1983 (9) TMI 259 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Limitation period for reassessment under section 14(4) and section 14(4-A) of the Andhra Pradesh General Sales Tax Act, 1957.
2. Retrospective application of procedural laws.
3. Adequacy of the opportunity provided to the assessee for explanation.

Detailed Analysis:

1. Limitation Period for Reassessment:
The primary issue in this case revolves around the limitation period for reassessment under section 14(4) and section 14(4-A) of the Andhra Pradesh General Sales Tax Act, 1957. The assessing authority revised the assessment for the year 1972-73 on 23rd March, 1978, which was beyond the four-year limitation period prescribed by the unamended section 14(4). The assessee contended that the reassessment was barred by limitation as it was made after 31st March, 1977. The court agreed with the assessee, stating that the reassessment could not be done beyond the four-year period under the unamended provision. The amended section 14(4-A), which came into force on 17th January, 1978, could not be applied retrospectively to revive the right to reassess, which had already become barred under the old provision.

2. Retrospective Application of Procedural Laws:
The court examined whether the amended section 14(4-A), which prescribes a period of four years from the date of service of the order for reassessment, could be applied retrospectively. It was argued by the department that procedural laws, including those related to limitation, can be applied retrospectively. However, the court held that even if procedural laws could be applied retrospectively, they could not revive rights that had already been extinguished under the previous law. The court cited several precedents, including decisions from the Supreme Court and various High Courts, to support the principle that once the right to reassess is barred under the old provision, it cannot be revived by the amended provision.

3. Adequacy of Opportunity Provided:
The court also addressed the issue of whether the opportunity provided to the assessee to explain was adequate. The notice for reassessment was served on the assessee on 20th March, 1978, giving only three days to submit an explanation. The court found this period to be "appallingly inadequate" and not in line with the requirement of providing a reasonable opportunity under section 14(4). The court emphasized that a reasonable opportunity must be provided, and three days could hardly be considered reasonable in the circumstances of the case.

Conclusion:
The court quashed the reassessment proceedings on the ground of limitation, holding that the reassessment was barred under the unamended provision and the amended provision could not revive the barred right. Additionally, the court noted that the opportunity provided to the assessee was inadequate, further invalidating the reassessment. The tax revision case was allowed, and the impugned orders were set aside.