MVAT - ASSESSMENT, RECTIFICATION AND APPEALS

Assessment (Section 23)

1. Where a registered dealer fails to file return for any period: The Commissioner may assess the dealer in respect of that period to the best of his judgment without serving a notice for assessment and without affording an opportunity of being heard. Provided that, if after the assessment order is passed, the dealer submits the return for the period to which said order relates then, the order passed as aforesaid shall stand cancelled. Provided further that such cancellation shall be without prejudice to any interest or penalty that may be levied in respect of the said period. Time limit: 3 years from the end of the year containing the said period.

2. Regular Assessment : Where the return/s has/ have been filed by prescribed date by a registered dealer: Assessment after issue of notice in Form 301, opportunity of being heard and verification of books of account, etc. Time limit: 4 years from the end of the year containing the said period.
3. Regular Assessment : Where the return/s have not been filed by prescribed date by a registered dealer: Assessment after issue of notice in Form 301, opportunity of being heard and verification of books of account, etc. Time limit: 5 years from the end of the year containing the said period.

(3A) Time limit/s prescribed under sub-sections (2) and (3) extended to 7 years for all the periods up to 31st March 2008, and, for financial years 2005-06 & 2008-09 up to 30th June, 2013.

4. Assessment of unregistered dealers: Where the Commissioner has reason to believe that a dealer is liable to pay tax in respect of any period, but has failed to apply for registration or has failed to apply for registration within the time as required, the Commissioner may, after giving the dealer a reasonable opportunity of being heard, proceed to assess, to the best of his judgment, where necessary, the amount of tax, if any, due from the dealer in respect of that period, and any period or periods subsequent thereto. Time limit: 8 years from the end of the year containing the said period.
5. Transaction wise Assessment: During the course of any proceedings under the Act if the prescribed authority is satisfied that the tax has been evaded or sought to be evaded or the tax liability has not been disclosed correctly or excess set-off has been claimed by any dealer or person in respect of any period or periods by not recording or recording in an incorrect manner, any transaction of sale or purchase, or that any claim has been incorrectly made, then in such a case notwithstanding that any notice for assessment has been issued under other provisions of this section or any other section of this Act, the prescribed authority may, after giving such dealer or person a notice in the prescribed form (Form 302) and a reasonable opportunity of being heard, initiate assessment of the dealer or person in respect of such transaction or claim.

Provided that the assessment under sub-section (5) shall be made separately in respect of the transaction or claim relating to the said period or periods to the best of the judgment of the prescribed authority where necessary and irrespective of any assessment made under this sub-section, the dealer may be assessed separately under the other provisions of this section in respect of the said period or periods. Further provided that, once the dealer or person is assessed under this sub-section, no tax from such transaction or claim and penalty and interest, if any, consequent upon such tax shall be levied or demanded from such dealer or person, at the time of assessment to tax under the other provisions of this section in respect of the said period or periods relating to such transaction or claim.

This sub-section has been amended w.e.f. 1st April, 2015. The wordings during the course of any proceedings under the Act are now deleted. Thus the assessing authority can now issue notice in Form 302 for initiating assessment u/s 23(5) if it such authority has reason to believe that any dealer has evaded or has attempted to evade tax However, it would be necessary for such an assessing authority to record the reason on proceeding sheet before issuing notice in Form 302. Further a limitation period for passing such a transaction wise assessment order is now prescribed i.e. 6 years from the end of year to which such transaction relates. [Refer Trade Circular 6T of 2015 dated 14th May, 2015].

6. Sales/purchases escaping assessment: If the Commissioner is of the opinion that, in respect of any period covered by a return, any turnover of sales or of purchases has not been disclosed, or that tax has been paid at a lesser rate, set-off has been wrongly claimed, or deduction has been wrongly claimed, then notwithstanding any other provisions contained in this section, the Commissioner may serve a notice in the prescribed form (Form 315) on the dealer and proceed to assess him in respect of said period after giving a reasonable opportunity of being heard. Time limit: 6 years from the end of the year containing the said period.

7. Fresh Assessment: To give effect of any findings or directions contained in any order including orders made by Tribunal, High Court or Supreme Court. Time limit: 36 months from the date of communication of the order containing such finding or direction.

8. Assessment in certain cases where Department has preferred appeal against any order passed by the Tribunal

9. Commissioner may issue necessary directions for guidance of assessing authority in any case of pending assessment, on the basis of an application made by a dealer in this regard. (This provision is deleted w.e.f. 26th June, 2014).

