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TMI Blog1985 (3) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner on 11th August, 1976. The subsequent enquiry revealed that the aforesaid two firms did not conduct any business during that relevant period. As a result, the Commercial Tax Officer issued a notice dated 1st July, 1980, to show cause why the exemption accorded should not be withdrawn and the escaped turnover should not be assessed to correct tax. The petitioner was called upon to appear before him on or before 28th July, 1980. Since the petitioner is stated to have refused to receive the notice, substituted service was effected. Through its clerk, by a written representation and a telegram dated 28th July, 1980, requested to adjourn the enquiry till 25th August, 1980. The request was refused and order was passed withdrawing the exemption and assessed the exempted turnover at 6 per cent on 31st July, 1980, and demand was sent for the payment thereof. An appeal has been filed before the Assistant Commissioner assailing the order on the plea of lack of jurisdiction to reopen the issue; bar of limitation and want of adequate opportunity. The Assistant Commissioner held that the order is within jurisdiction and limitation and remitted to the assessing authority to afford reasona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons give rise to two questions for adjudication, viz., whether the assessing authority has jurisdiction to reopen the assessment for the year 1974-75; and whether it is within limitation? To satisfactorily resolve the disputes, it is of necessity to extract, at the outset the relevant provisions. Section 14(4) empowered the assessing authority on occurrence of any one of the events, viz., where the whole or any part of the turnover of business of a dealer has escaped assessment to tax............ he may after issuing notice to the dealer and after making such enquiry as he may consider necessary, may assess the correct amount of tax payable, setting out the grounds therefor. The grounds enumerated are (a) to (f) mentioned thereunder. They are not relevant to extract. Hence omitted. The assessing authority is empowered to revise the assessment under sub-section (4-A) of section 14 within the period which reads thus: "(a) within a period of six years from the expiry of the year to which the tax, licence fee or registration fee relates, if the event that has occasioned such assessment or levy has occurred on account of the failure of the dealer to disclose the turnover or any of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isable only within such period not exceeding four years from the date on which the order was served on the dealer, as may be prescribed." From the conspectus of the above provisions, the following are the salient features. Under sub-section (4) of section 14, the assessing authority, preceding 17th January, 1978, has no power to revise or correct an assessment already made in respect of a deduction or exemption which has wrongly been allowed; the period of limitation under the unamended sub-section (4-A) in respect of matters falling under clause (a) thereof is six years and for any other causes, a period of four years has been provided under clause (b) and the terminus of the limitation is four years from the ending of the assessment year. But under section 20(3) the period of four years expires from the date on which the assessment order was served on the dealer in the prescribed manner under the Rules. The amendment Act under section 4(1) thereof, empowers the assessing authority itself to revise an assessment in the event of the deduction or exemption has wrongly been allowed. The period of limitation is now uniformly provided under section 14(4-A) as well as section 20(3) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrears of land revenue or prosecution. Thereby the assessment order merely quantifies the liability. When a deduction or exemption is found to have been wrongly allowed, preceding the Amendment Act, the Commissioner of Commercial Taxes under section 20(1) or the other specified officers under section 20(2) are empowered to suo motu revise the assessment or to correct the legality, propriety of such order. By the Amendment Act, instead of the revising authority to take action, it empowered the assessing authority itself to revise on its becoming aware, as a result of the account books or chits or other material got filed or secured from the custody of the dealer or on their independent investigation and was prima facie of the opinion that the deduction or exemption has been wrongly allowed. Thereby the assessing authority is given power to revise the assessment. Therefore, the action taken and the order dated 31st July, 1980, are perfectly within jurisdiction of the assessing authority and the contention contra stems from pigment of imagination and the first limb of the argument is devoid of substance. The next contention is that the impugned order is barred by limitation. