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TMI Blog2009 (7) TMI 1174X X X X Extracts X X X X X X X X Extracts X X X X ..... been enforced with effect from April 1, 2005. Facts re: VATAP No. 78 of 2008 For the year 2001-02, the corporation filed its return with the Assessing Authority and deposited the tax due. The return could have been filed on or before April 30, 2002. The Assessing Authority, however, found some discrepancies made by the corporation on the sale of MTO at eight per cent, whereas it was required to be 22 per cent (including surcharge). The Revenue found that it has resulted in short payment of tax. Accordingly, an additional demand of Rs. 26,70,751 was raised on July 10, 2006 (A1) which included penalty of Rs. 1,30,000 under section 10(6) of the Act and another penalty of Rs. 2,000 under section 23 of the Act along with interest of Rs. 13,24,772 under section 11D of the PGST Act. The corporation preferred an appeal before the Deputy Excise and Taxation Commissioner (Appeals), Patiala Division, Patiala, raising the plea of limitation alleging that in respect of assessment year 2001-02, the assessment proceedings could have been finalized within three years of the last date of filing of the return, which was April 30, 2002 and the period of three years came to an end on April 30, 2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustries v. State of Punjab [2005] 139 STC 57 (P&H), Combined Industries Limited v. State of Karnataka [1999] 112 STC 225 (Karn) and Mansa Co-operative Spinning Mills Ltd. v. State of Punjab [2006] 148 STC 443 (P&H). Under these circumstances, the contention of the counsel for the appellant that the assessment made was not within limitation and was liable to be set aside, cannot be accepted. The penalty levied under section 10(6) by the assessing authority had already been set aside by the first appellate authority and that portion of the order was not challenged by the State. So far as interest is concerned, the appellate authority had directed that interest is compensatory for delayed payment and is chargeable in view of decision of the Punjab and Haryana High Court in Rajasthan Wool Industries v. State of Punjab reported in [1994] 92 STC 104 (P&H) and that of apex court in Calcutta Jute Manufacturing Co. v. Commercial Tax Officer reported in [1997] 106 STC 433. Counsel of the appellant has stated that the appellant shall have no objection to pay interest as per section 11D(2)." At this stage it may be pertinent to notice that the State of Punjab wanted to introduce the value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce has been placed on another Division Bench of the Karnataka High Court rendered in the case of Combined Industries Limited v. State of Karnataka [1999] 112 STC 225. Mr. Goyal has further argued that no amendment in the PGST Act could have been made on May 12, 2005 after the PGST Act, 1948 was repealed with effect from April 1, 2005 by inserting section 11CC. He has argued that in any case section 11CC is not retrospective in its operation. Another submission made by learned counsel is that if section 11CC as inserted on May 12, 2005 is made applicable then it can govern only the period between July 19, 2000 to September 11, 2002 and not before or after that period, which is wholly absurd. Another submission of learned counsel for the petitioner is that the basic object of incorporating section 11CC in the PGST Act was made clear when the Bill was introduced in the Punjab Legislative Assembly on April 7, 2005. He has drawn our attention to the Statement of Objects and Reasons, which suggests that the Bill was introduced to overcome a situation that has developed on account of judgment delivered by the honourable Supreme Court in the case of Cepham Milk Specialities Ltd. [2004] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding the period of limitation from three years to five years by promulgation of section 11CC by Punjab Act 10 of 2005 which came into force with effect from May 12, 2005. (B) Whether the rights vested in the assessee acquired on April 30, 2005 would extinguish by an amendment made by Act No. 10 of 2005 with effect from May 12, 2005 although the amendment has not been given retrospective effect or could the time-barred assessment be re-opened on the basis of statutory extension of time. Re: Questions A and B Both the questions are interlinked and can suitably be answered by first examining the relevant statutory provisions. Under section 11(1), (2) and (3) of the PGST Act the maximum period for framing assessment is three years from the last date prescribed for filing of return and the same reads thus: "11. Assessment of tax.