TaxTMI 
TaxTMI 
2015 (8) TMI 1389
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....ONER: (BY SRI G. RABINATHAN AND SRI M. THIRUMALESH, ADVOCATES), (BY SRI. ARVIND KAMATH, ADVOCATE), (BY SRI C.L. MOHAN MAIYA, ADVOCATE SRI A. KESHAVA BHAT, ADVOCATE), (BY SRI. K.S. HARISH, ADVOCATE), (BY SRI. SURYAKANTH C.S., ADVOCATE), (BY SRI T.N. KESHAVAMURTHY, ADVOCATE), (BY SRI K.J. KAMATH, ADVOCATE) RESPONDENTS (BY SRI A.S. PONNANNA, ADDL. ADVOCATE GENERAL A/W SRI. T.K. VEDAMURTHY, HCGP), FOR R-1; NOTICE TO R-2 IS SERVED) O R D E R In these batch of writ petitions, the petitioners have sought for a declaration in the nature of writ of certiorari to declare the first and second provisos to sub-section (1) of Section 40 of the Karnataka Value Added Tax Act, 2003 substituted by Act No.54/2013 with effect from 01.04.2005 as being beyond legislative competence and thus, illegal, invalid and ultra vires of the Constitution of India and consequently, to quash the respective re-assessment orders. 2. I have heard the arguments of Sriyuths Aravind Kamath, Keshava Bhat A, Thirumallesh M, Suryakanth C.S., T.N.Keshava Murthy and K.J. Kamath appearing for petitioners and Sri A.S. Ponnanna, learned Addl. Advocate General appearing along with Sri T.K. Vedamurthy HCGP for respondent - Stat....
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....rospective effect as law cannot be revived after the expiry of the limitation period for the reason that when the law itself was not in force at the time of amendment, any amendment made thereto by substitution also cannot be given effect and the position earlier to the amendment stands unaltered. In support of their submissions, they have relied upon the following judgments: (1) (2008) 9 SCC 306 T. KALIAMURTHI AND ANOTHER vs. FIVE GORI THAIKKAL WAKF AND OTHERS (2) 254 ITR 772 (2002) K.M. SHARMA vs. INCOME TAX OFFICER, WARD 13(7), NEW DELHI (3) 82 STC 388 1991 MAHAVEER DRUG HOUSE vs. ASSISTANT COMMISSIONER OF COMMERCIAL TAXES, ASSESSMENTS-II, BANGALORE (4) 260 ITR 548 2003 NATIONAL AGRICULTURAL CO- OPERATIVE MARKETING FEDERATION OF INDIA LTD. AND ANOTHER vs. UNION OF INDIA AND OTHERS (5) (1977) 1 SCC 643 STATE OF MAHARASHTRA vs. THE CENTRAL PROVINCES MANGANESE ORE CO. LTD., (6) 72 ITR 594 1969 J.P. JANI, INCOME TAX OFFICER, CIRCLE IV, WARD G, AHMEDABAD, AND ANOTHER vs. INDUPRASAD DEVSHANKER BHATT 6. Per contra, Sri A.S.Ponnanna, learned Additional Advocate General would contend that the legislature has power to legislate prospectively as well as retrospectively and unless th....
