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2019 (5) TMI 1178 - HC - VAT and Sales TaxTime Limitation - ignoring limitation of five years available u/s 28 of the HGST Act, 1973 for the purpose of proceeding with the assessment - Haryana VAT Act - delay in filing the appeals ranging from 58 days to 436 days for which no satisfactory explanation has been given by the learned counsel for the appellant-revenue - whether the assessment orders passed by the assessing authority on 26.3.2009, for the assessment years 1999-2000 to 2002-03, were barred by limitation or not? - applicability of limitation prescribed under HVAT Act in order passed under HGST Act. HELD THAT - It is well settled that the law of limitation is a procedural law and operates retrospectively unless it has been provided differently in the amending statute. In other words, unless there is a contrary intention manifested by express or necessary implication of the legislation itself, procedural law is generally retrospective. Procedural law relating to limitation is not a substantive right and its object is not to create any right but to prescribe periods within which legal proceedings be initiated or completed for enforcement of rights existing under substantive law. Statutes of limitation are thus retrospective in so far as they apply to all legal proceedings brought after their operation for enforcing cause of action accrued earlier. However, there is an exception to this rule - Where the right of action is barred under the law of limitation in force before the new provision came into operation and a vested right had accrued, the new provision cannot revive the time barred right or take away the accrued vested right. Identical issue came up for consideration before this Court in State of Punjab and others vs. Patiala Cooperative Sugar Mills Limited , 2015 (9) TMI 1327 - PUNJAB AND HARYANA HIGH COURT wherein it was held that in view of amendment of Section 11 of the Punjab General Sales Tax Act, 1948 by Ordinance of 1998 issued and effective from March 3, 1998 which was replaced by Punjab Act 12 of 1998 published on April 20, 1998 whereby limitation of three years for completion of assessment had been prescribed, no assessment order for assessment years upto 1997-98 could be passed after April 30, 2001. It was further held that the amended provisions prescribing limitation would operate retrospectively and would govern all assessments pending relating to periods before the amendment came into operation. There was no limitation prescribed u/s 11 of the 1948 Act for passing an assessment order before the amendment. Therefore, the period of three years prescribed for passing an assessment order would be counted for all those assessment years under the amended provision effective from March 3, 1998. In State of Punjab and others vs. The Doaba Cooperative Sugar Mills Limited, 2018 (9) TMI 809 - PUNJAB AND HARYANA HIGH COURT , the issue was whether the law laid down by this Court in Shubh Timb Steel Limited vs. The State of Punjab , 2010 (4) TMI 993 - PUNJAB AND HARYANA HIGH COURT holding that where no period was provided, the assessment order was to be passed within three years and in any event not beyond the period of five years, could be made applicable in the cases decided much before the pronouncement of the judgment. The effect of sub-section (1) of Section 61 of the HVAT Act is that substantive provisions of the HGST Act shall be treated to be in existence for the purposes of action which had been initiated there under and were pending on the commencement of HVAT Act. Under Section 61(2)(a) of HVAT Act, the pending application, appeal, revision and other proceedings made or preferred to any authority under HGST Act would stand transferred for disposal to the officer or authority who would have jurisdiction to entertain such application under the HVAT Act. The period of revision of five years provided under HGST Act for revision shall stand extended to eight years in certain eventualities. Further, HVAT Act would not affect the concluded actions or the assessments etc. In so far as assessment finalized for assessment years prior to coming into force of HVAT Act, the limitation under the HGST Act would be applicable. However, law of limitation being procedural law, amended or new provision of law under HVAT Act relating to limitation shall apply to the pending proceedings initiated under the HGST Act in respect of cases upto assessment year 2002-03 as well. The assessment proceedings in question were initiated under the HGST Act and therefore, after enactment of the HVAT Act which came into force w.e.f 01.04.2003, the limitation period prescribed u/s 15 thereof became applicable to the said assessment proceedings - the limitation period for the assessment in the present cases ended on 31.3.2006 whereas the impugned assessment orders were passed on 26.3.2009 i.e. long after the expiry of limitation. Thus, the Tribunal rightly held the assessment orders being barred by limitation and allowed the appeals filed by the assesses. In case of failure on the part of the assessee to file return or respond to a notice, the assessing authority may proceed to assess to the best of his judgment within five years after the expiry of such period which would mean initiation of proceedings. It was concluded that the proceedings have to be concluded with the passing of the order. It is not merely initiation of proceedings for revision. In these cases, the factual position being different, the same cannot be of any advantage to the learned counsel for the appellant-revenue. Appeal dismissed both on merits as well as on the ground of delay.
