Bombay High Court
Siemens India Ltd. vs The State Of Maharashtra on 5 March, 1986
Equivalent citations: [1986]62STC40(BOM)
Author: Sujata V. Manohar
Bench: M.H. Kania, Sujata V. Manohar
JUDGMENT Sujata V. Manohar, J.
1. The applicant M/s. Siemens India Limited, are registered dealers under the Bombay Sales Tax Act, 1959. The applicants filed their returns under the Bombay Sales Tax Act, 1959, for the period 1st April, 1964, to 31st March, 1965, within the prescribed period, that is to say, before 14th May, 1965. Thereafter, the Sales Tax Officer by his assessment order dated 20th April, 1967, granted to the applicants a set-off to the tune of Rs. 88.237. In respect of this assessment order of 20th April, 1967, the Assistant Commissioner of Sales Tax, in exercise of his power of suo motu revision under section 57 of the Bombay Sales Tax Act, 1959, issued a notice dated 1st March, 1972, proposing to revise the order of the Sales Tax Officer granting the set-off. Thereafter the Assistant Commissioner, by his order dated 30th April, 1972, revised the order of the Sales Tax Officer and reduced the amount of set-off by a sum of Rs. 8,902.12. The applicants filed an appeal from this order before the Deputy Commissioner of Sales Tax. The appeal was rejected. But the Deputy Commissioner reduced the disallowance from Rs. 8,902.12 to Rs. 4,254.12. The applicants filed a revision application before the Tribunal. The Tribunal, however, by its order dated 5th April, 1979, confirmed the order of the Deputy Commissioner. From the order of the Tribunal the following question has been referred to us :
Whether, in the facts and circumstances of the case, i.e. where the assessee had filed his returns during the period 1st April, 1964, to 31st March, 1965, and the order of assessment was passed on 20th April, 1967, was the Tribunal right in holding that the notice served on 14th March, 1972, under section 57 of the Act for suo motu revision was not barred by limitation ?
To appreciate the question referred to us it is necessary to set out the provisions of section 57 of the Bombay Sales Tax Act, 1959, as amended from time to time :
"57. Revision. - (1) Subject to the provisions of section 56 and to any rules which may be made in this behalf -
(Section as in force from 1st January, 1960, to 30th June, 1965) :
(First amendment)
(a) the Commissioner, of his own motion within two years from the date of any order passed by any officer appointed under section 20 to assist him, may call for and examine the record of any such order and pass such order thereon as he thinks just and proper;
(Section as in force from 1st July, 1965, to 30th April, 1970) :
(Second amendment)
(a) the Commissioner, of his own motion within five years from the date of any order passed by any officer appointed under section 20 to assist him, may call for and examine the record of any such order and pass such order thereon as he thinks just and proper;
(Section as in force from 1st May, 1970, to date) :
(Third amendment)
(a) the Commissioner may, of his own motion, call for and examine the record of any other passed (Including an order passed in appeal) under this Act or the Rules made thereunder by any officer or person subordinate to him, and pass such order thereon as he thinks just and proper :
Provided that, no notice in the prescribed form shall be served by the Commissioner under this clause after the expiry of three years from the date of the communication of the order sought to be revised, and no order in revision shall be made by him hereunder after the expiry of five years from such date.
.........................."
For the sake of convenience, the three amended sections 57 are referred to datewise as 1st amendment, 2nd amendment and 3rd amendment. Thus, when the applicants filed their returns the period which was prescribed under section 57 of the Bombay Sales Tax Act for a suo motu revision by the Commissioner was 2 years from the date of the assessment order. When the assessment order was passed (on 20th April, 1967), the period prescribed under section 57 for a suo motu revision was five years from the date of the order. When the revision notice was issued by the Commissioner (on 1st March, 1972), the period prescribed had been modified. Under the relevant provisions of section 57 then in force, no notice could be served by the Commissioner for a suo motu revision after the expiry of 3 years from the date of the communication of the order sought to be revised. Moreover, no order in revision could be made after the expiry of 5 years from such date. The dispute before us is about the period of limitation which is applicable to the suo motu revision proceedings undertaken by the Commissioner in the present case. According to the respondents the law in force at the date of the assessment order is the law applicable to the revision proceedings. On the date of the assessment order the 2nd amendment of section 57 was in operation. Hence the order could be revised within five years of the assessment order. The present revision was within five years of the assessment order and was therefore not barred by limitation. The applicants dispute this contention. According to them either the 1st or the 3rd amendment is applicable, i.e., the law in force at the time of submission of the returns or the law in force at the date of the commencement of revision proceedings. In either case the revision proceedings are barred by limitation.