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.... from examining the claim on merits since the petitioners have efficacious and alternate remedy available by way of appeal. Hence, he prays for dismissal of the writ petitions. In support of his submission, he has relied upon the following judgments; (1) (1996) 5 SCC 626 COMMERCIAL TAX OFFICER AND OTHERS vs. BISWANATH JHUNJHUNWALLA AND ANOTHER (2) (1999) 2 SCC 77 ADDL. COMMISSIONER (LEGAL) AND ANOTHER vs. JYOTI TRADERS AND ANOTHER (3) (1973) 1 SCC 216 M/S HIRALAL RATTANLAL ETC., vs. STATE OF UTTAR PRADESH AND ANOTHER ETC., (4) (2008) 9 SCC 306 T. KALIAMURTHY AND ANOTHER vs. FIVE GORI THAIKKAL WAKF AND OTHERS (5) (2002) 4 SCC 339 K.M. SHARMA vs. INCOME TAX OFFICER, WARD 13(7), NEW DELHI. 9. Having heard the learned Advocate appearing for the parties, this Court is of the considered view that it will have to be examined as to: "Whether Section 40 of the Act suffers from the vice of constitutional validity on any ground whatsoever and as such, the consequential re- assessment orders passed by the jurisdictional assessing Officers are liable to be set aside or quashed?" ANALYSIS OF STATUTORY PROVISIONS: 10. Karnataka Sales Tax Act, 1957 came to be replaced by the Karnataka Va....
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.... five years after the end of the prescribed period." By Act No.17/2012 Section 40 of the Principal Act came to be amended with effect from 01.04.2012 and sub- section (1) and (2) came to be substituted as under: "40. Period of limitation for assessment: (1) An assessment under Section 38 or re-assessment under Section 39 of an amount of tax due for any prescribed tax period shall not be made after five years after the end of the prescribed tax period. Provided that an assessment or reassessment relating to any tax period upto the period ending 31st day of March, 2007, shall be made within a period of eight years after the end of the prescribed tax period. Provided further that an assessment or reassessment relating to any tax period commencing from 1st day of April, 2007 upto the period ending 31st day of March, 2012 shall be made within a period of seven years after the end of the prescribed tax period. (2) Notwithstanding anything contained in sub-section (1), if any tax is, not paid by a dealer who has failed to get registered though liable to do so or fraudulently evaded attracting punishment under Section 79, an assessment or reassessment may be made within eight years f....
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.... AND OTHERS reported in (2004) 8 SCC 1 to the following effect: "24. The substitution of one text for the other pre-existing text is one of the known and well-recognised practices employed in legislative drafting "Substitution" has to be distinguished from "supersession" or a mere repeal of an existing provision. 25. Substitution of a provision results in repeal of the earlier provision and its replacement by the new provision (see Principles of Statutory Interpretation, ibid., p.565). If any authority is needed in support of the proposition, it is to be found in West U.P. Sugar Mills Assn., Vs State of U.P., State of Rajasthan Vs Mangilal Pindwal, Koteswar Vittal Kamath Vs K. Rangappa Baliga and Co., and A.L.V.R.S.T Veerappa Chettiar Vs S. Michael. In West U.P. Sugar Mills Assn., case a three-Judge Bench of this Court held that the State Government by substituting the new rule in place of the old one never intended to keep alive the old rule. Having regard to the totality of the circumstances centring around the issue the Court held that the substitution had the effect of just deleting the old rule and making the new rule operative. In Mangilal Pindwal case this court upheld the....
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....shall be deleted and a new provision substituted. If there is both repeal and introduction of another provision in place thereof by a single exercise, the expression `substituted' is used. It is held such deletion has the effect of the repeal of the existing provision and also provides for introduction of a new provision. 14. Keeping these principles in mind, when the impugned provisions are examined, it would be clear that the State Legislature while amending Section 40 of the Act repealed the earlier amendment made to Section 40 of the Act with effect from 01.04.2011 and substituted the new provision of law namely Act No.17 of 2012 in its place. By virtue of such substitution, the period of limitation of five years for assessment made under Section 38 or reassessment made under Section 39 stood enhanced to eight years relating to any tax period upto the period ending 31st March, 2007 and for the period commencing from 01.04.2007 to the period ending 31st March, 2012, it was enhanced to seven years. Same has been impugned on the ground that it enables the prescribed authority to reopen the assessment already concluded and which had attained finality and which could not have been ....
