TMI Blog1986 (3) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... .12. The applicants filed an appeal from this order before the Deputy Commissioner of Sales Tax. The appeal was rejected. But the Deputy Commissioner reduced the disallowance from Rs. 8,902.12 to Rs. 4,254.12. The applicants filed a revision application before the Tribunal. The Tribunal, however, by its order dated 5th April, 1979, confirmed the order of the Deputy Commissioner. From the order of the Tribunal the following question has been referred to us: Whether, in the facts and circumstances of the case, i.e., where the assessee had filed his returns during the period 1st April, 1964, to 31st March, 1965, and the order of assessment was passed on 20th April, 1967, was the Tribunal right in holding that the notice served on 14th March, 1972, under section 57 of the Act for suo motu revision was not barred by limitation? To appreciate the question referred to us it is necessary to set out the provisions of section 57 of the Bombay Sales Tax Act, 1959, as amended from time to time: "57. Revision.-(1) Subject to the provisions of section 56 and to any rules which may be made in this behalf- (Section as in force from 1st January, 1960, to 30th June, 1965) (First amendment) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs undertaken by the Commissioner in the present case. According to the respondents the law in force at the date of the assessment order is the law applicable to the revision proceedings. On the date of the assessment order the 2nd amendment of section 57 was in operation. Hence the order could be revised within five years of the assessment order. The present revision was within five years of the assessment order and was therefore not barred by limitation. The applicants dispute this contention. According to them either the 1st or the 3rd amendment is applicable, i.e., the law in force at the time of submission of the returns or the law in force at the date of the commencement of revision proceedings. In either case the revision proceedings are barred by limitation. 2.. In order to determine the law which applies to such revision proceedings it is necessary to make a distinction between substantive laws and procedural laws. Broadly speaking substantive laws determine the rights and liabilities of the parties concerned. Procedural laws govern the manner in which such rights or obligations are to be enforced or realized. While in principle the distinction between these two types o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correctness of the return and calls for evidence, surely a controversy arises involving a proposition by the assessee and an opposition by the State ............ For the purposes of the accrual of the right of appeal the critical and relevant date is the date of initiation of the proceedings and not the decision itself." Under the proviso to section 22(1) of the Central Provinces and Berar Sales Tax Act, 1947, as it stood prior to its amendment, an aggrieved assessee was entitled to appeal provided he paid such amount of tax as he might admit to be due from him. After the amendment an appeal had to be accompanied by satisfactory proof of payment of tax in respect of which the appeal had been preferred. Assessment proceedings were initiated prior to the amendment of the section, but the order of assessment was made after the section was amended. The assessee contended that the right of appeal was a substantive right which the assessee had acquired under the unamended section 22(1) and the subsequent amendment of that section did not take away the right of appeal without depositing the impugned amount. The Supreme Court upheld this contention. 5.. The position was again discussed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no return has been made and the Commissioner has not issued any notice under the Act, how can it be held that some proceedings are pending before the Commissioner when none existed as a matter of fact?" 6.. It was argued before the Supreme Court that a statutory obligation to make a return within a prescribed time would amount to initiation of proceedings. This contention was negatived by the Supreme Court. It held that proceedings will commence after the return was submitted and would continue until final order of assessment was made in regard to the said return. Once the proceedings were initiated no question of limitation will arise. 7.. In the case of Regional Assistant Commissioner of Sales Tax, Indore v. Malwa Vanaspati and Chemical Company Limited reported in [1968] 21 STC 431 (SC) the Supreme Court was required to consider in this connection the provisions of the Madhya Bharat Sales Tax Act, 1950. The Supreme Court referred to the decision of the Supreme Court in the case of Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax, Nagpur [1963] 14 STC 976 (SC) and explained it as follows: "This court held in that case that a proceeding for assessment of sales ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turns had been filed by the assessee prior to the coming into effect of the amendment. In fact from the facts which are set out in that judgment it appears that the proceedings of reassessment commenced in April, 1959, after the amendment came into effect. It was not even contended before the Supreme Court that reassessment proceedings were initiated prior to the amendment. It was only contended that the period for which the dealer was being reassessed was prior to the amendment and hence the amendment did not apply. This contention was negatived by the court. This decision, therefore, does not help the respondents in any way. We also do not see how this decision can be said to overrule the decision of the Supreme Court in the case of Hoosein Kasam Dada (India) Ltd. v. State of Madhya Pradesh [1953] 4 STC 114 (SC) by implication, as contended by Mr. Jetly. 