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TMI Blog2018 (7) TMI 1766X X X X Extracts X X X X X X X X Extracts X X X X ..... aside the notices issued beyond the limitation period as provided under Section 25(1) of the KVAT Act - appeal allowed. - W.A. No. 1184 of 2013 - - - Dated:- 5-7-2018 - K. VINOD CHANDRAN ASHOK MENON, JJ. Appellant: By Advs. Sri. T.M. Sreedharan (Sr.) Sri. V.P. Narayanan Smt.Boby M. Sekhar Smt. Divya Ravindran Respondent: By Sri. C.E. Unnikrishnan, Special Government Pleader (For Finance) J U D G M E N T Vinod Chandran, J. The issue raised in the Writ Appeal is no longer res integra and is covered in favour of the appellant/petitioner by the order of the Full Bench, which answered the reference by a Division Bench in the above Writ Appeal. 2. The brief facts to be stated are that notices under Section 25(1) of the Kerala Value Added Tax Act, 2003 ('KVAT Act', for short) was issued on 21.1.2013 and 22.1.2013, respectively Exts.P1 and P2, for the assessment years 2005-06 and 2006-07. The Act, in a departure, from the earlier regime under the Kerala General Sales Tax Act, 1963 ('KGST Act', for short) provided for completion of assessment on the filing of return by the assessee. Section 25 of the KVAT Act provided for assessment of escap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year period. If the period provided was for completion of assessment, then necessarily an initiation of proceedings, which obviously the notices are; is definitely barred and out of time. But the question arose by reason of the subsequent amendment to the statute extending the period for completion of assessment. 6. The Full Bench considering the Reference upheld the decision in Tirur Medical Stores (supra). It was held by the Full Bench that the period provided under Section 25(1) of the KVAT Act was for initiation of proceedings. The issue highlighted by the order in reference, being the unreasonable delay that would occur for completion of assessment, was also noticed by the Full Bench. The Full Bench after observing that the said issue was not a point of reference, opined that, even otherwise, there could be no structured time frame issued by this Court sitting in Article 226 of the Constitution of India and left it to the legislature to decide on the time frame required for completion of assessment. 7. The learned Special Government Pleader (Taxes) appearing for the State would contend that the Full Bench has gone into areas where it ought not to have gone into, especial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars. If the Full Bench had looked into the proviso, definitely the answer would have been otherwise, contends the learned Special Government Pleader (Taxes). It is also urged that when the legislature is presumed to know the law of the land, it cannot be imagined that there would be a provision introduced, which is redundant on the face of it. The proviso extending the period for completion of assessment was introduced by the legislature on its understanding of the determination to proceed being the final determination, i.e. completion of assessment. When two interpretations are possible, relying on Heydon's Rule, the learned Special Government Pleader (Taxes) submits that the purpose and intention behind the legislation has to be advanced and an interpretation by the Constitutional Court always should be to advance such purpose and intention. The learned Special Government Pleader (Taxes) also places on record the decision of the Honourble Supreme Court in AIR 2015 SC 3479 [Indian Performing Rights Society Ltd. V. Sanjay Dalia and another] to further persuade this Court to permit the assessments to be completed, in the extended period. 12. Indian Performing Rights Society L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposive construction' or 'mischief rule' [Anderton v. Ryan 1985 2 All ER 355], enables consideration of four matters in construing an Act: (i) What was the law before the making of the Act, (ii) What was the mischief or defect for which the law did not provide, (iii) What is the remedy that the Act has provided, and (iv) What is the reason of the remedy. The rule then directs that the courts must adopt that construction which shall suppress the mischief and advance the remedy . The rule was explained in the Bengal Immunity Co. v. State of Bihar [AIR 1955 SC 661] by S.R. Das, CJI as follows: It is a sound rule of construction of a statute firmly established in England as far back as 1584 when Heydon's case (supra) was decided that for the sure and true interpretation of all Statutes in general (be they penal or beneficial, restrictive or enlarging of the common law) four things are to be discerned and considered: 1st - What was the common law before the making of the Act? 2nd - What was the mischief and defect for which the common law did not provide? 3rd - What remedy the Parliament hath resolved and appointed to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act was eschewed widely. It may appear to the court that one of the opposing construction of the enactment, if adopted, would operate a mischief of its own. The prospects of this would constitute a negative factor in weighing the applicability of the construction in question. The court also has in mind the consequences for the public welfare. 15. Section 25(1) of the KVAT Act specifically speaks of a limitation of five years for proceeding to determine to the best of judgment the turnover, when the contingencies as enumerated under the provision occur. The Full Bench has categorically held that the words proceed to determine would indicate initiation of proceedings, that is with a notice under Section 25(1). In normal circumstances, this interpretation would aid the Department insofar as initiating proceedings within five years and then having its own sweet time to complete the assessment. The counter mischief is in that, otherwise the Department will have to initiate and conclude the reassessment within the period of limitation provided in Section 25(1). This was never the intention when originally the Act was enacted with Section 25(1).The legislative wisdom is u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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