2. In order to determine the law which applies to such revision proceedings it is necessary to make a distinction between substantive laws and procedural laws. Broadly speaking substantive laws determine the rights and liabilities of the parties concerned. Procedural laws govern the manner in which such rights or obligations are to be enforced or realized. While in principle the distinction between these two types of laws is clear, it is often difficult to apply the principle in practice. Demarcation of a dividing line between these two types of laws is not always easy; nor is it easy to classify rights as wholly substantive or wholly procedural. When these rights are sought to be exercised, substantial rights get crystallised as on the date when a proceeding to enforce these rights is initiated. Any subsequent alteration in such rights will not affect the parties concerned, unless it is expressly or impliedly so prescribed. But procedural rights do not get crystallised in this fashion. If procedure changes, the changed procedure will apply.
3. Substantive rights of an assessee are therefore the rights as on the date of the initiation of assessment proceedings. Even if these rights are amended or altered subsequently, such alterations and amendments will not affect the substantive rights which govern the assessment proceedings. Procedure for enforcement of these rights, however, has to be determined with reference to the law in force at the time when such rights are sought to be enforced. Therefore, if there are any amendments or alterations in the procedural law in the course of the assessment proceedings, the altered procedural law will be applicable.
4. When do assessment proceedings commence ? Assessment proceedings against a registered dealer commence when he files his return and against an unregistered dealer, when the Commissioner calls upon him to file a return of his turnover. When the registered dealer has not filed a return the proceedings commence when the Commissioner issues a notice. In the case of Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh reported in [1953] 4 STC 114 (SC) the Supreme Court was required to consider when assessment proceedings are initiated or when a "lis" arises. The Supreme Court in that case was required to consider the provisions of the Central Provinces and Berar Sales Tax Act, 1947. The question in that case related to the right of appeal. It observed : "Whenever there is a proposition by one party and an opposition to that proposition by another a 'lis' arises. It may be conceded, thought not deciding it, that when the assessee files his return a 'lis' may not immediately arise, for under section 11(1) the authority may accept the return as correct and complete. But if the authority is not satisfied as to the correctness of the return and calls for evidence, surely a controversy arises involving a proposition by the assessee and an opposition by the State ......... For the purposes of the accrual of the right of appeal the critical and relevant date is the date of initiation of the proceedings and not the decision itself". Under the proviso to section 22(1) of the Central Provinces and Berar Sales Tax Act, 1947, as it stood prior to its amendment, an aggrieved assessee was entitled to appeal provided the paid such amount of tax as he might admit to be due from him. After the amendment an appeal had to be accompanied by satisfactory proof of payment of tax in respect of which the appeal had been preferred. Assessment proceedings were initiated prior to the amendment of the section, but the order of assessment was made after the section was amended. The assessee contended that the right of appeal was a substantive right which the assessee had acquired under the unamended section 22(1) and the subsequent amendment of that section did not take away the right of appeal without depositing the impugned amount. The Supreme Court upheld this contention.
