1980 (12) TMI 174 - HC - VAT and Sales Tax

Summary

Issues Involved:

1. Validity and application of the Andhra Pradesh General Sales Tax (Amendment) Act (Act 9 of 1970).
2. Whether fresh assessments are required after the Validation Act.
3. The impact of retrospective amendments and validation on previous assessments.
4. The role of limitation periods in the context of validated assessments.
5. The recovery of refunded taxes after validation.

Detailed Analysis:

1. Validity and Application of the Andhra Pradesh General Sales Tax (Amendment) Act (Act 9 of 1970):
The primary issue was whether the assessments in dispute could be considered subsisting by virtue of the Andhra Pradesh General Sales Tax (Amendment) Act (Act 9 of 1970). The Act amended sections 5 and 11 of the principal Act, making both resident ryot principals and commission agents liable to tax irrespective of their turnovers. The amendment was given retrospective effect to cover past assessments and validate them, thereby removing the defects pointed out by previous court judgments.

2. Whether Fresh Assessments are Required After the Validation Act:
The court held that fresh assessments were not required. The Amendment Act (Act 9 of 1970) not only amended the defective provisions but also validated all past assessments retrospectively. The court clarified that the assessments made under the previous Act would be deemed to be made under the amended Act. This validation rendered the earlier assessments effective and enforceable without the need for fresh assessments.

3. The Impact of Retrospective Amendments and Validation on Previous Assessments:
The court emphasized that a competent legislature could enact a valid law retrospectively and validate actions taken under the invalidated law. The Andhra Pradesh General Sales Tax (Amendment) Act (Act 9 of 1970) did exactly this by retrospectively amending the relevant provisions and validating past assessments. The court cited the Supreme Court's decision in Shri Prithvi Cotton Mills v. Broach Municipality, which supported the principle that the legislature could remove the basis of a court's decision by retrospective amendments and validate past actions.

4. The Role of Limitation Periods in the Context of Validated Assessments:
The court rejected the contention that the limitation period under section 14 of the Act would bar the assessments. It was held that the validation of assessments by the Amendment Act meant that the assessments continued to subsist and could be enforced without being subject to the limitation period. The court noted that no special machinery or extended period of limitation was required for the validated assessments.

5. The Recovery of Refunded Taxes After Validation:
The court addressed the issue of whether taxes that had been refunded prior to the enactment of the Validation Act could be recovered. It held that the validation of the assessments revived the liability to pay the tax, and the refund did not extinguish this liability. The court stated that the orders issued to recover the refunded taxes were merely reminders of the tax due under the validated assessment orders and did not constitute new assessments.

Conclusion:
The court concluded that the assessments in dispute subsisted by virtue of the provisions of the Andhra Pradesh General Sales Tax (Amendment) Act (Act 9 of 1970). It held that no fresh assessments were required, and the validated assessments could be enforced. The court allowed the tax revision cases and rejected the contention that the assessments were barred by limitation. The court also held that the refunded taxes could be recovered, and the orders to recover them were valid.