9.. In view of these authorities, therefore, in the present case the proceedings were initiated, at any rate by 14th May, 1964, by which date all the returns for the relevant period had been filed by the assessee who are registered dealers. The substantive rights of the applicants will, therefore, have to be determined with ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal as it deemed just and proper. Under the amended section 55(6) the appellate powers were set out in extenso. The court held that the change made by the Amendment Act was not a change in procedure but a change in the powers and jurisdiction of the appellate authority. The amendment did not have retrospective effect and therefore, it did not apply to the proceedings which had commenced and in which an assessment order had been passed prior to the amendment. In that case even the appeal was filed before the amended sub-section (6) of section 55 came into force. The court held that the appeal was covered by the earlier sub-section. This case is not directly in point because in this case the amendment came into effect after even the appeal was filed. Since the earlier law was in force when the appeal was filed the court held that the earlier law would cover the case. 12.. The right of the Commissioner to initiate suo motu revision proceedings in respect of an assessment order is similar to a right of appeal in this context though it may differ from a right of appeal in other regards. At the time when the assessment proceedings are initiated the assessee has a right to have these p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded law enlarges limitation. Even if such enlargement takes place before revision proceedings are instituted, the revision proceedings would be barred. A number of High Courts have decided to this effect. For example, in the case of Hargu Charan Srivastava v. Commissioner of Income-tax, Lucknow [1979] 119 ITR 622 the Allahabad High Court was required to consider a case where the period of limitation for initiating penalty proceedings was amended with effect from 1st April, 1971. Before the amendment the limitation period was 2 years commencing from the date of the assessment order. After the amendment the limitation was changed to 2 years commencing from the end of the financial year in which the assessment order was passed. The assessment order was passed in August, 1969. The Allababad High Court held that the amended provisions applied observing that "the prescription of period of limitation is a matter of procedure. Any amendment in this regard is retrospective in the sense it is applicable to all those matters which are pending and which had not become closed or dead". 15.. The same question was considered by a Full Bench of the Andhra Pradesh High Court in the case of Addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the High Court from 60 days to 120 days. The period of limitation was increased before the right to make an application became time-barred under the old provision. The new period of limitation was held applicable. 18.. The Kerala High Court has also decided to the same effect in the case of Commissioner of Income-tax, Kerala v. Kozhikode Wyanad Motor Service Ltd. reported in [1959] 37 ITR 311. Another Full Bench decision of the Andhra Pradesh High Court in the case of Allied Exports and Imports v. State of Andhra Pradesh reported in [1971] 28 STC 175 also supports this view. 19.. Mr. Jetly, learned counsel for the respondents, however, relied upon a decision of the Supreme Court in the case of Bharat Barrel Drum Mfg. Co. Private Limited v. Employees' State Insurance Corporation reported in AIR 1972 SC 1935 in support of his contention that the law prescribing a period of limitation is to be considered as a substantive law and not a procedural law. In that case the question before the Supreme Court related to interpretation of section 96(1)(b) of the Employees' State Insurance Act, 1948. Under this section power was conferred on the State to make rules "for regulating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er which had been made more than two years previously. That proviso did not lay down any rule of limitation. But it took away the power of the Commissioner to revise any assessment after the prescribed period. Thereafter the assessment became final and conclusive as against the department as well as the assessee." The Supreme Court refused to apply the provisions of the later Madhya Pradesh Sales Tax Act, 1958, which repealed the earlier Act, and which were in force when the revision commenced. 21.. In the present case section 57 of the Bombay Sales Tax Act as in force from 1st January, 1960, to 30th June, 1965 (i.e., 1st amendment), provides that the Commissioner may on his own motion, within two years from the date of any order call for and examine the records of such order. This provision is quite differently worded from the provision which the Supreme Court had to consider in the case of Commissioner of Sales Tax, Madhya Pradesh v. Amarnath Ajitkumar of Bhind [1971] 28 STC 702 (SC). Section 57 of the Bombay Sales Tax Act, as in force from 1st January, 1960, to 30th June, 1965, does not lay down that the Commissioner's right to revise will come to an end after a period of 2 ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed under the Act. The Act was subsequently amended by Bihar Act 7 of 1951, as a result of which no proceeding for revision could be initiated after the expiry of 4 years from the date of the assessment order. In the case before the Patna High Court the order of assessment was passed on 8th August, 1949, before the amendment. The Commissioner of Sales Tax revised the assessment by order dated 11th August, 1954. The Patna High Court held that the right of revision vested in the Commissioner at least on 8th August, 1949, when the order of assessment was made. This right could not be affected by the subsequent amendment of 1951 unless the amendment was made retrospectively and hence the order in revision dated 11th August, 1954, was not barred by limitation. For reasons which are set out earlier, we respectfully differ from the view taken by the Patna High Court. In fact from the decision it is not clear when the proceedings for revision commenced. The amended section provides a period of 4 years from the date of the assessment order for initiation of revision proceedings. The judgment has proceeded on the basis that the right of revision is a substantive right. It has however ..... X X X X Extracts X X X X X X X X Extracts X X X X
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