2015 (8) TMI 742 - PUNJAB AND HARYANA HIGH COURT

Assessment of Tax u/s 29(2) of Punjab Value Added Tax, 2005 - Constitutional validity of amendment to section 29 - Extension of Assessment period – Whether the amendment is clarifificary in nature and retrospective or substantive and prospective - Petitioner contends that under unamended Section 29(4), assessment would have been barred by limitation as three years had elapsed after filing of annual statement whereas if amendment was held to have retrospective effect it would not be barred by limitation – Petitioner challenges constitutional validity of Section 29 of PVAT – Held that:- opening part of section 29(4) as amended read by itself would suggest that provision was not retrospective – Period of six years, in place of three years, was mentioned only in amended Section 29(4) – Extended period under unamended section was not as of right but was dependent upon discretion of Commissioner – Settled position of law that if statute was curative or merely declaratory of previous law retrospective operation was generally intended – In absence of clear words indicating that amending Act was declaratory, it would not be so construed when pre-amended provision was clear and unambiguous.

Whether the amendment is harsh, unfair, arbitrary and is excessively and unreasonably retrospective and is, therefore, violative of Articles 14 and 19 of the Constitution - Held that:- If the books are not available because they were destroyed or are otherwise unavailable to the assessee prior to the amendment, it would always be open to the assessee to bring this to the notice of the Assessing Authority who must take the same into consideration. It would be open to the assessee to take this factor as a defence and a justification for not having preserved the books. Obviously, in such cases, an adverse inference cannot be drawn against the assessee. The validity of the amendment, therefore, cannot be struck down on the ground that it is unconstitutional for this reason.

Whether the provio is contrary of main proviso - Held that:- The proviso does not take away any right given by the main provision. - The extended period for making the assessment in respect of the year 2006-07 is not by implication from the proviso. It arises from the plain and clear language of the proviso. The proviso clearly carves out an exception to the main provision itself. The judgment infact supports the respondents’ case. The proviso is in terms of this judgment as but for the proviso the enacting part of the section would have included the subject matter of the proviso by disallowing the assessment in respect of the year 2006-07. The proviso was enacted to take this part out of the purview of the main/enacting part of the section. The proviso expressly qualified the enacting part of the section and created an exception to it.

In the present case, since the assessment were not complete, the various decisions of the Supreme Court relied upon by the assessee are not applicable wherein it was held that, if the assessment period is over, the assessee acquires a vested right which cannot be disturbed by retrospective amendment which extends the period for assessment or reassessment after the original period of assessment or reassessment has expired.

Thus, in any event, period of six years under amended section was to apply retrospectively – Explanation (2), therefore, was merely clarificatory – There was no inconsistency between main provision and proviso – Proviso merely grants further period for making assessment – Purpose and effect of entire amendment was to obviate consequences of proviso to unamended section – In view of aforesaid, appeal dismissed – Decided against Assesse.