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment. Their Lordships have no doubt that the provisions which if applied retrospectively, would deprive of their existing finality of orders which, when the statute came into force were final, are provisions which touch existing rights. Crawford in his Statutory Construction, in section 295, at page 597, states that rights acquired before its amendment are not affected unless the amending statute expressly or by necessary implication so provides. Sutherland in his Statutory Construction, Volume 2, in section 2205, at pages 122-123, has stated that there is no vested right in a particular remedy...... There is no vested right in statutory privilege or exemptions. Neglect of a taxing officer cannot give rise to a vested right to immunity from taxation. At page 130, in section 2210, the learned author further states that statutes of limitation are generally held to relate to remedies than rights. Crawford in his Statutory Construction, in section 279, at page 569, states that a statute of limitations, strictly so-called, operates on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such a machinery for assessment has to be construed by the ordinary rule of construction, that is to say, in accordance with the clear intention of the legislature which is to make a charge levied effective. In Associated Cement Co. Ltd. v. Commercial Tax Officer, Kota [1981] 48 STC 466 (SC), Venkataramiah, J., speaking per majority held that it is the duty of the court while interpreting the machinery provision of taxing statute to give its effect to its manifest purpose having a full view of it. Wherever the intention to impose the liability is clear the courts ought to have no hesitation in giving a common sense interpretation to the machinery sections so that the charge does not fail. The pragmatic illumination thus shed affords us to have full view of the effect of the Amendment Act as to whether it tends to divest retrospectively the petitioner of its 'vested rights if any. It is of necessity to recapitulate that section 5(1) of the Act creates an absolute liability to pay sales tax on the total turnover in excess of Rs. 25,000 at four paise per rupee. The machinery provisions under section 14 designed to quantify taxable turnover and to determine exact liability a dea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing for the Bench followed the above view and held that the law of limitation is procedural law, its provisions operate retrospectively in the sense that they apply to causes of action which arose before their enactment. If the right to sue has become barred by the provisions of the Limitation Act then in force on the date of the coming into force of a later enactment, then such a barred right is not revived by the application of the new enactment. This principle was followed by another Bench in Mohammed Ravoother v. Deputy Commercial Tax Officer [1958] 9 STC 1 (Mad.); AIR 1958 Mad. 176, consisting of Rajagopalan, J., and Rajagopala Ayyangar, J. (as he then was). The facts therein were that under rule 17(1) of the Madras General Sales Tax Rules, 1939, a limitation of two years from the close of assessment year was prescribed. The order expires by 31st March, 1955. Rule 17(1) was amended on 11th March, 1953, enlarging the limitation to three years. Escaped turnover was reassessed on 20th March, 1956, before expiry of three years. That order was assailed contending that the new Act cannot be made applicable and the Act has the effect of retrospective operation and therefore the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s General Sales Tax Rules provided that reassessment could be made within three years, the new Act has fixed a larger period in section 14(4-A). It is further obvious that the old period of three years in these cases had not expired when this section, i.e., section 14(4-A) came into force. That being the case, it follows the extended period of limitation would apply." We respectfully agree with and follow the ratio and the necessary conclusion is that before the expiry of the period of limitation if the statute provides uniform period of limitation for the cause of action arose under the old Act, but before the order reached finality, the altered period of limitation would apply and the new provision would get attracted to the cause of action arose under the old law. The assessment order was served on 11th August, 1976. Therefore, till 10th August, 1980, the Commissioner or the officers specified under subsection (2) of section 20 have power to revise the orders of the assessing authority, but before the expiry thereof, the Amendment Act was made engrafting uniform limitation for actions under sections 14(4) and 20 of the Act alike. The assessing authority also is given power, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition contending that the notice was barred by limitation. The High Court took the view that the Amendment Act does not empower to reopen the assessment when the right to reopen was barred under the old Act at the time when the new Act came into force. On appeal, their Lordships of the Supreme Court held that by the time the Amendment Act has come into force, the limitation prescribed under the old Act has been barred and therefore the new Act does not revive unless the Act is made with retrospective effect. The ratio therein has no application to the facts in this case, for the reasons already stated. In Udipi Vasanta Vihar's case [1969] 23 STC 6 (AP) the facts were that for the assessment year 1959-60 the petitioner was assessed to tax. But subsequent investigation revealed that the assessee suppressed the real turnover. Under section 14(4) of the Act, the assessment was proposed to be revised. Then he filed a writ petition under article 226 of the Constitution contending that the assessment order is without jurisdiction. In support thereof it was stated that section 14(4), as it stood before the Amendment Act 16 of 1963, did not enable the authorities to make best judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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