1985 (3) TMI 241 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Jurisdiction to reopen the assessment for the year 1974-75.
2. Limitation period for reopening the assessment.

Issue-wise Detailed Analysis:

1. Jurisdiction to Reopen the Assessment for the Year 1974-75:
The petitioner, a registered dealer under the Andhra Pradesh General Sales Tax Act, challenged the revised assessment order dated 31st July 1980, which withdrew an earlier exemption for the year 1974-75. The Commercial Tax Officer issued a notice on 1st July 1980 to reassess the turnover, following an inquiry that revealed the petitioner's claimed purchases were from firms that did not conduct business during the relevant period. The petitioner argued that under the unamended Section 14(4-A) of the Act, the period of limitation was four years from the end of the assessment year, expiring on 31st March 1979. The Amendment Act, effective from 17th January 1978, was argued to be prospective, and thus, the notice issued on 1st July 1980 was claimed to be without jurisdiction and barred by limitation.

The court analyzed the relevant provisions, noting that under Section 14(4), the assessing authority had no power to reopen assessments where deductions or exemptions were wrongly allowed prior to the amendment. The Amendment Act empowered the assessing authority to revise such assessments, aligning the limitation period with Section 20(3), which is four years from the date of service of the assessment order. The assessment order served on 11th August 1976 meant the limitation period expired on 10th August 1980. Therefore, the court held that the assessing authority had jurisdiction to reopen the assessment, and the action taken on 31st July 1980 was within jurisdiction and not barred by limitation.

2. Limitation Period for Reopening the Assessment:
The petitioner contended that the limitation period under the unamended Section 14(4-A) expired on 31st March 1979, and since the Amendment Act was not retrospective, the right to reopen the assessment was barred. The court examined the concept of vested rights and procedural statutes, referencing various legal authorities and precedents. It concluded that the limitation for reopening assessments is procedural and can be applied retrospectively unless it affects vested rights. The court found that the Amendment Act did not retrospectively alter substantive rights but merely extended the procedural timeline for reassessment. The court held that the revised assessment within four years from the date of service of the initial assessment order was valid, and the Amendment Act's procedural provisions applied retrospectively to the extent of the limitation period.

The court dismissed the revision petition, upholding the revised assessment order as within jurisdiction and not barred by limitation, and awarded costs to the respondent.

Conclusion:
The judgment addressed the jurisdiction and limitation issues concerning the reopening of the assessment for the year 1974-75. It affirmed the assessing authority's power to revise the assessment within four years from the date of service of the initial assessment order, as per the Amendment Act, and dismissed the petitioner's claims of lack of jurisdiction and bar of limitation. The revision petition was dismissed with costs.