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In these batch of writ petitions, the petitioner/assessees impugn the pre-assessment notices/assessment orders issued to them to complete assessments of escaped turnover by invoking the provisions of Section 42(3) of the Kerala Value Added Tax Act [hereinafter referred to as the "KVAT Act"]. It is the common case in all these writ petitions that the period envisaged for re-opening assessments under Section 25 of the KVAT Act had expired by the time the notices for re-opening assessments, invoking Section 42(3) of the KVAT Act, were issued to them. The petitioners therefore contend that in such cases, the Revenue cannot invoke Section 42(3) of the KVAT Act to re-open assessments that have already become final under the KVAT Act.

filed by the assessee conforms to the requirement under the KVAT Act and Rules, in respect of the details of turnover to be furnished and the tax to be paid thereon, and there is no query raised by the Revenue within the period prescribed for the same, the assessment to tax is deemed completed as a self-assessment to tax by the assessee under Section 21 of the KVAT Act. If an assessee does not file a return as contemplated by the KVAT Act and Rules or files a defective return, then the assessment is completed on best judgment basis by the Revenue after following the procedure under Section 22 of the KVAT Act. In certain cases, as enumerated under Section 24 of the KVAT Act, an assessment can be completed pursuant to consideration of audit objections in relation to the details furnished by the assessee along with his returns. The assessments completed under Sections 21, 22 and 24 can still be re-opened in terms of 25 of the KVAT Act to assess such turnover as has escaped assessment to tax in an earlier assessment. The power to assess escaped turnover under Section 25 has, however, to be exercised within the period stipulated under the Act for the exercise of such power. The said period was five years from the end of the assessment year concerned till 31.3.2017, and was extended to six years from the end of the assessment year concerned thereafter.
➢ As per the Scheme of the KVAT Act, there is a finality attached to assessment proceedings and there are indicators under Sections 21, 22 24 and 25 of the KVAT Act as to when an assessment can be deemed final. Section 42(3), if interpreted as conferring a power on the Revenue to disregard the finality attaching to assessments, would militate against the Scheme of the KVAT Act. Such an interpretation is therefore to be avoided.
properly commenced without any restrictions as to time, reliance is placed on Regional Assistant Commissioner Indore v. Malva Vanaspathi & Chemical Company Ltd. - [AIR 1968 SC 894]; Bharat Steel Tubes Ltd. and Others v. State of Haryana and Others - [(1988) 70 STC 122]. ➢ The amendment to Section 42 inserting sub section (3) therein, has been given retrospective operation with effect from 01.04.2005. The said retrospectivity conferred by the legislature has the effect of removing the basis of the judgment rendered in the case of such assessees in the context of the limitation provisions under Section 25 of the KVAT Act. The said judgment only found that in the absence of a power, other than mentioned under Section 25 of the KVAT Act, the Revenue could not re-open an assessment after the expiry of the limitation period under Section 25 of the KVAT Act. The amendment removes the basis of the judgment by introducing a separate provision for assessing escaped turnover in respect of the particular class of assessees mentioned in Section 42 (1) of the KVAT Act. Reliance is placed on M.P. Sundararamier & Company v. State of Andra Pradesh - [1958 SCR 1422]; J.K. Jute Mills Company v. State of Uttar Pradesh - [AIR 1961 SC 1534]; Bahuji v. Municipal Committee, Khandwa - [AIR 1961 SC 1486]; M/s.Reghubar Dayal Jai Prakash v. Union of India - [AIR 1962 SC 263]; Cheviti Venkanna Yadav v. State of Telungana and Others - [(2017) 1 SCC 283]; State of Karnataka and others v. Karnataka Pawn Brokers Association and Others - [(2018) 6 SCC 363].