5. The position was again discussed by the Supreme Court in the case of Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax, Nagpur, . The Supreme Court in that case was dealing with escaped assessment. Under section 11-A of the C.P. and Berar Sales Tax Act, 1947, if the Commissioner was satisfied that any turnover of a dealer for any period had escaped assessment, the Commissioner could, within 3 years from the expiry of the period proceed to assess the tax payable on such turnover. The main issue before the court was whether the assessment of the escaped turnover was within the prescribed period. To decide this issue the court discussed when assessment proceedings can be said to be initiated. It said (at page 986) :
"From the foregoing discussion it is seen that in the case of a registered dealer there are four variations in the matter of assessment of his turnover : (1) He submits a return by the date prescribed and pays the tax due in terms of the said return; the Commissioner accepts the correctness of the return and appropriates the amount paid towards the tax due for the period covered by the return. (2) The Commissioner is not satisfied with the correctness of the return; he issues a notice to him under section 11(2), and makes an enquiry as provided under the Act, but does not finalize the assessment. (3) The registered dealer does not submit a return; the Commissioner issues a notice under section 10(3) and section 11(4) of the Act. And (4) the registered dealer does not submit any return for any period and the Commissioner issues notice to him beyond three years. If the return was accepted and the amount paid was appropriated towards the tax due for the relevant period, it means that there has been a final assessment in regard to the said period. If any turnover escaped assessment, clearly it can be reopened only within the period prescribed in section 11-A. In the case where a return has been made, but the Commissioner has not accepted it, and has issued a notice for enquiry, the assessment proceedings will certainly be pending till the final assessment is made. Even in a case where no return has been made, but the Commissioner initiated proceedings by issuing a relevant notice either under section 10(3) or under section 11(4), the proceedings will be pending thereafter before the Commissioner till the final assessment is made. But where no return has been made and the Commissioner has not issued any under the Act, how can it be held that some proceedings are pending before the Commissioner when none existed as a matter a fact ?"
6. It was urged before the Supreme Court that a statutory obligation to make a return within a prescribed time would amount to initiation of proceedings. This contention was negatived by the Supreme Court. It held that proceedings will commence after the return was submitted and would continue until final order of assessment was made in regard to the said return. Once the proceedings were initiated no question of limitation will arise.
7. In the case of Regional Assistant Commissioner of Sales Tax, Indore v. Malwa Vanaspati and Chemical Company Limited the Supreme Court was required to consider in this connection the provisions of the Madhya Bharat Sales Tax Act, 1950. The Supreme Court referred to the decision of the Supreme Court in the case of Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax, Nagpur and explained it as follows :
"This court held in that case that a proceeding for assessment of sales tax remains pending from the time when it is initiated until it is determined by a final order of assessment, and the turnover or any part thereof of a dealer has not escaped assessment so long as the assessment proceeding is not completed; that a proceeding of assessment commences against a registered dealer when he files his return, and against an unregistered dealer when the Commissioner calls upon him to file the return of his turnover; and that where the registered dealer has not filed a return the proceeding commences when the Commissioner issues a notice either under section 10(3) or under section 11(4) of the C.P. and Berar Sales Tax Act, and not till then."
There are similar observations of the Supreme Court in the case of State of Punjab v. Murlidhar Mahabir Parshad reported in [1968] 21 STC 29 at page 33 (SC) where again the Supreme Court has reiterated that in the case of a registered dealer the proceedings before the Commissioner start factually when a return is made or a notice is issued.
8. Our attention in this connection was drawn by Mr. Jetly, learned Advocate for the respondents, to a decision of the Supreme Court in the case of Hardeodas Jagannath v. State of Assam . In that case the registered dealer's business were raised and thereafter a notice was issued dated 4th April, 1959, under section 19A of the Assam Sales Tax Act, 1947, for reassessment in respect of the half-yearly return periods ending 30th September, 1956, 31st March, 1957, and 30th September, 1957. Thereafter orders of reassessment were passed in July, 1959. The appellants filed an appeal against the reassessment orders. In the meanwhile section 30 of the said Act was amended as from 1st of April, 1958, as a result of which the appellants were required to pay the amount of tax assessed or other reduced amount as may be directed by Assistant Commissioner filing appeals. It was contended that the amended provisions of section 30 should be not be applied because the periods of assessment were prior to 1st of April, 1958. This contention was summarily rejected by the Supreme Court which observed that the assessment for the periods in question had been completed after the amendment Act came into force and the appeals were also filed after the amendment came into force. Hence the amended provisions would apply. This was not a case where returns had been filed by the assessee prior to the coming into effect of the amendment. In fact from the facts which are set out in that judgment it appears that the proceedings of reassessment commenced in April, 1959, after the amendment came into effect. It was not even contended before the Supreme Court that reassessment proceedings were initiated prior to the amendment. It was only contended that the period for which the dealer was being reassessed was prior to the amendment and hence the amendment did not apply. This contention was negatived by the court. This decision, therefore, does not help the respondents in any way. We also do not see how this decision can be said to overrule the decision of the Supreme Court in the case of Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh [1953] 4 STC 114 (SC) by implication, as contended by Mr. Jetly.
