Sales Tax: Extension of period of Assessment order under the provisions Section 11(10) of the Punjab General Sales Tax Act, 1948
Civil Appeal Nos. 2506-2511 of 2016
Bench: Chief Justice of India, T. S. Thakur; Justice A. K. Sikri; Justice R. Banumathi
Case Brief: In the present case, the Supreme Court is concerned with the several appeals, where the common issue is in question which is connection with the interpretation of the sub- section (10) of Section 11 of the Punjab General Sales Tax Act, 1948. As such, the Court has decided to disposed of all such appeals by a single common judgement. The issue was connection with the Assessment years 2000-2001, 2002-2003 and 2003-2004. It was observed admitted position in the case that no assessment was made in the respect of any of these Assessment years. However, when the Assessing Officer had sent notices to the assessee in Form ST- XIV for the concerned Assessment years, i.e. after the expiry of three years, the assessee objected that such notices were sent beyond the period of assessment and as such, this action in not permissible. It was observed by the Court that the Sub- section (10) of Section 11 of the said Act is empowering the Commissioner to extend the period of three years for passing the order of assessment for such further period as he may deem fit. As such, in the present case, the Commissioner has passed the orders where the extension of time is granted on the ground that the case of the assessee for the year 1999- 2000 was pending with the Tribunal. However, further on challenge to the said orders, the Tribunal denied any action and the said orders were upheld. However, the High Court had considered the assessee’s contention where it was pleaded that though there was a power of extension, but such extension of time could be made only within the existing limitation period of three years (which is the limitation period for passing of orders by the Assessing officer). High Court, by placing heavy reliance upon the ruling[1] of the Karnataka High Court held that since the limitation period expires, the immunity from subjecting itself to the assessment sets in and right to make assessment gets extinguished. However, with the present appeals the Revenue has moved to the Apex Court assailing the decision of High Court. Apex Court held that the rulings relied upon by the High Court in turn refers to the similar view taken by the High court of Gujarat in its verdict[2]. As such, these three High Courts have taken identical view on concerned issue. The Court also considered that though the three High Courts were dealing with the different language laws, however, the scheme of the Punjab Act relating to the assessment order is normally to be made within three years period. Also, the court observed that the purport and objective of the laws from other two states are similar. Court after considering the ratio laid by the Karnataka High Court, observed that upon the lapse of the period of limitation prescribed, the right of extension of time get extinguished. The same dicta is agreed by the Court and applied in the present case. And when such right to extension of time is extinguishes the assessee gets a valuable right, which cannot be lightly taken away. Thus, the court observed only way to interpret the section 11 (10) of the Act, is by holding that power to extend the time is to be exercised before the normal period of assessment expires.
[1] Bharat Heavy Electricals Ltd. vs. Assistant Commissioner of Commercial Taxes (INT-I),South Zone, Bangalore and others (2006) 143 STC 10
[2] Javer Jivan Mehta Vs. Assistant Commissioner of Sales Tax (Appeal) (1998) 111 STC 199
Read the Judgement: State Of Punjab & Ors. Vs. M/S Shreyans Indus.Ltd.Etc.