Sales Tax Officer, Circle I, Jabalpur vs Hanuman Prasad

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1966 Supreme(SC) 271

SUPREME COURT OF INDIA
J.C. SHAH, V. RAMASWAMI AND V. BHARGAVA JJ.
The Sales-tax Officer, Circle I, Jabalpur, Appellant
Versus
Hanuman Prasad, Respondent.
Civi1 Appeal No. 548 of 1965, D/-11-l0-1966.
Advocates appeared
Mr. A. P. Sen, Advocate General Madhya Pradesh, (Mr. I. N. Shroff, Advocate, with him), for Appellant; M/s. Yogeshwar Prasad and M. V. Goswami, Advocates, for Respondent.

Advocates:
A.P.SEN, I.M.SHROFF, M.V.GOSWAMY, YOGESHAR PRASAD

Headnote:(1) Sales Tax - General Sales Tax Act, 1958 (M.P.) - S. 52 Proviso-notice issued and return filed under the repealed Act before the commencement of the new Act - assessment made after the commencement of the new Act - the assessment is under the repealed Act - rights and liabilities under the repealed Act saved by the proviso to section 52 of the new Act.
       Where the notice was issued under the repealed Act and the return was also filed there under before the new Act came into force, but the actual order of assessment was passed shortly after the new Act came into force, such assessment shall be deemed to be under the repealed Act. The liability and right to be assessed under the repealed Act was saved by the proviso to section 52 of the new Act.
       The rights and liabilities, which had been acquired or incurred under the repealed Act, included the right or liability to be assessed in accordance with the provisions of the repealed Act in respect of turnover of sales effected during the time when that Act was in force. The repealed Act laid down that turnover was taxable, how it was to be computed, and at that rate the tax was to be charged. These provisions clearly created rights as well as liabilities of dealers. Those rights and liabilities were thus preserved by S. 52 of the new Act. [Para 3
       (2) Sales Tax - General Sales Tax Act, 1958 (M.P.) - S. 19 (1), Proviso - assessment under the repealed Act - period of re-assessment is as provided in the repealed Act - case under the C.P. & Berar Act - period is three years and not five years - effect of amendment in section 19 of the new Act.
       (3) Sales Tax - General Sales, Tax (Second Amendment) Act, 1963 (M.P.) - Ss. 3 and 5 - effect of amendment in S. 19 of the principal Act.
       Where the assessment was made under the C.P. and Berar Sales fax Act, 1947, a notice for reassessment on the ground of under - assessment, escapement or wrong deduction has to be sent within three years as provided in section 11 A (1) of that Act, even though the assessment was made after the new Act came into force. The proviso to section 19 (1) of the new Act is applicable to such a case, which makes the limitation provided in the repealed Act applicable to such cases [Para 3
       The amendment made in section 19 (1) by section 3 of the M.P. General Sales Tax (Second Amendment) Act, 1963 and made retrospective by section 5 thereof, does not change the position By this amendment the proviso to section 19(1) was not deleted, and this made the limitation provided in the repealed Act applicable to reassessment of cases assessed under the repealed Act. Though the amendment was made retrospective, but that also is immaterial, because, even after the amendment, the provision contained in the proviso had to prevail over the principal clause of section 19 (1) [Para 5
       (4) Interpretation of Statutes - Proviso-object of.
       It is well recognised that a proviso is added to a principal clause primarily with the object of taking out of the scope of that principal clause what is included in it and what the Legislature desires should be excluded. [Para 5
       (5) Interpretation of Statute - vested right under a repealed Act - right of not being burdened with a liability after a specified period - is a vested right.
       (6) Sales-tax - General Sales - Tax Act, 1958 (M.P.) - S. 52, Proviso - Sales Tax Act, 1947 (C.P. and Berar) - S. 11-A (1) - right not to be reassessed after three years under the 1947, Act - is a right saved by the proviso to section 52 of the 1958 Act.
       Section 11-A (1) of the repealed Act itself created a right in favour of the respondent not to be assessed in respect of turnover that was under - assessed or had escaped assessment after the expiry of the period prescribed in that subsection. The proviso to section 52 of the new Act preserved this right. 1963 JLJ 456 CONFIRMED. [Para 4

Judgment

BHARGAVA, J. : The respondent was a registered dearer carrying on the business of selling goods liable to sales-tax under the Central Provinces and Berar Sales Tax Act, 1947 (hereinafter referred to as "the repealed Act"). For the period from 3rd November, 1956 to 23rd October l957, the respondent filed his return which was not accepted by the Sales-tax officer, who, on March 10, 1959, issued a notice in Form XII to the respondent. Subsequent to this notice, on May 23, 1959, the turnover of the sales of the respondent was assessed to tax under S. 11 (4) (a) of the repealed Act. In the meantime, on April 1, 1959, the Madhya Pradesh General Sales Tax Act, 1958 (Act No. II of 1959) (hereinafter referred to as "the new Act") came into force. On October 23, 1962, the Sales-tax Officer discovered that part of the turnover of the respondent for the period mentioned above had escaped assessment and issued a notice under S. 19 (1) of the new Act. The respondent raised a preliminary objection that his sales had been assessed under the repealed Act, under which the limitation of a period of three years was prescribed by Section 1-A for assessment of escaped turnover. The Sales-tax Officer rejected that objection by his order dated 29the October, 1962, and decided to proceed with the reassessment. There upon, the respondent moved a petition under Articles 226 and 227 of the "Constitution before the High Court of Madhya Pradesh, Jabalpur, praying for the quashing of the order of the Sales-tax Officer dated 29 the October, 1962, and the notice dated 23rd October, 1962. The High Court held that the period of limitation governing the proceedings instituted by the notice dated 23rd October, 1962, was that laid down under S. 11-A (1) of the repealed Act, so that the proceedings were barred by time. The notice dated 23rd October, 1962, and the subsequent order dated 29th October, 1962 were consequently quashed. The Sales-tax Officer of Jabalpur has now come up to this Court in this appeal by special leave against this order of the High Court.

2. Section 19 (1) of the new Act, on which reliance was placed by the Sales-tax Officer reads as follows:-

"19. (1) Where an assessment has been made under this Act and the Commissioner, in consequence of any information which has come into his possession, is satisfied that any sale or purchase of goods chargeable to tax under this Act, during any year, has been under-assessed or has escaped assessment or assessed at a lower rate or any deduction has been wrongly made therefrom, the Commissioner may, at any time within five calendar years from the expiry of such year, after giving the dealer a reasonable opportunity of being heard and after making such enquiry as he considers necessary, proceed, in such manner as may be prescribed, to reassess the tax payable on any such sale or purchase and the Commissioner may direct that the clearer shall pay, by way of penalty in addition to the amount of tax so assessed, a sum not exceeding that amount:

Provided that in the case of an assessment made under any Act repealed by Section 52, the period of re-assessment on the ground of under-assessment, escapement or wrong deduction shall be as provided in such Act notwithstanding the repeal thereof."

The contention on behalf of the Sales-tax Officer was that for the sake of assessing the escaped turnover, the provision applicable was that contained in the main clause of S. 19 (1), and that the proviso was not applicable in this case. On the other hand, the respondent s contention was that, in his case, the assessment had been made under the repealed Act, so that the proviso was applicable and the period of limitation for issue of a valid notice? was that laid down in S. 11-A (1) of the repealed Act which is as follows:-

"11- A. (1) If in consequence of any information which has come into his possession, the Commissioner is satisfied that any turn over of a dealer during any period has been under-assessed or has escape

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