1986 Supreme(Bom) 85

IN THE HIGH COURT OF BOMBAY
M.H. Kania, Sujata V. Manohar, JJ.
SIEMENS INDIA LTD.
Versus
THE STATE OF MAHARASHTRA
Sales Tax Reference No. 27 of 1980
Decided On: Decided On : 05-03-1986

The 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.

Headnote:

BOMBAY SALES TAX ACT - SECTION 57 - REVISION OF ASSESSMENT ORDER - LIMITATION - APPLICABILITY OF LAW IN FORCE AT THE TIME OF COMMENCEMENT OF REVISION PROCEEDINGS - DISTINCTION BETWEEN SUBSTANTIVE AND PROCEDURAL LAWS - RIGHT OF REVISION AS SUBSTANTIVE RIGHT - PERIOD OF LIMITATION AS PROCEDURAL LAW - CHANGE IN PERIOD OF LIMITATION DURING PENDENCY OF REVISION PROCEEDINGS - APPLICABILITY OF AMENDED LAW.

Fact of the Case:

The assessee filed returns under the Bombay Sales Tax Act, 1959, for the period 1st April, 1964, to 31st March, 1965, within the prescribed period. The Sales Tax Officer granted a set-off to the assessee by assessment order dated 20th April, 1967. The Assistant Commissioner of Sales Tax issued a notice dated 1st March, 1972, proposing to revise the order of the Sales Tax Officer granting the set-off. The Assistant Commissioner, by order dated 30th April, 1972, revised the order of the Sales Tax Officer and reduced the amount of set-off. The assessee filed an appeal before the Deputy Commissioner of Sales Tax, which was rejected. The Deputy Commissioner, however, reduced the disallowance. The assessee filed a revision application before the Tribunal, which confirmed the order of the Deputy Commissioner. The Tribunal referred the question of whether the notice served on 14th March, 1972, under section 57 of the Act for suo motu revision was barred by limitation to the High Court.

Finding of the Court:

The High Court held that the notice served on 14th March, 1972, under section 57 of the Act for suo motu revision was barred by limitation. The court held that the 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.

Issues: Whether the notice served on 14th March, 1972, under section 57 of the Act for suo motu revision was barred by limitation.

Ratio Decidendi: 1. The distinction between substantive and procedural laws is that substantive laws determine the rights and liabilities of the parties concerned, while procedural laws govern the manner in which such rights or obligations are to be enforced or realized. 2. Substantive rights of an assessee are 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. 3. 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. 4. The law prescribing a period of limitation is to be considered as procedural rather than substantive. 5. 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. 6. 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.

Final Decision: The High Court answered the question referred to it in the negative and against the department. The respondents were ordered to pay the assessee costs of the reference.