TaxTMI 
TaxTMI 
2016 (3) TMI 331
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....t 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 to extend the period of three years for passing th....
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....sioner 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 prescribed for furnished the last return in respect of such pe....
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....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 under this section shall be without prejudice to any penalty imposed under this Act. (10) The Commissioner, may for reasons to....
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.... 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 reading of meaning of expression 'deferment' and 'extension' of time as contained in Black's Law Dictionary will clearly bring out the dif....
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....ime, 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 extend the time for filing of the Income Tax return by the assessee even after the expiry of the time originally granted, this Court held as follows: "9. In this context, the question whether a belated application could b....
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....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 outside in spite of his best efforts, or for other good reasons, as the case may be, he was not able to file the return within time............" [Emphasis supplied] 14) Mr. Ganguli also drew sustenance from the Arbitration Act, 1940 which ga....
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.... '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 limitation does not arise in the present case as this was not the issue raised in the Courts below. He argued that the question to be decided in these appeals was as to whether the power under sub-section (10) of Section 11 of the Act could be exercised on the expiry of the perio....
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....hall 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 thereof, it may not be appropriate to go into the nuanced distinction between "deferment" and "extension" as per the definitions contained Black's Law Dictionary in the given situation, which is dealt with in the instant appeals. 22) Even otherwise, it is important to understand the ratio laid down in t....