Law: Sales Tax Act, 1990

Section: 11,11(2),11(3),11(5)

SALES TAX ACT, 1990 (VII OF 1990) Section 11 There are clear cut provisions as embodied in Section 11(5) that no order shall be made by an Officer of Inland Revenue unless a notice to show cause to the person in default is given within five years of the relevant date. The phrase “no order shall be made by an Officer of Inland Revenue unless a notice to show cause notice is given within five years, of the relevant date” conveys the intention of the legislature that issuance of show cause notice, within five years, is a mandatory requirement for an action under Sections 11(2), 11(3) and the term ‘shall’ used in sub-section (5) of Section 11 makes the compliance of provision of law mandatory and there is no escape to it. Show cause notice for rejection of input tax refund has been issued and served upon the appellant beyond the period of five years as prescribed in sub-section (5) of Section 11, hence it is illegal and unlawful. Where an executive authority exercises its jurisdiction after the expiry of the period provided in a Statute, such exercise of jurisdiction, without any iota of doubt is illegal and unlawful. It is also well-settled law that when a period is provided by a special Statute, then any proceedings or actions taken under the provisions of special statute, has to be taken within the stipulated period. The show cause notice issued on 20-11-2020 is hopelessly barred by statuary time limitation as the same was issued after the prescribed time limit of five years under section 11(5) of the Act and once limitation had started to run and had come to an end, the taxpayer had acquired vested right of escapement of assessment by lapse of time. Where an executive authority exercises its jurisdiction after the expiry of the period provided in a Statute, such exercise of jurisdiction, without any iota of doubt is illegal and unlawful. When a period is provided by a special Statute, then any proceedings or actions taken under the provisions of special statute, has to be taken within the stipulated period. Once limitation had started to run and had come to an end, the taxpayer had acquired vested right of escapement of assessment by lapse of time. ORDER: MR.…

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