1965 (9) TMI 44 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction of the Assessing Authority to pass the assessment order beyond the statutory period.
2. Retrospective application of the amendment to Section 11(5) of the Punjab General Sales Tax Act, 1948.

Detailed Analysis:

1. Jurisdiction of the Assessing Authority to Pass the Assessment Order Beyond the Statutory Period:
The petitioner, a registered dealer under the Punjab General Sales Tax Act, 1948, did not file any quarterly returns for the financial year 1959-60. The Excise and Taxation Officer (respondent No. 1) passed an assessment order on 22nd March, 1963, based on the best judgment assessment for the said period. The petitioner challenged this order on the grounds that it was beyond the statutory jurisdiction of the Assessing Authority as per Section 11(5) of the Act, which mandates that the assessment must be completed within three years after the expiry of the relevant period.

The Court noted that the Supreme Court in Madan Lal Arora v. Excise and Taxation Officer, Amritsar had held that the three-year period for making a best judgment assessment starts from the end of each quarter for which returns were due. The Court further observed that the Full Bench judgment in Firm Jagat Ram Om Parkash v. The Excise and Taxation Officer clarified that the Assessing Authority must take definite steps within the three-year period to proceed with the best judgment assessment.

In this case, the Assessing Authority issued a memorandum on 13th November, 1961, and reiterated the intention to frame a best judgment assessment on 14th December, 1961. However, there was no evidence to show that these steps were sufficient to constitute proceeding with the assessment within the statutory period. The Court concluded that the Assessing Authority did not take any definite steps within the three-year period, rendering the assessment order dated 22nd March, 1963, beyond jurisdiction for the first three quarters of 1959-60.

2. Retrospective Application of the Amendment to Section 11(5):
The State contended that even if the assessment was not initiated within three years, the amendment to Section 11(5) by the Punjab General Sales Tax (Amendment) Act, 1963, which extended the period to four years, should apply. The Court rejected this argument, stating that the amendment, effective from 23rd March, 1963, was prospective and did not have retrospective effect. The Court held that any assessments barred by time before the amendment could not be revived by the new law.

The Court referred to the authoritative ruling in The Punjab Commerce Bank Ltd. v. Shri Brij Lal Mahandiratta, which held that amendments extending limitation periods do not apply retrospectively unless explicitly stated. Consequently, the amendment did not extend the period for assessments of quarters for which the three-year period had already expired before 10th January, 1963.

Conclusion:
The Court granted the writ petition, setting aside the impugned assessment order for the first three quarters of the financial year 1959-60. The Court held that:
1. The Assessing Authority did not take any definite steps within the three-year period to proceed with the best judgment assessment.
2. The amendment to Section 11(5) did not have retrospective effect and could not revive assessments barred by the original three-year limitation.

Petition allowed.