1980 (4) TMI 283 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Limitation period for fresh assessment under Section 18(8) of the Madhya Pradesh General Sales Tax Act.
2. Effect of pending reference applications on the finality of assessment orders.
3. Validity of reassessment proceedings after the limitation period.

Detailed Analysis:

1. Limitation Period for Fresh Assessment under Section 18(8):

The core issue revolves around the interpretation of Section 18(8) of the Madhya Pradesh General Sales Tax Act, particularly the proviso which stipulates that fresh assessments must be made within three calendar years from the date of the order containing any finding or direction. The petitioner argued that since no fresh assessment orders were passed within three years from the Tribunal's order dated 28th December 1972, the assessment proceedings became barred by limitation.

2. Effect of Pending Reference Applications on the Finality of Assessment Orders:

The judgment clarifies that the appeal cannot be considered finally disposed of when a reference application is pending. Section 44 of the Act, similar to Section 66 of the Income Tax Act, 1922, outlines the procedure for referring questions of law to the High Court. The High Court's judgment on such references is advisory, and the Tribunal must dispose of the case in accordance with the High Court's opinion. The judgment emphasizes that the appeal remains open and the order does not attain finality until the Tribunal reconsiders and decides the appeal based on the High Court's opinion.

3. Validity of Reassessment Proceedings After the Limitation Period:

The judgment interprets the phrase "within a period of three calendar years from the date of order containing such finding or direction" to mean the date when the order attains finality. This finality is achieved only after the High Court decides the reference and the Tribunal reconsiders the appeal in light of the High Court's opinion. Thus, even if the Tribunal has not made a reference yet due to the petitioner's request to withhold, the limitation period for reassessment does not commence until the reference application is finally disposed of.

Conclusion:

The petitions were dismissed on the grounds that the limitation period for fresh assessment under Section 18(8) starts from the date the order attains finality, which is after the High Court's decision on the reference and the Tribunal's subsequent reconsideration. The pending reference applications thus prevent the assessment orders from becoming final, and the reassessment proceedings are not barred by limitation. The security amount in each case was ordered to be refunded to the petitioner, but no costs were awarded.