1957 (4) TMI 53 - HC - VAT and Sales Tax

Summary

Issues:
1. Assessment of sales tax on the assessee for the period from 1st July, 1947, to 31st March, 1948.
2. Application of section 13(6) of the Bihar Sales Tax Act, 1947, and its amendment by Bihar Act VI of 1949.
3. Validity of the assessment proceeding initiated by the Sales Tax Officer on 29th June, 1950, against the assessee.

Analysis:
The High Court of Patna addressed two cases involving the assessment of sales tax on the assessee for the period from 1st July, 1947, to 31st March, 1948, who dealt in timber and forest products. The Superintendent of Sales Tax initiated a proceeding against the assessee under section 13(5) of the Bihar Sales Tax Act due to failure to apply for registration. The Deputy Commissioner of Sales Tax rejected the assessee's objection that the proceeding was time-barred under section 13(6). The Board of Revenue allowed the revision petition stating that the proceeding was indeed barred under section 13(6) of Bihar Act XIX of 1947 and that the amendment by Bihar Act VI of 1949 did not apply. The State of Bihar raised questions regarding the limitation period for assessment proceedings under the Act, leading to references to the High Court (M.J.C. No. 369 of 1955 and M.J.C. No. 387 of 1955).

The central issue revolved around the applicability of Bihar Act VI of 1949, which extended the period of limitation for assessment proceedings under section 13(6) of the Act. The Board of Revenue contended that the amendment was not retrospective, and therefore, the new law could not be applied to the ongoing cases. However, the High Court disagreed, emphasizing that the law of limitations should be applied concerning the point when proceedings are initiated, not when the cause of action arose. The Court cited precedents, including the Privy Council's decision in Ramayya v. Lakshmayya, to support the view that the amended section should apply in the present case.

The Court further highlighted that the right of the authorities to initiate proceedings under the old law had not become time-barred when Bihar Act VI of 1949 came into effect. Therefore, the proceeding initiated against the assessee on 29th June, 1950, was governed by the amended provisions of section 13(6) of Bihar Act XIX of 1947. Consequently, the Court ruled in favor of the State of Bihar, stating that the assessment proceeding initiated against the assessee was legally valid and not barred by limitation. The Court ordered the assessee to pay the costs of the reference and a consolidated hearing fee.

In conclusion, the High Court's judgment clarified the application of the amended provisions of the Bihar Sales Tax Act, 1947, regarding the limitation period for assessment proceedings, emphasizing the importance of the timing of initiation of proceedings in determining the applicable law.