2010 (7) TMI 928 - HC - VAT and Sales Tax

Whether the jurisdiction invoked by the opposite party after coming into force of the amendment, has got to cover a period of limitation up to five years preceding next the date of issuance of the impugned notice or the limitation as prescribed in the amended provision is prospective in nature and it would apply only to reassessments onwards from the date of coming into force of the amendment? Held that - Admittedly the notice vide annexure 4 in this case has been issued on July 17, 2008 and the alleged escaped turnover relates to the period 2003-04. Whatever be the mode of reckoning of the period of limitation, be it five years from the end of the period 2003-04 or be it five years backward from the date of the issuance of the impugned notice vide annexure 4, the initiation of the reassessment proceeding cannot be held to be barred by limitation. Appeal dismissed.

Summary

Issues:
Interpretation of the limitation period for reassessment under the Orissa Entry Tax Act before and after the 2005 amendment.

Analysis:
The judgment dealt with the interpretation of the limitation period for reassessment under the Orissa Entry Tax Act before and after the 2005 amendment. The key issue was whether the amended provision, which extended the limitation from three to five years, applied prospectively or retrospectively. The petitioner argued that the notice issued after the amendment's enactment was illegal as the three-year limitation under the old provision had expired. The respondent contended that the limitation being procedural should be applied retrospectively. The court analyzed whether the amended provisions were machinery or charging provisions. It was established that the limitation period falls under procedural machinery provisions and should be construed to effectuate the liability imposed by the charging section.

The court compared the original Section 9 with the amended Section 10 of the Act to determine the applicability of the limitation period. Section 10, introduced in 2005, allowed reassessment within five years from the end of the relevant tax period. The petitioner argued that reassessment for the 2003-04 period should have been initiated by March 31, 2007, barring the 2008 notice. However, the court referred to precedents like Mysore Rolling Mills and Jyoti Traders cases where the Supreme Court upheld retrospective application of limitation periods post-amendment. The court concluded that Section 10's operation related back to cover the previous five assessment years from its enactment in 2005.

In light of the legal analysis and precedents, the court dismissed the writ petition, finding no merit in the petitioner's argument. The judgment emphasized that the amended provision extending the limitation period to five years was retrospective in nature, allowing reassessment for the 2003-04 period despite the notice being issued in 2008. Both judges, B.P. Das and C.R. Dash, concurred with the decision, upholding the retrospective application of the amended provision and the legality of the reassessment notice issued under the extended limitation period.