1993 (2) TMI 325 - HC - VAT and Sales Tax

Interpretation of Limitation Period under Sales Tax Act: Retrospective Amendments and Vested Rights

The court interpreted Section 21 of the U. P. Sales Tax Act regarding the limitation period for assessment. It held that amendments to procedural laws, ... - Issues:1. Interpretation of Section 21 of the U. P. Sales Tax Act regarding the limitation period for assessment.2. Retroactive application of amendments to procedural laws.3. Jurisdiction of the Commissioner to order re-assessment after the limitation period has expired.4. Protection of vested rights against subsequent amendments.Analysis:1. The case involved the interpretation of Section 21 of the U. P. Sales Tax Act, specifically regarding the limitation period for assessment. The petitioners were initially declared exempted from sales tax for the assessment year 1985-86, but the Commissioner later granted permission for re-assessment beyond the four-year limitation period as per Section 21(2) of the Act.2. The issue of retroactive application of amendments to procedural laws was raised, as Section 21 of the Act was amended by U. P. Act No. 28 of 1991. The amendment extended the limitation period for assessment to eight years, but the question arose whether this amendment could be applied retrospectively to cases where the limitation period had already expired.3. The jurisdiction of the Commissioner to order re-assessment after the limitation period had expired was a crucial point of contention. The petitioners argued that the amendment granting such authority to the Commissioner could not be applied to their case, which had already been closed before the enactment of the amendment.4. The court considered the protection of vested rights against subsequent amendments to the law. Relying on previous decisions, the court held that amendments to procedural laws, including limitation periods, are retrospective only for pending matters and cannot revive closed or dead cases. Therefore, the court concluded that the impugned order of the Commissioner authorizing re-assessment was without jurisdiction and quashed the same to protect the petitioners' vested rights.In conclusion, the court allowed the writ petition, quashed the order of the Commissioner for re-assessment, and affirmed the principle that vested rights cannot be divested by subsequent amendments to procedural laws.