1969 (5) TMI 50 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Competency of the Excise and Taxation Commissioner under section 21(1) of the Punjab General Sales Tax Act, 1948, to reopen an assessment order after the expiry of the period prescribed in section 11-A of the Act.

Issue-Wise Detailed Analysis:

Competency of the Excise and Taxation Commissioner under Section 21(1) to Reopen an Assessment Order:
The primary issue in these cases is whether the Excise and Taxation Commissioner can reopen an assessment order under section 21(1) of the Punjab General Sales Tax Act, 1948, after the expiry of the period prescribed in section 11-A of the Act. The defense argued that the powers of the Commissioner under section 21(1) are not subject to the limitations of section 11-A.

Previous Judgments:
1. National Rayon Corporation Limited v. The Additional Assistant Excise and Taxation Commissioner, Punjab:
- The Division Bench held that the Legislature did not intend to limit the power of the Commissioner under section 21 by any rule of limitation, allowing the Commissioner to exercise his power at any time.

2. State of Orissa v. Debaki Debi and Others:
- The Supreme Court held that similar provisions of the Orissa Sales Tax Act were subject to a period of limitation, contradicting the Division Bench's view in National Rayon Corporation's case.

Reconsideration and Larger Bench Reference:
Given the conflicting judgments, the matter was referred to a larger Bench to reconsider the Division Bench decision and determine whether the jurisdiction of the Commissioner under section 21(1) is subject to the period of limitation prescribed in section 11-A of the Act.

Full Bench Judgment:
1. Narain Singh Mohinder Singh v. The State of Punjab and Another:
- The Division Bench concluded that section 11-A does not limit the revisional powers of the Commissioner under section 21(1). The Commissioner's role in revising orders is to ensure legality and propriety, not to reassess escaped turnover.

2. National Rayon Corporation Limited:
- Reaffirmed that the Legislature did not intend to limit the Commissioner's power under section 21 by any rule of limitation.

Supreme Court Decisions:
1. The State of Kerala v. K.M. Cheria Abdulla and Company:
- The Supreme Court defined the scope of revision under similar provisions, stating that the revising authority could make further inquiries to rectify defects but could not reassess escaped turnover, which is the function of the assessing authority under section 11-A.

2. The State of Orissa v. Debaki Debi and Others:
- The Supreme Court held that the proviso to sub-section (6) of section 12 of the Orissa Act, which prescribed a period of limitation, applied to all orders of assessment, including those by revisional authorities. However, the Punjab Act does not have a similar provision limiting the Commissioner's revisional powers.

3. The Swastik Oil Mills Ltd. v. H. B. Munshi:
- The Supreme Court supported the view that revisional powers are not subject to the period of limitation prescribed for reassessment of escaped turnover, as long as the revising authority does not encroach upon the jurisdiction of the assessing authorities.

Conclusion:
The Full Bench concluded that the jurisdiction of the Commissioner under section 21(1) of the Punjab General Sales Tax Act, 1948, is not subject to the period of limitation prescribed in section 11-A of the Act. The Commissioner can revise orders to ensure legality and propriety without being bound by the limitation period applicable to reassessment of escaped turnover.

Judgment:
The Full Bench answered the reference in the negative, holding that the Commissioner's jurisdiction under section 21(1) is not limited by section 11-A. The cases were remitted to a Single Judge for decision on merits in accordance with this interpretation.