1967 (8) TMI 109 - HC - VAT and Sales Tax

Summary

Issues: Validity of assessment of escaped turnover under repealed Act. Interpretation of Section 4 of the Interpretation and General Clauses Act, 1125. Applicability of Section 61 of the Kerala General Sales Tax Act, 1963.

In this case, the petitioner challenged the assessment of the turnover that had escaped assessment under the General Sales Tax Act, 1125, which was later replaced by the Kerala General Sales Tax Act, 1963. The petitioner contended that the notice issued for the assessment after the repeal of the old Act was invalid. The department relied on Section 4 of the Interpretation and General Clauses Act, 1125, which preserved the liability to be assessed even after the repeal. The court analyzed the provisions of both Acts and the Interpretation Act to determine the validity of the assessment.

The court examined Section 4 of the Interpretation and General Clauses Act, 1125, which states that the repeal of an Act does not affect any right, privilege, obligation, or liability acquired under the repealed Act. The court held that the liability for the escaped turnover, which arose before the repeal, could be enforced under the new Act as if the old Act had not been repealed. The court emphasized that the intention of the legislature was crucial in determining the applicability of Section 4.

The court then considered Section 61 of the Kerala General Sales Tax Act, 1963, which dealt with the repeal of the old Act. The proviso under Section 61 preserved rights, obligations, and liabilities acquired under the old Act. The court concluded that the repeal did not affect the department's right to assess the escaped turnover that existed before the new Act came into force. The court found no indication of a "different intention" in Section 61 that would override the application of Section 4 of the Interpretation Act.

Regarding the timeline for assessment, the court noted that the assessment of the escaped turnover was done within the three-year limitation period specified in the General Sales Tax Rules, 1950. The court held that the assessment was validly initiated and completed within the prescribed time frame, upholding the department's actions.

Lastly, the court addressed the contention of the petitioner regarding certain sales of medicine being exempt from taxation under a Government Order. The court had previously ruled that those sales did not qualify for the exemption, and the court maintained its stance, dismissing the petitioner's argument.

In conclusion, the court dismissed the Tax Revision Case, upholding the validity of the assessment of the escaped turnover under the repealed Act and affirming the applicability of Section 4 of the Interpretation Act and Section 61 of the Kerala General Sales Tax Act, 1963.