1959 (7) TMI 53 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Legality of notices issued under the Bombay Sales Tax Act, 1953, for assessments made under the Bombay Sales Tax Act, 1946.
2. Validity of notices issued after an extended period and whether they are barred by limitation.

Issue-wise Detailed Analysis:

1. Legality of Notices Issued under the Bombay Sales Tax Act, 1953:
The assessees contended that the notices to revise the assessment were issued under the provisions of the Bombay Sales Tax Act, 1953, while the original assessments were made under the Bombay Sales Tax Act, 1946. The court observed that the mere heading or the use of the form prescribed for issuing a notice under section 31 of the Sales Tax Act, 1953, does not alter the true character of the notices. The Assistant Collector of Sales Tax had the authority under the Act of 1946 to issue notices of the nature of the impugned notices. The repeal of the 1946 Act by the 1953 Act did not affect the obligation to pay taxes incurred under the 1946 Act. Section 48(2) of the 1953 Act explicitly provided that taxes payable under the 1946 Act were to be assessed, imposed, and recovered in accordance with the provisions of the 1953 Act. Therefore, the Assistant Collector had the authority to issue the notices and conduct the proceedings for re-assessment under the 1953 Act.

2. Validity of Notices Issued After an Extended Period:
The assessees argued that the notices for revision of assessment were issued more than eight years after the expiry of the assessment period, thus barred by limitation under section 15 of the 1953 Act and section 14 of the 1946 Act. The court reviewed the provisions of both Acts and noted that while the 1946 Act did not prescribe a period for issuing a notice under section 11, re-assessment under section 11A had to be made within a prescribed period. Similarly, the 1953 Act also prescribed periods for assessment and re-assessment.

The court referred to previous judgments, such as Commissioner of Income-tax v. Narsee Nagsee & Co. and Bisesar House v. State of Bombay, which held that even if no period was expressly prescribed for issuing a notice, it must be issued within a reasonable period, typically the period prescribed for re-assessment. However, the court noted that the Legislature had amended the 1953 Act by Act XXII of 1959, inserting sub-section (2) to section 15, which explicitly stated that nothing in sub-section (1) shall apply to any proceeding under section 14 or 31, and the validity of such proceedings or notices cannot be questioned merely on the ground of inconsistency with sub-section (1). This amendment provided the widest retrospective operation, even overriding previous judgments, decrees, or orders of Courts or Tribunals.

The court concluded that the rule of interpretation that revisional jurisdiction must be exercised within a reasonable period had been expressly superseded by the amendment. Therefore, the notices issued by the Assistant Collector of Sales Tax were valid, and the petitioners had no grounds for the issuance of a writ.

Conclusion:
The petition was dismissed, and no order as to costs was made. The court held that the notices issued under the 1953 Act for assessments originally made under the 1946 Act were valid, and the amendment by Act XXII of 1959 superseded the rule requiring revisional jurisdiction to be exercised within a reasonable period.