9. In view of these authorities, therefore, in the present case the proceedings were initiated, at any rate by 14th May, 1964, by which date all the returns for the relevant period had been filed by the assessee who are registered dealers. The substantive rights of the applicants will, therefore, have to be determined with reference to the law in force at least as in May, 1964.
10. The next question is whether the right, either of the assessee or of the department, to file an appeal or a revision is a substantive right, and whether it gets crystallised at the time of initiation of assessment proceedings. An appeal has been considered as a continuation of assessment proceedings. The right of appeal has been considered as a substantive right which gets crystallised when assessment proceedings are initiated. Hoosein Kasam Dada's case [1953] 4 STC 114 (SC) was one such case in point. Therefore, in the absence of any provision which makes a subsequent amendment retrospective, the law governing appeals is the law in force at the date of commencement of assessment proceedings. In the case of Garikapati Veeraya v. N. Subbiah Choudhry reported in [1957] SCR 488 a suit had been instituted in 1949 prior to the Constitution. In 1949 there was a right of appeal to the Federal Court since the claim in the suit was for more than Rs. 10,000. The trial court dismissed the suit and the High Court in appeal reversed that decision on 10th February, 1955, after the Constitution came into force. Application for leave to appeal to the Supreme Court was refused by the High Court on the ground that the value of the suit did not come up to Rs. 20,000. The Supreme Court, however, that the vested right of appeal was a substantive right, and although it could be exercised only in case of an adverse decision, it was governed by the law prevailing at the time of commencement of the suit and comprised all successive rights of appeal from court to court, which really constituted one proceeding. Such a right could be taken away only by a subsequent enactment either expressly or by necessary implication. Since the Federal Court was replaced by the Supreme Court the appellant could file an appeal before the Supreme Court.
11. Similarly in the case of Amar Dye Chem Ltd. v. State of Maharashtra reported in [1983] 53 STC 14 at page 33 our High Court had held that an appeal in respect of an assessment order passed before coming into force of the Bombay Sales Tax (Amendment) Act, 1971, is to be decided according to the provisions of sub-section (6) of section 55 of the Bombay Sales Tax Act, 1959, prior to the amendment. Under the previous section 55(6) an appellate authority had power to pass such order on appeal as it deemed just and proper. Under the amended section 55(6) the appellate power were set out in extenso. The court held that the change made by the Amendment Act was not a change in procedure but a change in the powers and jurisdiction of the appellate authority. The amendment did not have retrospective effect and therefore, it did not apply to the proceedings which had commenced and in which an assessment order had been passed prior to the amendment. In that case even the appeal was filed before the amended sub-section (6) of section 55 came into force. The court held that the appeal was covered by the earlier sub-section. This case is not directly in point because in this case the amendment came into effect after even the appeal was filed. Since the earlier law was in force when the appeal was filed the court held that the earlier law would cover the case.
12. The right of the Commissioner to initiate suo motu revision proceedings in respect of an assessment order is similar to a right of appeal in this context thought it may differ from a right of appeal in other regards. At the time when the assessment proceedings are initiated the assessee has a right to have these proceedings finalised in accordance with substantive law then in force. This would include a right to file an appeal if prescribed under the law then in force. It would also include a right to apply for revision or a liability to have the order revised in accordance with the substantive law then in force. But if under the law in force at the rate of date of initiation of assessment proceedings a time-limit is prescribed within which the right of revision has to be exercised is such time-limit a part of the substantive law or is it a procedural law ?