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....on 149 to enable authorities to reopen assessments not only on the basis of orders passed in proceedings under the IT Act but also on order of a Court in any proceedings under any law has to be applied prospectively on or after 1.4.1989 when the said amendment was introduced to sub-section (1). The provision in sub-section (1) therefore can have only prospective operation to assessments, which have not become final due to expiry of period of limitation prescribed for assessment under Section 149 of the Act." 18. Under some what similar circumstances, the issue relating to re-opening the assessment under the provisions of the amended Rule namely, Bengal Sales Tax Rules, 1941 came up for consideration before the Hon'ble Apex Court in the case of COMMERCIAL TAX OFFICER AND OTHERS vs BISWANATH JHUNJHUNWALLA AND ANOTHER reported in (1996) 5 SCC 626 whereunder the assessments concluded on 17.02.1969 and 26.03.1969 was sought to be re-opened on 07.11.1974 under the provisions of the amended sub-rule (5) of Rule 80. The said Rule prior to amendment and subsequent to amendment was as under: Prior to amendment: "80.(5) The Commissioner or any other authority to whom power in this behalf h....
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....ssioner (or other authority to whom power in this behalf has been delegated by the Commissioner) from revising of his own motion any assessment made or order passed under the Act or the rules if the assessment has been made or the order has been passed more than six years previous to 1-11-1971. Put conversely, with effect from 1-11-1971, Rule 80(5)(ii) permits the Commissioner (or other authority) to revise of his own motion any assessment made or order passed under the Act or the rules provided the assessment has not been made or the order passed more than six years previously. This being the plain meaning, the said Notification must be given full effect. Full effect can be given only if the said Notification is read as being applicable not only to assessments which were incomplete but also to assessments which had reached finality by reason of the earlier prescribed period of four years having elapsed. Where language as unambiguous as this is employed, it must be assumed that the legislature intended the amended provision to apply even to assessments that had so become final: if the intention was otherwise, the legislature would have so stated." 19. A plain reading of the above ....
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.... a proposition notice dated 25.11.2013 on the ground that he desires to satisfy himself that the returns filed for the tax period 2006-07 under the CST Act, 1956 are in accordance with prescribed Rules. Thereafter, re-assessment order came to be passed on 25.03.2014 (Annexure-A) which has been questioned as one barred by limitation prescribed under Section 40 of the Act and without jurisdiction. For the tax period ended on March, 2007, the limitation for assessment under Section 38 or re-assessment under Section 39 was five years which was to end on 31.03.2012. By Act No.12/2011 the words "four years" found in clause (a) of sub-section (1) was substituted with the words "five years". Thus, the period of four years has got enlarged to five years and as per sub-section (1) of Section 40, the limitation existed upto 31.03.2012. sub-section (1) of Section 40 was substituted by Act No.17/2012 whereunder two provisos to sub-section (1) was added, whereby the period of limitation was extended to eight years and seven years respectively as provided under the said provisos. This amendment was further substituted by Act No.54/2013 which indicates that sub-section (1) of Section 40 is deemed ....
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....e language expressly so states or clearly implies, retrospectivity must be given to the provision. Under Section 34 of the Income Tax, 1922, it is the service of the notice which is sine qua non, an indispensable requisite, for the initiation of assessment or reassessment proceedings where income had escaped assessment. That is not so in the present case. Under sub-section (1) of Section 21 of the Act before its amendment, the assessing authority may, after issuing notice to the dealer and making such inquiry as it may consider necessary, assess or reassess the dealer according to law. Sub-section (2) provided that except as otherwise provided in this Section, no order for any assessment year shall be made after the expiry of 4 years from the end of such year. However, after the amendment, a proviso was added to sub- section (2) under which Commissioner of Sales Tax authorizes the assessing authority to make assessment or reassessment before the expiration of 8 years from the end of such year notwithstanding that such assessment or reassessment may involve a change of opinion. The proviso came into force w.e.f. 19-2-1991. We do not think that sub- section (2) and the proviso added ....