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TMI Blog1960 (2) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... 1947 (C.P. and Berar Act No. XXI of 1947), after sub-section (2) the following sub-section shall be inserted, namely: "(3) (a) Nothing in sub-sections (1) and (2)- (i) shall apply to any proceeding (including any notice issued) under section 11 or 22-A or 22-B, and (ii) notwithstanding any judgment, decree or order of a Court or Tribunal, shall be deemed ever to have been applicable to such proceeding or notice. (b) The validity of any such proceeding or notice shall not be called in question merely on the ground that such proceeding or notice was inconsistent with the provisions of sub-sections (1) and (2)." Now, it is the argument on behalf of the respondents that the result of this amendment is that the decision of the Full Bench no longer holds good and, therefore, there would be no period of limitation so far as notices issued under section 11(2) of the Act are concerned. On the other hand, it is contended on behalf of the petitioners by Mr. Chandurkar and Mr. Phadke that the Legislature has taken an erroneous view of the decision of the Full Bench and in law the amendment has not at all touched the said decision. In order to test this argument, it is necessary to refer i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Dowdell O'Mahoney & Co.[1952] 1 All E.R. 531. Our attention has also been invited to a ruling of the Supreme Court in Hariprasad Shivshankar v. A.D. Divelkar[1956] 59 Bom. L.R. 384; A.I.R. 1957 S.C. 121. , where a similar view was taken and it was observed that legislation founded on a mistaken or erroneous assumption has not the effect of making that the law which the Legislature had erroneously assumed to be so. There is considerable force in what Mr. Phadke has argued. On the other hand, it is argued on behalf of the respondents that the amendment itself clearly indicates what the Legislature intended. Under clause (ii) of sub-section (3)(a), newly introduced, a specific reference is made to a judgment, decree or order of a Court or Tribunal. Our attention was also invited to the Statement of Objects and Reasons in connection with this amendment wherein a specific reference to the case of Bisesar House v. Commissioner of Sales Tax, Nagpur(1), has been made, and it is contended that where the intention of the Legislature is clear, a mistake in language should not prevent the Court from giving effect to the obvious intention of the Legislature. See Maxwell's Interpretation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar, for the petitioner in Special Civil Application No. 91 of 1959. M.N. Phadke and V.M. Golwalkar, for the petitioner in Special Civil Applications Nos. 124, 314 and 315 of 1959. P.N. Bhagwati, with R.R. Dandige and Y.R. Dandige, for the petitioner in Special Civil Application No. 300 of 1959. N.L. Abhyankar, Special Government Pleader, for the opponents. JUDGMENT CHAINANI, C.J.-The two questions referred to the Full Bench are: (1) Whether in view of the amendment introduced in section 11-A of the Central Provinces and Berar Sales Tax Act, 1947 (XXI of 1947) by section 6 of the Bombay Sales Tax Laws (Validating Provisions and Amendment) Act, 1959, the Full Bench decision in Bisesar House v. State of Bombay[1958] 9 S.T.C. 654; 60 Bom. L.R. 1395. still holds good? (2) Whether a notice under section 11(2) of the said Act can be issued more than three years after the expiry of the period for which it is proposed to make the assessment? In order to answer these questions, it is necessary to refer to certain sections of the Central Provinces and Berar Sales Tax Act, 1947 (XXI of 1947), (hereinafter referred to as the Act). Section 4 of the Act is the charging section and it provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after giving the dealer a reasonable opportunity of being heard, proceed in such manner as may be prescribed to assess to the best of his judgment the amount of tax due from the dealer in respect of such period. Under this sub-section the Commissioner can proceed against unregistered dealer within three years from the expiry of the period in respect of which the assessment is to be made. Section 11-A, which was inserted in the Act in 1953, provides for the assessment of turnover which has escaped assessment. Sub-section (1) of this section states that if in consequence of any information which has come into his possession, the Commissioner is satisfied that any turnover of a dealer during any period 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 three calendar years from the expiry of such period, after giving the dealer a reasonable opportunity of being heard and after making such inquiry as he considers necessary, proceed in such manner as may be prescribed to re-assess or assess, as the case may be, the tax payable on any such turnover. Sub-section (2) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of issuing a notice under section 14? If we were not to do that, we would arrive at this rather extraordinary conclusion that the Legislature while saving the subject from harassment of proceedings with regard to escaped assessment or under-assessment, permitted that harassment with regard to the very initiation of proceedings after the lapse of four years." The above argument was accepted by the Full Bench of this Court in Bisesar House case(1), and it was held that a notice under section 11(2) of the Act cannot be issued more than three years after the expiry of the period for which it is proposed to make the assessment. This case was decided