10. A dealer or person may be assessed under a single notice and by a single order of assessment in respect of more than one period covered by a return so long as all such periods are comprised in one financial year. Further, due to amendment made to sub-section (10) of section 23, w.e.f. 26th June, 2014, it will now be possible for two different sales tax authorities to assess the same dealer for the same period in respect of those specific dealers who are required to file two different types of returns for the same period, commencing on or after 1st April, 2011.

11. Cancellation of Assessment Order in certain cases: Where a dealer has been assessed under sub-sections (2), (3) or (4) and he makes an application in the prescribed form (Form 316) to the Commissioner within thirty days of the date of service of the assessment order, for cancellation of the assessment order on the ground that he had not been able to attend or remain present before the assessing authority at the time of hearing when the assessment order had been passed, such an order may be cancelled and a fresh order shall be passed.

Application to cancel ex parte assessment order has to be disposed of by the concerned Sales Tax authority, by passing an order in writing, within a period of 3 months from the end of month in which application in Form 316 is received, failing which said ex parte assessment order shall be deemed to have been cancelled. [Amendment to section 23(11), applicable in respect of applications received on or after 26th June, 2014]

The facility of applying in Form 316 for cancellation of assessment order passed under sub-section (5) has also been permitted w.e.f, 1st April, 2015. [Amendment to sub-sections (11) & (12), refer Trade Circular 6T of 2015 dated 14th May, 2015]

12. A fresh order, in pursuance to cancellation of order under sub-section (11), to be passed within 18 months from the date of cancellation or the date of deemed cancellation, as the case may be, of such order.

Rectification of Mistakes (Section 24)

The Commissioner may, at any time within two years from the end of a financial year in which any order passed by him has been served, on his own motion, rectify any mistake apparent on the record, and shall within the said period or thereafter rectify any such mistake which has been brought to his notice within the said period (two years), by any person affected by such order.

A dealer seeking rectification shall file an application in Form 307 within two years from the end of financial year in which the said order has been served.

Provided that, no such rectification shall be made if it has the effect of enhancing the tax or reducing the amount of a refund or interest payable on refund, unless the Commissioner has given notice in writing in the prescribed form to such person of his intention to do so and has allowed such person a reasonable opportunity of being heard. An application for rectification shall not be rejected on the ground that there is no mistake apparent on record unless the person concerned has been given a reasonable opportunity of being heard.

In cases, where dues have arisen due to non-production of Declaration Forms, due to any reason, at the time of passing an order, such orders can also be rectified on being an application made by the dealer within the aforesaid period of two years from the end of financial year in which the said order was served. Provided that an appeal has not been preferred and only one such application can be entertained against such an order.

Appeals (Section 26)

Section 26 permits a dealer to prefer appeal against any order passed under MVAT Act, Rules and/or notifications (except as provided in section 85).

All such appeals have to be submitted, in the prescribed manner, in prescribed form (Form 310), after paying prescribed fees and within the permitted time limit of 60 days from the date of receipt of the order appealed against.

The First Appeal against an order passed by Sales Tax Officer or Assistant Commissioner of Sales Tax shall lie to the Deputy Commissioner of Sales Tax (Appeals).

The First Appeal against an order passed by a Deputy Commissioner or Sr. Deputy Commissioner of Sales Tax shall lie to the Joint Commissioner of Sales Tax (Appeals). The First Appeal against an order passed by a Joint Commissioner or Sr. Additional Commissioner or the Commissioner of Sales Tax shall lie to the Tribunal.

In the case of an order passed, in appeal, by a Deputy Commissioner or a Joint Commissioner of Sales Tax, the Second Appeal shall lie to the Tribunal.

A dealer seeking stay against the order, shall submit an application, in Form 311, for grant of stay by the Appellate Authority. The Appellate Authority, after examining the matter and circumstances may stay the order appealed against either in full or part with such conditions or restrictions as it may deem necessary including a direction for depositing of a part or whole of the disputed amount by the appellant.

Fees Payable

(a)	Where the quantum of relief sought is less than Rupees one lakh	Rs. 100/-
(b)	Where the quantum of relief sought is Rupees one lakh or more	1/10th per cent of the amount in dispute (subject to maximum Rs. 1,000/-)
(c)	In case of appeal not covered by (a) or (b)	Rs. 100/-
(d)	Application for grant of stay (Form 311):	Rs. 25/-

 

Note: Wherever the amount of fees payable is up to ₹ 100/- only, the same can be paid by affixing court fee stamps of same value. Otherwise all such fees so payable shall be paid into the Government Treasury in the same manner as taxes are being paid. (In challan Form No. 210/MTR-6 to be paid through authorised banks).