Karnataka High Court
Mahaveer Drug House vs Assistant Commissioner Of Commercial ... on 13 November, 1990
Equivalent citations: [1991]82STC388(KAR)
JUDGMENT K. Shivashankar Bhat, J.
1. The petitioner is an assessee under the Karnataka Sales Tax Act, 1957, as well as the Central Sales Tax Act, 1956, for the year ending 20th October, 1979. There was an assessment which was concluded on 14th July, 1980. However, under annexure A dated 25th May, 1987, the respondent issued a notice purporting to invoke section 12-A of the Karnataka Sales Tax Act, 1957, which empowers the assessing authority to initiate proceedings to assess the escaped turnovers.
2. Earlier, time within which the original assessment or even a reassessment could be brought within this provision was 5 years from the expiry of the year to which the tax relates. That means in respect of the petitioner, this provision could not have been invoked after 20th October, 1984. This provision was amended by the Act 27 of 1985 increasing the period of limitation to 10 years from 5 years and now the time is revised to 8 years by another amendment. The assessing authority has invoked the provision on the assumption that he had the power to initiate proceedings under the amended provision which enabled him to initiate action at any time within 10 years from 20th October, 1979 and, therefore, the notice issued in May, 1987, was within the period of limitation. Mr. B. P. Gandhi, the learned counsel for the petitioner, contended that the limitation is essentially a fetter imposed by the Legislature against the Revenue from initiating fresh proceedings and reopen the concluded assessments and this limitation is necessary in the public interest so that the assessee may not be troubled once again.
3. A concluded matter results not only in finality, but confers immunity on the assessee from being taxed again. A power to reopen the assessment on the ground that the turnover has escaped is an exception to the immunity granted to the assessee. Such power has to be strictly construed.
4. So long there is a possibility of reopening any assessment for any reason and no immunity has accrued to the assessee, the existing period of limitation may be enlarged by legislation. But once there is immunity, unless the Legislature amends the law retrospectively or declares any provision as applicable to the concluded proceedings also by clear and specific words, it is not possible to read into those provisions a power enabling the assessing authorities to undo what has become final.
5. In the instant case, by 21st October, 1984, immunity accrued to the petitioner against any reopening of the assessment. When Act 27 of 1985 was introduced there was nothing pending. The assessment against the petitioner had become absolutely final without any possibility of its being reopened. In these circumstances, this Act 27 of 1985 cannot be construed as enabling the assessing authorities to initiate fresh action under section 12-A even though the period of limitation was enlarged to 10 years. The said period of 10 years will have to be understood as applicable to cases which have not become final and wherein the assessees have not obtained any immunity by lapse of time.
6. The same principle comes out of the decision of the Andhra Pradesh High Court reported in the case of Warangal District Co-operative Marketing Society Ltd. v. State of Andhra Pradesh [1983] 54 STC 385. The facts and principles be found are as follows :
"What emerges from these decisions is that where the right to revise was lost under the unamended law the amended provision could not revive that right. If the assessment had become final in the hands of the assessing authority, before the amended provision came into force, it cannot be reopened under the amended provision. Rights dead cannot be revived. Assessment finalised cannot be reopened. The case on hand relates to the year 1972-73 ending by 31st March, 1973. Under the unamended section, the assessing authority was entitled to reopen the assessment within 4 years next succeeding assessment (year), i.e., before 31st March, 1977. Beyond that period the reassessment was barred. Section 14(4) was amended and the new section 14(4-A) was brought into effect on 17th January, 1978, prescribing a different period of limitation. Since the assessment had become barred under the old provision and the right of the assessing authority to revise was extinguished the new section 14(4-A) does not govern the case."
7. Consequently this writ petition will have to be allowed. The notice is accordingly set aside. The writ petition is allowed. The rule is made absolute.
8. Writ petition allowed.