13. There are a series of authorities of various High Courts which lay down that the law prescribing a period of limitation is to be considered as procedural rather than substantive. This is however, subject to one exception. If under the existing law of limitation the right to initiate a proceeding has already become time-barred then subsequent enlargement of time by an amendment of law cannot be availed of. This is on the basis that the finality achieved as a result of proceeding becoming time-barred, is treated as a substantive right which has accrued to a party. This right cannot be taken away by a subsequent amendment. Under section 7 of the Bombay General Clauses Act, 1904, the repeal of an Act does not affect any right, privilege, obligation or liability acquired, accrued or incurred under the enactment so repealed or affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability; and such investigation, legal proceedings or remedy may be instituted, continued or enforced as if the repealing Act had not been passed.
14. The law of limitation has been considered as a procedural law. It does not not take away any right. It bars only a remedy. Where, however, a right has accrued to a party because the prescribed period of limitation has expired, this accrued right cannot be taken away by any subsequent Act which enlarges time. If any subsequent Act, however, enlarges time while the period of limitation prescribed under the old Act has not expired, the subsequent law will given the proceedings. Ordinarily, therefore, in the case of revision, the law of limitation applicable will be the law at the date when revision proceedings are initiated. The only exception is a case where the revision proceeding is barred by limitation under the old law before the amended law enlarges limitation. Even if such enlargement takes place before revision proceedings are instituted, the revision proceedings would be barred. A number of High Courts have decided to this effect. For example, in the case of Hargu Charan Srivastava v. Commissioner of Income-tax, Lucknow [1979] 119 ITR 622 the Allahabad High Court was required to consider a case where the period of limitation for initiating penalty proceedings was amended with effect from 1st April, 1971. Before the amendment the limitation period was 2 years commencing from the date of the assessment order. After the amendment the limitation was changed to 2 years commencing from the end of the financial year in which the assessment order was passed. The assessment order was passed in August, 1969. The Allahabad High Court held that the amended provisions applied observing that "the prescription of period of limitation is a matter of procedure. Any amendment in this regard is retrospective in the sense it is applicable to all those matters which are pending and which had not become closed or dead."
15. The same question was considered by a Full Bench of the Andhra Pradesh High Court in the Additional Commissioner of Income-tax, A.P. v. Watan Mechanical and Turning Works reported in [1977] 107 ITR 743. The court held that "no one has a vested and substantive right in the procedure and limitation has to be considered as a part of the procedural law as distinct from substantive law ......... The liability for tax an penalty would always remain on the assessee; but if the time prescribed under the Act expires, the liability cannot be imposed by the authorities, the reason being that the assessee should not be subjected to unending hardship. However, before the limitation prescribed expires, if the same is enlarged, the limitation being a procedural one, the extended period of limitation will apply to such proceedings." The court cited with approval a decision of the Gujarat High Court in the case of Commissioner of Income-tax v. Royal Motor Car Co. [1977] 107 ITR 753 (App) at 755 to the following effect : "It is well-settled law that as regards matters of procedure, the legislature can make changes and those changes would apply so far as limitation is concerned to pending proceedings unless a vested right has accrued to any party by reason of the old period of limitation having expired."
16. There are observations to a similar effect in the case of Additional Commissioner of Income-tax v. Raichand Amichand reported in [1983] 144 ITR 754 decided by the Madhya Pradesh High Court and in the case of Ram Kishan v. Additional Commissioner of Sales Tax reported in [1986] 61 STC 62 decided by the Delhi High Court. The latter case dealt with a revision petition filed by the petitioner under section 47 of the Delhi Sales Tax Act, 1975. The Delhi High Court held that the new Act applied. In that case however, even the assessment proceedings were initiated after the new Act had come into force and the earlier Act had been repealed. Hence in any case the revision petition was governed by the provisions of the new Act. This decision, therefore, is not of any direct assistance.
