Time-barred tax assessments cannot be revived by later amendment unless the statute clearly gives retrospective effect

Assessment proceedings that had already become time-barred under the unamended limitation period could not be revived by a later amendment extending the assessment period, because the amendment was not shown to operate retrospectively so as to restore an extinguished power. The settled principle applied was that an assessee acquires a vested right not to be proceeded against once the statutory limitation expires, and a subsequent amendment cannot reopen a time-barred assessment unless the statute clearly so provides. The special validating provision was confined to its expressly covered class and period and did not authorise the impugned assessments, so the assessments and consequential demands were quashed.

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Issues: Whether the assessments for the relevant years, having become time-barred under the unamended limitation period, could validly be sustained by a later amendment extending the period of assessment after repeal of the earlier Act.

Analysis: Under the assessment provisions of the Punjab General Sales Tax Act, 1948, assessment had to be completed within three years from the last date for filing the return. For the years in question, that period expired before the impugned assessment orders were made. Section 11CC, inserted later, could not revive a power to assess that had already come to an end, because the amendment was not shown to have a clearly retrospective effect extending to revive extinguished proceedings. The Court applied the settled principle that an assessee acquires a vested right not to be proceeded against once the limitation period expires, and that a later amendment cannot reopen a time-barred assessment unless the statute expressly so provides. The special validating provision was confined to the class and period to which it specifically applied and did not authorise the impugned assessments against the appellant.

Conclusion: The later amendment did not validate or revive the already time-barred assessments, and the challenge to the assessments succeeded.

Final Conclusion: The assessment orders and consequential demands were quashed, and the appeals succeeded with costs.

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