2014 (7) TMI 405 - HC - VAT and Sales Tax

Validity of re assessment order - Various amendments done in applicable Acts - Bar of limitation - whether assessment made by Assessing Authority is within the period of limitation or not - Held that - Statute has not extended period of limitation but separate period has been prescribed in respect of Assessments Years specified in the proviso. In other words, specifically Assessing Authorities have been empowered to make assessment in certain cases till a particular date which is longer than the general period of limitation prescribed under Section 21(2). Limitation only deprives the remedy and not the right. When a limitation expires in the matter of assessment etc. it would deprive Assessing Authority to pass an order in respect of a particular period, though cause to pass an order exists and continues. Due to applicability and availability of a provision providing limitation, Authority concerned cannot pass an order of assessment or re-assessment, but as soon as that disability is lifted, either by amendment in the Statute or otherwise, the Authority can always proceed to exercise its statutory function. There is a general exposition of law that limitation once expired will not revive, but that will have no application to the present case inasmuch it is not a case of revival of limitation, but prescription of limitation in a different manner. It has the effect of providing a longer period of limitation by amendment in the Statute. Since the validity of U.P. Act No. 11 of 1997 is not under challenge, in my view, the question of limitation in the case in hand in respect of Assessment Years in dispute has to be examined by simply going through Section 21 (2) as has been substituted in the Statute by U.P. Act, No. 11 of 1997 and if it is considered from the said angle, it is difficult to hold that the order of assessment passed on 30.03.1998 are barred by time. - Decided against assessee.

Summary

Issues Involved:
1. Whether the assessment made by the Assessing Authority is within the period of limitation or not.

Detailed Analysis:

Issue 1: Whether the assessment made by the Assessing Authority is within the period of limitation or not

The core issue presented before the court was whether the assessment orders passed by the Assessing Authority on 30.03.1998 were within the statutory period of limitation as prescribed under Section 21(2) of the U.P. Trade Tax Act, 1948. The assessee argued that the limitation period for passing the assessment orders had expired on 31.03.1996, thus rendering the orders invalid.

For the purpose of determining the period of limitation, the court examined the various amendments to Section 21(2) of the Act. Initially, the period of limitation for passing an assessment order was four years from the end of the assessment year. However, subsequent amendments altered this period:

1. U.P. Sales Tax (Amendment and Validation) Act, 1982: Introduced a proviso allowing assessments for the years 1974-75 and 1975-76 to be made by 31.03.1982.

2. U.P. Act No. 8 of 1992: Maintained the four-year limitation but added a proviso for the assessment year 1987-88, allowing assessments to be made by 31.03.1993.

3. U.P. Act No. 31 of 1995: Reduced the general limitation period to three years or 31.03.1996, whichever was later, with a proviso for the assessment year 1989-90, permitting assessments to be made by 31.03.1995.

4. U.P. Act No. 11 of 1997: Further amended Section 21(2), allowing assessments to be made within two years from the end of the assessment year or by 31.03.1998, whichever was later.

The court noted that the amendment by U.P. Act No. 11 of 1997 provided a new limitation period, allowing assessments to be completed by 31.03.1998. This amendment applied irrespective of whether the previous limitation period had already expired. The court emphasized that the statutory right conferred by a limitation period can be altered by subsequent legislative amendments, provided such amendments are valid and not challenged.

The court held that the amendment introduced by U.P. Act No. 11 of 1997 effectively extended the limitation period for completing assessments for the disputed years. Consequently, the assessment orders passed on 30.03.1998 were within the extended limitation period and therefore valid.

Conclusion

The court concluded that the assessment orders passed by the Assessing Authority on 30.03.1998 were within the period of limitation as prescribed by the amended Section 21(2) of the U.P. Trade Tax Act, 1948. The revisions filed by the assessee were dismissed with costs quantified at Rs. 2,000 for each set of revisions.