17. In the case of Commercial Taxes Officer, Special Circle I, Jaipur v. Man Industrial Corporation Ltd., Jaipur, reported in [1970] 26 STC 169 the Rajasthan High Court considered the provisions of section 15(1) of the Rajasthan Sales Tax Act, 1954, which were amended with effect from 2nd May, 1969, increasing the period for making an application to the Board of Revenue for a reference to the High Court from 60 days to 120 days. The period of limitation was increased before the right to make an application became time-barred under the old provision. The new period of limitation was held applicable.
18. The Kerala High Court has also decided to the same effect in the case of Commissioner of Income-tax, Kerala v. Kozhikode Wyanad Motor Service Ltd. reported in [1959] 37 ITR 311. Another Full Bench decision of the Andhra Pradesh High Court in the case of Allied Exports and Imports v. State of Andhra Pradesh reported in [1971] 27 STC 175 also supports this view.
19. Mr. Jetly, learned counsel for the respondents, however, relied upon a decision of the Supreme Court in the case of Bharat Barrel & Drum Mfg. Co. Private Limited v. Employees' State Insurance Corporation in support of his contention that the law prescribing a period of limitation is to be considered as a substantive law and not a procedural law. In that case the question before the Supreme Court related to interpretation of section 96(1)(b) of the Employees' State Insurance Act, 1948. Under this section power was conferred on the state to make rules "for regulating the procedure" before the Insurance Courts. In exercise of this power rules were framed by the State Government. Under rule 17 a period of limitation was prescribed for making an application to the court. The Supreme Court was required to consider whether prescription of such a period of limitation was within the scope of the rule-making power conferred under section 96. It was in this context that the Supreme Court held, looking to the language of section 96(1)(b), that the period of limitation could not be considered as a part of the procedure to be followed in proceedings before the Insurance Court. It held that rule 17 was beyond the rule-making power of the State. The decision of the Supreme Court dealt with interpretation of the provisions of section 96 of the said Act. It was only in this context that the Supreme Court considered the prescription of a period of limitation as not a part of the procedure to be followed in proceedings before the Insurance Court. In fact the court distinguished a number of cases where it is held that the law relating to limitation in international disputes is lex fori because it is a procedural law. This decision, therefore, turns on the interpretation of the language of section 96. It does not help the respondents.
20. There can however, be a statute law under which a right may cease to exist after a certain period. The language used may be used may be such that instead of bearing the remedy after a period of time, the law may provide that the right itself would cease to exist after a certain period. In such a case the law may confer a substantive right. Thus in the case of Commissioner of Sales Tax, Madhya Pradesh v. Amarnath Ajitkumar of Bhind the Supreme Court was required to consider the provisions of section 12(1) of the Madhya Bharat Sales Tax Act, Samvat 2007, which was in force when the assessment proceedings commenced. It provided as follows : "The Commissioner may in his discretion at any time suo motu or being moved by the assessing authority, call for and examine the records of any proceedings under this Act ......... Provided further that the Commissioner shall not revise an order which has been made more than two years previously." Interpreting this provision the Supreme Court observed : "From the second proviso, it is clear that the Commissioner is precluded from revising an order had been made more than two years previously. That proviso did not lay down any rule of limitation. But it took away the power of the Commissioner to revise any assessment after the prescribed period. Thereafter the assessment became final and conclusive as against the department as well as the assessee." The Supreme Court refused to apply the provisions of the later Madhya Pradesh Sales Tax Act, 1958, which repealed the earlier Act, and which were in force when the revision commenced.
21. In the present case section 57 of the Bombay Sales Tax Act as in force from 1st January, 1960, to 30th June, 1965 (i.e., 1st amendment), provides that the Commissioner may on his own motion, within two years from the date of any order call for and examine the records of such order. This provision is quite differently worded from the provision which the Supreme Court had to consider in the case of Commissioner of Sales Tax, Madhya Pradesh v. Amarnath Ajitkumar of Bhind . Section 57 of the Bombay Sales Tax Act, as in force from 1st January, 1960, to 30th June, 1965, does not lay down that the Commissioner's right to revise will come to an end after a period of 2 years. It merely proscribes the period within which he is required to exercise this right. Therefore, this provision must be considered as purely procedural.
