TaxTMI 
TaxTMI 
2016 (3) TMI 331
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....sly, assessment in respect of these Assessment Years was to be made under the said Act. The assessee had filed quarterly returns in respect of the aforesaid Assessment Years. In terms of Section 11(3) of the Act, time-limit for completing the assessment provided therein is three years from the end of the year. Accordingly, assessments were to be made by 30th April, 2004 for the Assessment Year 2000-01, 30th April, 2005 for the Assessment Year 2001-02, 30th April, 2006 for the Assessment Year 2002-03 and 30th April, 2007 for the Assessment Year 2003-04. It is an admitted case that no assessment was made in respect of any of these Assessment Years by the aforesaid stipulated dates. 4) The Assessing Officer, however, sent notices to the respondent-assessee in Form ST-XIV for the aforesaid Assessment Years, i.e., after the expiry of three years. The assessee took an objection that these notices were sent beyond the period of assessment and, therefore, it was not permissible for the Assessing Officer to issue notice after the expiry of three years and carry on with the assessment proceedings. 5) We may point out that under Section 11(10) of the Act, the Commissioner is empowered t....
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.... in Bharat Heavy Electricals Ltd. v. Assistant Commissioner of Commercial Taxes (INT-I), South Zone, Bangalore and others (2006) 143 STC 10 which judgment of Karnataka High Court, in turn, refers to similar view taken by Gujarat High Court in Javer Jivan Mehta v. Assistant Commissioner of Sales Tax (Appeal) (1998) 111 STC 199. Thus, three High Courts have taken identical view, namely, though power to extend time of three years for a further period of passing the assessment is there with the Commissioner, the same has to be exercised before the expiry of normal period of three years and not subsequent there to. 8) As the submissions of the parties on either side would be better understood once the relevant statutory provision is noted, it would be apposite to reproduce the provisions of Section 11 of the Act, which are as follows: "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 ....
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.... in addition to the amount so assessed, a sum not exceeding one and a half times that amount. (7) The amount of any tax, penalty or interest payavble under this Act shall be paid by the dealer in the manner prescribed, by such date as may be specified in the notice issued by the Assessing Authority for the purpose and the date so specified shall not be less than fifteen days and not more than thirty days from the date of service of such notice: Provided that the Assessing Authority may, with the prior approval of the Assistant Excise and Taxation Commissioner, Incharge of the District extend the date of such payment or allow payment by instalments against an adequate security or bank guarantee. (8) If the tax assessed under this Act or any instalment thereof is not paid b y any dealer within the time specified thereof in the notice of assessment or in the order permitting payment in installments, the Commissioner or any other person appointed to assist him under sub-section (1) of Section 3 may, after giving such dealer an opportunity of being heard, impose on him a penalty not exceeding in amount the sum due from him. (9) Any assessment made und....
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....n of time, naturally, is open to judicial review, albeit within the confines of law on the basis of which such judicial review is permissible. 10) Be that as it may, the question before us is as to whether the power to extend time is to be necessarily exercised before the normal expiry of the said period of three years run out. 11) Mr. Ganguli, submitted that there is no such embargo or impediment provided in sub-section (10) of Section 11 mandating the Commissioner to pass an order of extension necessarily within the normal period of three years. He submitted that the word used in the aforesaid provision 'extension' of time is in contradistinction to the word 'deferment' which appears in the Karnataka Legislation. On that basis, he argued that it was inappropriate on the part of the High Court to refer to and rely upon the judgment of Karnataka High Court inasmuch as provision of law contained in the Karnataka Sales Tax Act is entirely different. He further submitted that since in Punjab Legislation, the expression used is 'extension of time', the Court was required to construe the provision keeping in mind the said language. Mr. Ganguli argued that a....
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.... be extracted. "148. Enlargement of time.- Where any period is fixed or granted by the court for the doing of any act prescribed or allowed by this Code, the court may, it its discretion, from time to time, enlarge such period not exceeding thirty days in total, even though the period originally fixed or granted may have expired." A plain reading of the above would show that when any period or time is granted by the court for doing any act, the court has the discretion from time to time to enlarge such period even if the time originally fixed or granted by the court has expired. It is evident from the language employed in the provision that the power given to the court is discretionary and intended to be exercised only to meet the ends of justice." 13) Mr. Ganguli further submitted that even in the context of taxation law, a similar reasoning has been adopted by the Court in Commissioner of Income Tax, Jullundur v. Ajanta Electricals (1994) 5 SCC 182. While interpreting Section 139(2) of the Income Tax Act, which empowered the Assessing Officer to grant an extension of time for filing of the return of income, upholding the power of the Income Tax Officer to ext....
