29(4) if the circumstances so warrant the commissioner can allow assessement of an assessee evan after the period of 3 years. But that order has to be in writting and that order should be seperate for each assessee concerned, since the word mentioned in the proviso is a taxable person or a registered person and not taxable persons or registered persons. Therefore one order issued for all the assessees doesnot seem to be correct.

Hence there should be seperate order for each assessee concerned but no seperate order seem to have been taken. If a combined order as per proviso to section 29(4) has been issued for extension of the assessement of year 2005-2006 for all the assessees concerned It may render notices issued for 2005-2006 as illegal and invalid and is a cause of concern for the public at large. If any assessement order made in consequense of the abovesaid notices issued without seperate written order of the commissioner for each assessee comes before the appealete authority it is likely to be quashed for the want of legality and will result in litigation.