Issues Involved:
1. Limitation period for assessment under the HGST Act and HVAT Act. 2. Applicability of Section 61(2)(a) of the HVAT Act. 3. Tribunal's adoption of contradictory stands. 4. Tribunal's consideration of laws of limitation for assessment and revision. 5. Applicability of old law to cases under the repealed HGST Act. 6. Entitlement to relief on the ground of limitation. 7. Tribunal's failure to adjudicate on merits. 8. Delay in completion of assessments due to the respondent's tactics. Detailed Analysis: 1. Limitation Period for Assessment: The primary issue was whether the assessment orders for the years 1999-2000 to 2002-03, passed on 26.3.2009, were barred by limitation. The Tribunal held that the limitation period prescribed under the HVAT Act, being procedural law, applied retrospectively to pending assessments. Therefore, the assessments should have been completed by 31.3.2006, making the orders passed in 2009 time-barred. 2. Applicability of Section 61(2)(a) of the HVAT Act: Section 61(2)(a) of the HVAT Act specifies that all pending applications, appeals, revisions, or other proceedings under the HGST Act at the commencement of the HVAT Act shall be transferred to the corresponding authority under the HVAT Act. The Tribunal applied this provision, determining that the procedural law of limitation under the HVAT Act governed the pending assessments, thus making the assessment orders time-barred. 3. Tribunal's Adoption of Contradictory Stands: The appellant-revenue argued that the Tribunal adopted a contradictory stand compared to its earlier position in other cases. The Tribunal, however, consistently applied the procedural law of limitation under the HVAT Act to pending assessments from the HGST Act, maintaining that the new limitation period of three years applied retrospectively. 4. Tribunal's Consideration of Laws of Limitation: The Tribunal was criticized for adopting different lines of application of laws of limitation for assessment under Section 28 and revision under Section 40 of the HGST Act. The Tribunal clarified that procedural laws, including those related to limitation, are generally retrospective unless otherwise specified, and thus applied the HVAT Act's limitation period to pending assessments. 5. Applicability of Old Law to Cases Under the Repealed HGST Act: The appellant-revenue contended that the old HGST Act should govern the cases under the repealed law. The Tribunal, however, held that the procedural law of limitation under the HVAT Act, being retrospective, applied to pending assessments, thereby overriding the old HGST Act provisions. 6. Entitlement to Relief on the Ground of Limitation: The Tribunal justified the respondent's entitlement to relief on the ground of limitation, emphasizing that the assessments were time-barred under the HVAT Act's procedural law. The Tribunal found no merit in the appellant-revenue's argument that the respondent willfully avoided tax payment. 7. Tribunal's Failure to Adjudicate on Merits: The appellant-revenue argued that the Tribunal failed to adjudicate on the merits of the case. The Tribunal, however, focused on the procedural aspect of limitation, determining that the assessments were time-barred, and thus did not delve into the substantive merits. 8. Delay in Completion of Assessments: The appellant-revenue claimed that the delay in completing assessments was due to the respondent's tactics. The Tribunal found no evidence that the writ petition or any actions by the respondent impeded the assessment process, noting that the interim order only stayed the recovery of tax, not the assessment proceedings. Conclusion: The Tribunal's decision to set aside the assessment orders as time-barred was upheld. The appeals were dismissed on both merits and the ground of delay, with the Tribunal's application of the procedural law of limitation under the HVAT Act being deemed appropriate and consistent with established legal principles.
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