IMPORTANT POINT
Power to extend period of limitation must be exercised within the period.

JUDGMENT :

A.K. Sikri, J.

Leave granted.

2. In these appeals, the judgment which is impugned is passed by the High Court of Punjab & Haryana. The issue involved in these appeals is identical which pertains to the interpretation that is to be accorded to sub-section (10) of Section 11 of Punjab General Sales Tax Act, 1948 (hereinafter referred to as the “Act”). It is for this reason that all these appeals were heard together and can conveniently be disposed of by one common judgment. Since SLP (C) Nos. 21712-21717 of 2009 was taken as the lead case, for understanding the nature of lis that is involved, the factual narration can be addressed from the said appeal.

3. In these appeals, we are concerned with Assessment Years 2000-01, 2001-02, 2002-03 and 2003-04. Obviously, assessment in respect of these Assessment 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 the order of assessment for such further period as he may deem fit, after recording in writing the reasons for extending such period. When the objection was taken by the assessee that the notices were time barred, the Excise and Taxation Commissioner, Patiala passed orders dated August 17, 2007 granting extension of time. Reason given for extension of time was that the case of the assessee for the year 1999-2000 was pending with the Tribunal. This order of extension was challenged by the respondent along with the order of assessment passed by the Assessing Officer. The Tribunal, however, dismissed the appeal of the assessee vide its orders September 13, 2007 holding that since there was a power of extension conferred upon the Commissioner under Section 11(10) of the Act, the Commissioner was within his powers to extend the period. The contention of the assessee was that though there was a power of extension, such a power could be exercised only within the limitation prescribed. In other words, it was contended that when the normal period of limitation for passing assessment order by the Assessing Officer was three years, as per Section 11(3) of the Act, the power to extend the period could be exercised within the said period of three years and not after the expiry of limitation period. This plea of the assessee was rejected by the Tribunal.

6. The assessee took up the matter further by filing appeals before the High Court. Here, the assessee has succeeded in its submission as the High Court of Punjab and Haryana vide impugned judgment dated September 26, 2008 has held that once the period of limitation expires, the immunity from subjecting itself to the assessment sets in and the right to make assessment gets extinguished. Therefore, when the period of limitation prescribed in the Act for passing the assessment order expires, thereafter, the Commissioner is debarred from exercising his powers under sub-section (10) of Section 11 of the Act and cannot extend