2010 (8) TMI 882 - HC - VAT and Sales Tax

Whether the fresh assessment made is barred by limitation since it is passed after more than three years after the order passed in appeal, in view of the proviso appearing below Explanation II to sub-section (4A) of section 33 of the Bombay Sales Tax Act, 1959 Held that - The questions referred stand answered in favour of the assessee and against the Revenue

Issues Involved:
1. Interpretation of the first proviso to sub-section (4A) of section 33 of the Bombay Sales Tax Act, 1959.
2. Whether the fresh assessment orders were time-barred under the said proviso.
3. Applicability of the proviso to all assessment cases under section 33.

Detailed Analysis:

Issue 1: Interpretation of the First Proviso to Sub-section (4A) of Section 33
The core of the dispute revolves around the interpretation of the first proviso to sub-section (4A) of section 33 of the Bombay Sales Tax Act, 1959. The proviso states that a fresh assessment must be made within thirty-six months from the date of any finding, direction, or order by any authority under the Act, including the Tribunal, High Court, or Supreme Court.

The Tribunal held that this proviso applies to all assessment cases remanded for fresh assessment, not just those covered under sub-section (4A). The Revenue argued that the time-limit for completion of assessment is only applicable to cases where all returns are filed by the due date, as specified under sub-section (4A). They contended that the proviso should not apply to cases under sub-sections (5) and (6), where no specific time-limit is provided.

Issue 2: Whether the Fresh Assessment Orders Were Time-Barred
The respondent-assessee argued that the fresh assessment was barred by limitation as it was passed more than three years after the order in appeal. The Tribunal agreed with this contention, holding that the statutory time-limit in the first proviso to section 33(4A) applies to all remanded assessment cases.

The Revenue, however, contended that the time-limit of thirty-six months applies only to cases where returns are filed within the due date, as per sub-section (4A). They argued that since the assessee did not file all returns on time, the limitation period should not apply.

Issue 3: Applicability of the Proviso to All Assessment Cases Under Section 33
The Tribunal's interpretation was that the proviso to sub-section (4A) applies broadly to all assessment cases under section 33. The Revenue, on the other hand, argued that the proviso's placement under sub-section (4A) indicates its limited applicability only to cases covered by that sub-section.

Upon reviewing the statutory provisions and rival submissions, the court found that the placement of the proviso does not restrict its application solely to sub-section (4A). The court emphasized that the entire section and its scheme must be considered while interpreting the proviso. The court referred to the Supreme Court's judgment in Debaki Debi, which held that a similar proviso in the Orissa Sales Tax Act was not limited to orders of assessment under a specific section but applied to any order assessing tax under the Act.

The court also noted that the proviso does not mention the requirement of filing returns within the prescribed time-limit. Thus, the argument that the time-limit applies only to timely filed returns was rejected. The court cited its own precedent in Commissioner of Sales Tax v. Malbar Products, which established that assessments based on returns, whether timely or belated, fall under sub-sections (3) and (4) of section 33, not sub-section (5).

Conclusion:
The court concluded that the first proviso to sub-section (4A) of section 33 applies to all assessment cases remanded for fresh assessment, regardless of whether the returns were filed on time. Therefore, the fresh assessment orders in question were indeed time-barred. The questions referred to the court were answered in favor of the assessee and against the Revenue. The references were disposed of with no order as to costs.

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