22. The 2nd amendment of section 57, as in force from 1st July, 1965, to 30th April, 1970, is in the same language as the first amendment, save and except that the period of 2 years is enlarged of 5 years. The section as in force during this period must therefore, also be considered as procedural.
23. Under the 3rd amendment of section 57 of the Bombay Sales Tax Act, as in force from 1st May, 1970, onwards, this position is made even clearer. The first part of section 57 gives to the Commissioner the power to revise of his own motion, any other including an order in appeal passed by any officer or officers subordinate to him. The proviso, however, prescribes that no notice of such revision shall be served by the Commissioner after the expiry of 3 years from the date of the communication of the order sought to be revised. This provision requiring a notice to be served within 3 years as aforesaid, clearly deals with the procedure for revision. The proviso further goes on to say that no order in revision shall be made by him after the expiry of 5 years from the date of the communication of the order sought to be revised. This part preserves broadly the earlier period of limitation except for changing the starting point of limitation to the date of communication of the order. The amended section 57 is also thus procedural. At no relevant point of time did section 57 take away any substantive right after a lapse of time. The provisions of section 57, therefore, do not fall within the ratio of the Supreme Court in the case of Commissioner of Sales Tax, Madhya Pradesh v. Amarnath Ajitkumar of Bhind . The submission of Mr. Jetly, therefore, that at the time of the assessment order there was any substantive right in the Commissioner to revise the order of his own motion within 5 years of the date of the assessment must be rejected.
24. Mr. Jetly has also relied upon a decision of the Patna High Court in the case of Vishanji v. Bihar reported in [1961] 12 STC 226 which dealt with the Bihar Sales Tax Act, 1947. Under section 24(4) of the Bihar Sales Tax Act, 1947, there was a power given to the Commissioner to revise any order passed under the Act. No period of limitation was prescribed under the Act. The Act was subsequently amended by Bihar Act 7 of 1951, as a result of which no proceeding for revision could be initiated after the expiry of 4 years from the date of the assessment order. In the case before the Patna High Court the order of assessment was passed on 8th August, 1949, before the amendment. The Commissioner of Sales Tax revised the assessment by order dated 11th August, 1954. The Patna High Court held that the right of revision vested in the Commissioner at least on 8th August, 1949, when the order of assessment was made. This right could not be affected by the subsequent amendment of 1951 unless the amendment was made retrospectively and hence the order in revision dated 11th August, 1954, was not barred by limitation. For reasons which are set out earlier, we respectfully differ from the view taken by the Patna High Court. In fact from the decision it is not clear when the proceedings for revision commenced. The amended section provides a period of 4 years from the date of the assessment order for initiation of revision proceedings. The judgment has proceeded on the basis that the right of revision is a substantive right. It has however not considered whether the period of limitation prescribed for revision has to be considered as procedural or not. In our view while the right of revision may be substantive, the law prescribing a period of limitation for exercising the right of revision has to be considered as procedural. We find support for this view in decisions of several High Courts. We, therefore, respectfully differ from the decision of the Patna High Court for reasons set out earlier.
25. In the premises, the relevant law applicable in the present case at the time when the Commissioner issued notice of suo motu revision, was the period of limitation in force on that day, i.e. section 57 as amended on 1st May, 1970 (3rd amendment). The Commissioner was, therefore, required to issue a notice within 3 years of the communication of the assessment order. In the present case the assessment order was passed on 20th April, 1967. There is no dispute that the notice of the Commissioner, which is dated 14th March, 1972, is beyond the period prescribed under the 3rd amendment to section 57. It is therefore time-barred.
26. In the premises we answer the question referred to us in the negative and against the department.
27. The respondents will pay to the applicants costs of the reference. The deposit of Rs. 100 made by the assessee to be refunded to the assessee.
28. Reference answered in the negative.