-(1) If the Assessing Authority is satisfied without requiring the presence of dealer or the production by him of any evidence that the returns furnished in respect of any period are correct and complete, he shall pass an order of assessment on the basis of such returns within a period of three years from the last date prescribed for furnishing the last ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn in respect of these years: Provided that no order shall be made under this section against any dealer without giving him an opportunity of being heard. (2) Notwithstanding anything contained in any judgement, decree or order of any court or other authority to the contrary, any assessment, reassessment, levy or collection of any tax in respect of the dealers, made or purported to have been made under the provisions of this Act for the period commencing from the 19th day of July, 2000 and ending on the 11th day of September, 2002, shall be as valid and effective as if such assessment, reassessment, levy or collection had been made, under this Act as amended by the Punjab General Sales Tax (Amendment and Validation) Act, 2005. (3) For the removal of doubts, it is hereby declared that nothing in sub-section (2) shall be construed as preventing any person,- (a) from questioning in accordance with the provisions of this Act as amended by the Punjab General Sales Tax (Amendment and Validation) Act, 2005 and the Rules made thereunder, the assessment, reassessment, levy or collection of tax on the dealers in respect of the period commencing from the 19th day of July, 2000 and endin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 11CC as already noticed. The Statement of Objects and Reasons, which is appended to the Act, dated April 7, 2005, substantiates the aforesaid thesis, which reads thus: "As the cess levied under the Punjab Dairy Development Board Act has been struck down by the honourable Supreme Court of India, Dairy Development Department has collected the milk cess amounting to Rs. 15.92 crores (plus interest) during July, 2000 to September, 2002. The honourable Supreme Court of India in its interim orders of dated July, 2003 had instructed that in case, the appellants (State Government and PDDB) lose the case, then they would have to refund the amount of cess collected to respective parties with rate of interest to be decided by the court in the final judgment. Although there was no mention of refund or of any rate of interest in the final judgment delivered by the Supreme Court of India on 20th August, 2004, but since the cess has been declared to be invalid, therefore in natural course, the Department would have to refund it, if suitable remedial steps are not taken immediately. To avoid the refund of this cess Mr. Venugopal has suggested issuing a validating Ordinance/Act imposin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... General Sales Tax (Amendment and Validation) Ordinance, 2005 and the rules made thereunder, the assessment, reassessment, levy or collection of tax on the owners of the milk plants for the period commencing from the 19th day of July, 2000 and ending on the 11th day of September, 2002; and (b) from claiming refund of any tax paid by him in excess of the amount, due from him under this Act as amended by the Punjab General Sales Tax (Amendment and Validation) Act, 2005." The necessary intendment of the additions made by Punjab Act No. 10 of 2005 is self-evident. It was indeed to overcome the loss of purchase tax and the situation which has resulted from the judgment of the honourable Supreme Court in the case of Cepham Milk Specialities Ltd. [2004] 137 STC 163; [2004] 8 SCC 621. For the sake of argument if it is presumed that the time-limit was legally extended to five years on addition of section 11CC by Punjab Act No. 10 of 2005, then also the Revenue has no case. There is lot of substance in the submission of the learned counsel that after the expiry of the period of three years on April 30, 2004 and April 30, 2005 no period could be extended. His reliance on the judgment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years from the end of the year of assessment. But authority of the Income-tax Officer under the Act before it was amended by the Finance Act of 1956 having already come to an end, the amending provision will not assist him to commence a proceeding even though at the date when he issued the notice it is within the period provided by that amending Act. This will be so, notwithstanding the fact that there has been no determinable point of time between the expiry of the time provided under the old Act and the commencement of the amending Act. The Legislature has given to section 18 of the Finance Act, 1956, only a limited retrospective operation, i.e., up to April 1, 1956, only. That provision must be read subject to the rule that in the absence of an express provision or clear implication, the Legislature does not intend to attribute to the amending provision a greater retrospectivity than is expressly mentioned, nor to authorise the Income-tax Officer to commence proceedings which before the new Act came into force had by the expiry of the period provided, become barred." The aforesaid view has been followed and applied by the honourable Supreme Court in the case of National Agricu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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