M/s. Vijaya Bhaskar Constructions V. The Commercial Tax Officer,

WP/3802/2021

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The case involves M/s. Vijaya Bhaskar Constructions, a petitioner registered under the Andhra Pradesh Value Added Tax Act, 2005, who challenged an assessment order passed by the 2nd respondent, the Commercial Tax Officer. The assessment was based on discrepancies between the turnovers reported in the petitioner's VAT returns and their Income Tax returns for the years 2013-2014 and 2014-2015. The petitioner argued that the assessment was erroneous as it did not consider their opt-in for a composition scheme and incorrectly applied a higher tax rate. The court found that the assessment for part of the tax period was barred by limitation and remanded the case for re-assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 725813 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 16-04-2025
• Assessment Year: misc
• Laws Referred To: Andhra Pradesh Value Added Tax Act, 2005
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: GP FOR COMMERCIAL TAX; GP FOR COMMERCIAL TAX; ADDL ADVOCATE GENERAL
• Assessee Lawyers: K REDDY
• Keywords: Assessment Order; Composition scheme; Limitation; Value Added Tax; Turnover Suppression
• Section: 21(5); 21(5); 21(4); 2(36)

Judgement Text

"APHC010063782021 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3525] WEDNESDAY, THE SIXTEENTH DAY OF APRIL TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO THE HONOURABLE DR JUSTICE K MANMADHA RAO WRIT PETITION NO: 3802/2021 Between: M/s. Vijaya Bhaskar Constructions ...PETITIONER AND The Commercial Tax Officer and Others ...RESPONDENT(S) Counsel for the Petitioner: 1. K RAJI REDDY Counsel for the Respondent(S): 1. GP FOR COMMERCIAL TAX 2. GP FOR COMMERCIAL TAX 3. ADDL ADVOCATE GENERAL The Court made the following Order: (per Hon’ble Sri Justice R. Raghunandan Rao) The petitioner which is involved in the business of interior decoration was registered under the Andhra Pradesh Value Added Tax Act, 2005 [for short “the APVAT Act”], with the 1st respondent. 2. The 2nd respondent, had initiated proceedings, against the petitioner, under Section 21(5) of the APVAT Act, on the ground that there 2 was a huge discrepancy between the turnovers disclosed in the monthly return, as opposed to the turnovers disclosed in the Income Tax returns. 3. The 2nd respondent, on this ground, passed an assessment order, dated 17.08.2020, for the tax period 2013-2014 and 2014-2015. 4. Aggrieved by the said assessment order, dated 17.08.2020, the petitioner has approached this Court by way of the present Writ Petition. 5. Sri K. Raji Reddy, learned counsel for the petitioner would contend that the said order requires to be set aside for the following grounds:- I. The petitioner had opted for a composition scheme and had filed Form-250 for giving his option for paying tax under the composition scheme. However, this aspect was not taken into account and the 2nd respondent had charged the turnover of the petitioner at rate of 14.5% instead of 5%. II. The 2nd respondent could not have invoked the provisions of Section 21(5) of the APVAT Act, as there is no mention of any suppression of turnover which is the jurisdictional fact required for invoking Section 21(5) of the APVAT Act. III. The 2nd respondent had committed a fundamental error in making a comparison between the Income Tax returns of the petitioner and the APVAT returns of the petitioner. The Income Tax returns of the petitioner contained the turnovers of the petitioner in relation to the business done, in Andhra Pradesh as well as other States while the turnovers reflected in the APVAT returns related 3 only to turnovers of the petitioner in the State of Andhra Pradesh. In such circumstances, the entire order would have to be set aside. IV. The order of assessment is beyond limitation in as much as Section 21(4) of the APVAT Act prescribes a limitation of four years from the date on which the return, for the relevant period, has been filed. Even if Section 21(5) of the APVAT Act is to be applied the limitation would be six years and the assessment for a major part of the tax period would be barred by limitation and would have to be set aside. 6. The 2nd respondent has filed a counter affidavit, in which the 2nd respondent has denied a receipt of any application for composition and Form- 250. The 2nd respondent would also contend that there is a clear case of suppression of turnover as can be seen from the difference in the turnover between the returns filed under the Income Tax Act and the returns filed under the APVAT Act. The 2nd respondent also took the stand that the question of limitation would arise only upon proper returns been filed and filing of improper returns would not initiate the period of limitation. 7. A perusal of the order under assessment would show that the assessing authority had made a specific observation that there is suppression of turnover on the ground of variation between the Income Tax returns and the State returns. The contention of the petitioner that the turnovers in the Income Tax returns relates to the business outside Andhra Pradesh also, was not 4 raised before the assessing authority in as much as no representation had been made to the assessing authority. In such circumstances, it would be difficult for this Court to go into this issue, in its Writ jurisdiction. The same could only have been considered by the 2nd respondent-assessing authority. 8. However, the fact was remain that the period of limitation, for passing an assessment order under Section 21(5) of the APVAT Act, is six years from the date on which the return for the relevant tax period had been filed. In the present, the assessment order came to be passed, on 17.08.2020. 9. Under Section 2(36) of the APVAT Act, defines tax period as the calendar month. Rule-23 of the Andhra Pradesh Value Added Tax Rules, 2005, stipulates that the return for the calendar month would have to be filed by 20th day of the succeeding month. In such circumstances, the monthly returns which would be within limitation would be six years prior to 17.06.2020 which would be 17.06.2014. In such circumstances, the assessment for the period 2013-2014 is completely barred by limitation and the assessment for the period April-2014 to June-2014 would also be barred by limitation. 10. In such circumstances, the assessment order for the period 01.04.2013 till 01.07.2014 is set aside on the ground of limitation. In view of the fact that a part of the assessment order has been set aside, it would be necessary to set aside the remainder of the assessment order and remand the matter back to the assessing authority to take an appropriate decision after due notice and opportunity to the petitioner. 5 11. In the circumstances, this Writ Petition is partly allowed setting aside the assessment order dated 17.08.2020 to the extent for the period April-2013 to June-2014 and remanding the assessment back to the assessing officer for passing fresh order after giving adequate notice and opportunity to the petitioner. There shall be no order as to costs. As a sequel, pending miscellaneous petitions, if any, shall stand closed. _______________________ R. RAGHUNANDAN RAO, J. ________________________ DR. K. MANMADHA RAO, J. BSM 6 HONOURABLE SRI JUSTICE R. RAGHUNANDAN RAO AND THE HONOURABLE DR. JUSTICE K. MANMADHA RAO WRIT PETITION No.3802 of 2021 (per Hon’ble Sri Justice R. Raghunandan Rao) Date: 16.04.2025 BSM "