1971 (10) TMI 93 - HC - VAT and Sales Tax

Summary

Issues Involved:

1. Limitation period for making an assessment under the Punjab General Sales Tax Act.
2. Applicability of the Full Bench decision in Om Prakash Seth's case.
3. Relevance of the Supreme Court decision in Firm Jagmohandas Vijay Kumar's case.
4. Nature of proceedings following a remand order and whether they constitute fresh proceedings or continuation of original proceedings.

Detailed Analysis:

1. Limitation Period for Making an Assessment:

The petitioner-firm argued that the limitation period for making an assessment under sub-sections (4), (5), and (6) of section 11 and section 11-A of the Punjab General Sales Tax Act was initially three years, extended to four years by Punjab Act 2 of 1963, and further to five years by Punjab Act 28 of 1965. The assessment for the year 1961-62 became barred by time on 31st March, 1966, and any subsequent notice, such as the one issued on 28th April, 1967, was beyond the permissible period. The court agreed, relying on the Full Bench decision in Om Prakash Seth's case, which held that reassessment proceedings are fresh proceedings governed by the prescribed period of limitation.

2. Applicability of the Full Bench Decision in Om Prakash Seth's Case:

The Full Bench in Om Prakash Seth's case ruled that reassessment proceedings following a remand are fresh proceedings subject to the limitation period in section 11-A of the Act. The court in the present case initially quashed the reassessment proceedings based on this precedent, as the notice for reassessment was issued beyond the limitation period.

3. Relevance of the Supreme Court Decision in Firm Jagmohandas Vijay Kumar's Case:

The appellate court found that the facts of Firm Jagmohandas Vijay Kumar's case were distinguishable from those in Om Prakash Seth's case. In Firm Jagmohandas Vijay Kumar's case, the Supreme Court held that reassessment proceedings following a remand do not constitute fresh proceedings but a continuation of the original proceedings, thus not subject to the limitation period for escaped assessments. The appellate court determined that the present case was more akin to Firm Jagmohandas Vijay Kumar's case, where the remand did not initiate fresh proceedings but continued the original assessment.

4. Nature of Proceedings Following a Remand Order:

The appellate court concluded that the proceedings following the remand were not for escaped assessment but a continuation of the original assessment initiated with the return filed by the respondent-firm. The remand was to determine the liability for the purchase tax, not to reassess escaped income. Thus, the limitation period prescribed in section 11-A did not apply. The court referenced the Supreme Court's ruling in Firm Jagmohandas Vijay Kumar's case, which stated that proceedings remain pending until a final order of assessment is made, and no fresh limitation period applies after a remand.

Conclusion:

The appellate court allowed the appeal, overturning the learned Single Judge's order that quashed the reassessment proceedings. The court held that the proceedings were a continuation of the original assessment and not subject to the limitation period for fresh assessments under section 11-A. The respondent's writ petition was dismissed with costs, aligning the decision with the Supreme Court's ruling in Firm Jagmohandas Vijay Kumar's case.