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....nnot accept the contention raised on behalf of the Revenue that the word 'extend' in the proviso to Section 139(2) implies that at the time of making the application the time allowed should not have expired. Though the Civil Procedure Code by itself does not apply to the proceedings under the Income Tax Act, we see no reason why a principle of procedure evolved for doing justice to a party to the proceeding cannot be called in aid to while interpreting a procedural provision contained in the Act. Section 148 of the Code provides that where any period is fixed or granted by the court for the doing of any act prescribed or allowed by the Code, the court may, in its discretion, from time to time, enlarge such period, even though the period originally fixed or granted may have expired. Various situations can be envisaged where a party to the proceeding is prevented by circumstances beyond his control from doing the required act within the fixed period. The assessee may be able to point out that because of a sudden death in the family or because of his sudden illness of a serious nature or because he had to leave for an outside place all of a sudden or because he could not return from o....
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....Order; Dismissed by the Supreme Court vide Oder dated May 08, 2015. (iii) A.B. Sugars Limited v. The State of Punjab and others; Decided by the Punjab & Haryana High Court on September 01, 2009. 17) It was also argued that conceptually there was no difference between 'deferment' and 'extension' insofar as it related to the issue at hand which is concerned with the point of time at which Commissioner is to exercise his powers. For that, the reasons given by Karnataka High Court as well as Gujarat High Court holding that such a power gets extinguished with the expiry of normal period of limitation prescribed and, therefore, cannot be exercised after the limitation period were germane and relevant while construing the provisions of sub-section (10) of Section 11 of the Act as well and, therefore, those cases were rightly relied upon by the High Court in the impugned judgment. 18) In rejoinder, Mr. Ganguli refuted the aforesaid submissions of the learned counsel for the assessees. The arguments advanced by him was that the submission of the assessees that the Commissioner has to afford an opportunity of hearing to the dealer before extending the period of....
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....ings for assessment in question have been deferred on account of any stay order granted by any Court or any other authority shall be excluded; (b) the time during which the assessment has been deferred in any case or class of cases by the Joint Commissioner for reasons to be recorded in writing shall be excluded." 21) Clause (b) of sub-section (6) indicates that Joint Commissioner, in appropriate cases, may pass an order for deferment of Assessment Order to be passed by the Assessing Authority and once such an order is passed, that period has not to be counted while computing the period of limitation. Significantly, this provision also mandates the Joint Commissioner to record reasons for deferring the orders of assessment. In essence, therefore, the purport and objective behind the provisions in Punjab Act as well as in Karnataka Act remains the same. By making any order of deferment under sub-section (6) of Section 12 of Karnataka Sales Tax Act, the Joint Commissioner is, in fact, achieving the same purpose of granting more time to the Assessing Officer to pass the Assessment Order. Same is the purpose behind sub-section (11) of Section 10 of the Punjab Act. In view t....
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....right to exercise such a power at any time even much after the last date of assessment. In the instant appeals itself, when the last dates of assessment were 30th April, 2004, 30th April, 2005, 30th April, 2006 and 30th April, 2007, order extending the time under Section 11(10) of the Act were passed on August 17, 2007, August 17, 2007, August 17, 2007 and May 25, 2007 respectively. Thus, for the Assessment Year 2000-2001, order of extension is passed more than three years after the last date and for the Assessment Year 2001-2002, it is more than two years after the last date. Such a situation cannot be countenanced as rightly held by the High Court. When the last date of assessment in respect of these Assessment Years expired, it vested a valuable right in the assessee which cannot be lightly taken away. As a consequence, sub-section (11) of Section 10 has to be interpreted in the manner which is equitable to both the parties. Therefore, the only way to interpret the same is that by holding that power to extend the time is to be exercised before the normal period of assessment expires. On the aforesaid interpretation, other arguments of Mr. Ganguli lose all significance. Argument ....