1997 (1) TMI 506 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to notice reopening assessment for the year 1967-68 based on alleged error in previous assessment.

Analysis:
The petitioner, a surgical cotton manufacturing firm, challenged a notice issued by the Assistant Excise and Taxation Commissioner, Bhatinda, reopening the assessment for the year 1967-68. The original assessment in 1969 treated surgical cotton on par with ordinary cotton for sales tax purposes. However, a subsequent order in 1976 by the Sales Tax Tribunal differentiated surgical cotton from ordinary cotton, leading to the notice in question issued in 1981. The petitioner's counsel argued against the reopening of the assessment after a significant lapse of time, citing section 21(1) of the Punjab General Sales Tax Act, 1948.

The Deputy Advocate-General contended that the absence of a specific time limit in the statute for exercising revisional powers justified the notice's issuance despite the delay. However, the court emphasized the principle that once finality is reached in a proceeding, it should not be unsettled after a long period. Referring to a Supreme Court decision, the court highlighted the need for the revisional power to be exercised within a reasonable time, determined on a case-by-case basis. The court noted that changes in judicial decisions do not justify reopening matters that have attained finality.

The court held that the delay of 13 years in exercising the revisional power was unreasonable and not within a reasonable period as required by law. It emphasized that a reasonable time does not extend to such a lengthy period. Consequently, the court quashed the Assistant Excise and Taxation Commissioner's order to reopen the assessment for the year 1967-68. The writ petition was allowed, and the impugned order was set aside with no costs imposed.