1957 (9) TMI 37 - HC - VAT and Sales Tax

Issues Involved:
1. Whether the application for reference to the Tribunal was barred by limitation.
2. Determination of the starting point for the period of limitation for making an application for a statement of a case to the High Court.
3. Applicability of the Bombay Sales Tax Act, 1953, or the repealed Bombay Sales Tax Act, 1946, to the period of limitation.
4. Continuation of legal proceedings under the repealed Act and their disposal under the new Act.

Detailed Analysis:

Issue 1: Whether the application for reference to the Tribunal was barred by limitation.

The State of Bombay raised a preliminary objection that the application for reference made to the Tribunal on 11th August, 1956, was barred by limitation. The Court needed to determine whether the period of limitation began from the date the order was passed by the Tribunal or from the date the order was communicated to the assessee.

Issue 2: Determination of the starting point for the period of limitation for making an application for a statement of a case to the High Court.

The Court examined whether the period of limitation started from the date the order was passed by the Tribunal or from the date the party aggrieved had knowledge of the order. The language in section 34 of the Act of 1953 indicated that the period begins to run from the date of the order. However, Mr. Palkhivala for the assessee argued that there was an obligation on the Tribunal to communicate the order, and thus, the period of limitation should start from the date the order was communicated to the party aggrieved. The Court referred to rule 42 of the Bombay Sales Tax (Procedure) Rules, 1954, which required the Tribunal to supply a copy of the order to the parties. The Court concluded that time for presenting an application for a reference to the High Court does not begin to run until the copy is supplied to the party aggrieved.

Issue 3: Applicability of the Bombay Sales Tax Act, 1953, or the repealed Bombay Sales Tax Act, 1946, to the period of limitation.

The Court had to decide whether the period of limitation was governed by section 32 of the Bombay Sales Tax Act, 1953 (ninety days), or by section 23 of the repealed Act of 1946 (sixty days). The general principle is that procedural laws are presumed to be retrospective unless there is an intention to the contrary. Section 48, sub-section (2), of the Act of 1953 indicated that legal proceedings pending on 1st November, 1952, would be continued and disposed of as if the Act of 1953 had not been passed. The Court interpreted that "legal proceeding" included assessment proceedings and that the proceedings were pending on 1st November, 1952, because notices initiating the proceedings had been served on 28th October, 1952.

Issue 4: Continuation of legal proceedings under the repealed Act and their disposal under the new Act.

The Court determined that the assessment proceedings did not terminate with the decision of the Tribunal but continued even when an application was made for a reference to the High Court. The proceedings could only terminate when the rights of the assessee and the taxing authorities were finally and irrevocably determined. The Court concluded that an application for a reference to the High Court was a continuation of the pending legal proceeding. Therefore, by virtue of section 48, sub-section (2)(ii), the proceedings must be disposed of under the Act of 1946, ignoring the provisions of the Act of 1953. Consequently, the applicants were governed by the sixty days' period allowed under section 23 of the Act of 1946, making the reference application beyond time.

Conclusion:
The Court held that the application to the Tribunal was barred by limitation, as it was filed beyond the sixty days' period prescribed by the Act of 1946. As a result, the present application to the High Court was also barred by limitation. The petition was dismissed with costs.

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