on 23rd July, 1958. This decision rendered invalid several notices issued and proceedings instituted under sub-section (2) of section 11 of the Act. The Legislature, therefore, decided to intervene and enacted the Bombay Sales Tax Laws (Validating Provisions and Amendment) Act, 1959 (XXII of 1959), to which I will hereafter refer as the amending Act. This amending Act came into force on 18th April, 1959. Section 6 of the amending Act inserted a new sub-section (3) in section 11-A of the principal Act, and the reason for making this amend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conceded that the object of the Legislature in enacting the new sub-section (3) of section 11-A was, as stated in the Statement of Objects and Reasons, to provide that the period of limitation prescribed for re-assessment of escaped turnovers shall not apply to original assessments. It has, however, been argued that this object has not been achieved. The Legislature has not stated that a notice under section 11(2) may be issued more than three years after the expiry of the relevant period. Consequently, it has been urged that the amendment does not carry out the object. According to Mr. Phadke, the Legislature has misfired. In our opinion, there is no force in these arguments. A perusal of the judgment in Bisesar House case [1958] 9 S.T.C. 654; 60 Bom. L.R. 1395. makes it clear that the learned Judges imported in section 11(2) the limitation prescribed in subsection (1) of section 11-A. The whole basis of the decision is that as under section 11-A the Commissioner cannot assess or re-assess the tax, when the turnover has escaped assessment, after the expiry of three years, he cannot do the same by resorting to sub-section (2) of section 11. This will be clear from the following p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of fresh notices and commencement of fresh proceedings only in those cases, in which the right to issue notices or initiate proceedings had not become time-barred before the amending Act came into force. In support of his argument, Mr. Bhagwati has relied upon the decision of this Court in S.C. Prashar v. Vasantsen[1956] 58 Bom. L.R. 184, at pages 204-5. in which it was observed: "It seems to us that the proposition of law is settled beyond any doubt that although limitation is a procedural law and although it is open to the Legislature to extend the period of limitation, an important right accrues to a party when the remedy against him of another party is barred by the existing law of limitation and that vested right cannot be affected except by the clearest and most express terms used by the Legislature. It is not suggested that a sovereign Parliament cannot take away vested rights, but the Court must be loath to construe any legislation as interfering with vested rights unless the law-making authority has clearly so provided." In Naranbhai Chhaganbhai v. Motibhai[1955] A.I.R. 1955 Bom. 406; 57 Bom. L.R. 509., it was held that even where a new period of limitation is prescribe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by it in section 2 of the amending Act, "the following sub-section shall be and shall be deemed always to have been inserted." Mr. Abhyankar on behalf of the State has, on the other hand, contended that as sub-section (2) of section 11 itself does not lay down any period of limitation and as the limitation prescribed in section 11-A has been imported into this section by a judicial decision in Bisesar House case[1958] 9 S.T.C. 654., a person could not acquire a vested right of no action being taken against him after three years under sub-section (2) of section 11. It is not necessary for us to decide this question, because it seems to us that although the language of the new sub-section (3) of section 11-A is not happy it shows a clear intention on the part of the Legislature to take away rights, if any, which might be held to have been acquired as a result of the above decision. The words "shall be deemed ever to have been applicable" in clause (a)(ii) of the new sub-section (3) indicate that this sub-clause applies to proceedings, which had been instituted before the Act was amended. In respect of such proceedings, it has been provided that nothing in sub-sections (1) and (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (2) of section 11-A. The only ground, on which it can be said to be inconsistent with the provisions of section 11-A, is that the proceeding was begun or that the notice was issued more than three years after the expiry of the relevant period. If, therefore, the validity of any proceeding commenced or notice issued after the Act was amended cannot be challenged on this ground, it follows that proceedings may be commenced or notices may be issued more than three years after the expiry of the relevant period. The view, which we are taking, is in accordance with that taken in Manordas Kalidas v. V.V. Tatke(1). Sections 14, 15 and 31 of the Bombay Sales Tax Act, 1953, correspond to sections 11, 11-A and 22 of the Central Provinces and Berar Sales Tax Act, 1947. Section 15 of the Bombay Act was amended by section 3 of the amending Act. The amendment made in section 15 is identical with that made in section 11-A of the C.P. and Berar Act. The effect of the amendment made in section 15 was considered in Manordas Kalidas v. V.V. Tatke[1960] 11 S.T.C. 87; 61 Bom. L.R. 1560. At page 1564, it was observed: "On the principle of the two cases, Commissioner of Income-tax v. Narsee Nagsee & ..... X X X X Extracts X X X X X X X X Extracts X X X X
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