2016 (7) TMI 586 - HC - VAT and Sales Tax

Suo motu revision proceedings - Period of limitation - - Held that - Tribunal has erred in sustaining the order of Assistant Commissioner of Sales Tax so far as it relates to applicability of limitation in the revisional proceedings. The Tribunal is not justified in holding that amendment in section 67(1)(a) of the Act is not applicable to such pending proceedings wherein notice for revision in form no. 49 has been issued prior to 07.04.1992 and proceedings are still pending on that date. It is well settled law that in the absence of challenge to the validity and amendment of the Rules, the plea that time limit cannot be applied to credit accrued prior to the amendment and introduction of amendment to rule is arbitrary cannot be availed.

Summary

Issues:
1. Interpretation of Section 67(1)(a) of the Gujarat Sales Tax Act, 1969 regarding limitation on passing revisional orders.
2. Applicability of the amendment in section 67(1)(a) to pending revision proceedings initiated before the date of the amendment.

Issue 1: Interpretation of Section 67(1)(a) regarding limitation on passing revisional orders

The applicant, a registered dealer under the Gujarat Sales Tax Act, 1969, challenged the revisional order passed by the Assistant Commissioner of Sales Tax after the expiry of 12 months from the date of service of notice for revision. The applicant argued that the amendment to section 67(1)(a) of the Act, which required orders in suo motu revision proceedings to be passed within 12 months from the date of notice, applied to pending proceedings. The respondent contended that since the revisional proceedings were initiated before the amendment, the limitation period did not apply. The Court referred to relevant case laws, including Osram Surya (P) Ltd and Royal Motor Car Co., emphasizing that limitation is a matter of procedure and new periods of limitation apply to pending proceedings. The Court held that the revisional authority must pass orders within the specified time frame, and the Tribunal erred in not applying the amendment to pending proceedings.

Issue 2: Applicability of the amendment in section 67(1)(a) to pending revision proceedings

The crux of the issue was whether the amendment in section 67(1)(a) of the Act, which imposed a 12-month limitation on passing revisional orders, applied to revision proceedings initiated before the date of the amendment. The applicant argued that the amendment should be applied retrospectively to all pending proceedings, including those initiated before the effective date of the amendment. The respondent contended that since the revisional proceedings were initiated prior to the amendment, the new limitation period did not apply. The Court analyzed relevant case laws and held that the revisional authority must adhere to the amended provision, and the Tribunal's decision to not apply the amendment to pending proceedings was erroneous. The Court ruled in favor of the applicant, emphasizing that in the absence of a challenge to the validity of the amendment, the plea that the time limit cannot be applied retrospectively is not tenable.

In conclusion, the High Court of Gujarat, in a judgment delivered by Justice KS Jhaveri, addressed the interpretation of Section 67(1)(a) of the Gujarat Sales Tax Act, 1969 regarding the limitation on passing revisional orders. The Court ruled that the amendment imposing a 12-month limitation applied to pending revision proceedings initiated before the effective date of the amendment. The Court emphasized that the revisional authority must comply with the specified time frame for passing orders, and the Tribunal's decision to not apply the amendment retrospectively was incorrect. The judgment favored the applicant, highlighting that in the absence of a challenge to the validity of the amendment, the argument against applying the time limit retrospectively was not valid.