TMI Blog2012 (5) TMI 378X X X X Extracts X X X X X X X X Extracts X X X X ..... DVAT Act, the period of limitation would be that which was in vogue when the said notice was issued. The period of limitation that would apply would, therefore, be the one prescribed under Section 74A(2)(b) of the DVAT Act. And, that being the case, as we have mentioned above, the impugned show cause notice dated 02.02.2010 is barred by time. - Decided in favor of assessee. - W.P.(C) 974/2010 - - - Dated:- 22-5-2012 - MR JUSTICE BADAR DURREZ AHMED, MR JUSTICE V.K. JAIN, JJ. For the Petitioners : Mr Rajesh Jain with Ms Neetika Khanna For the Respondent : Mr Avnish Ahlawat with Ms Latika Choudhary BADAR DURREZ AHMED, J 1. By way of this writ petition, the petitioner has challenged the show cause notice dated 02.02.2010 pertaining to the assessment year 2003-2004 primarily on the ground that the said show cause notice is barred by time. By virtue of the said show cause notice dated 02.02.2010, the petitioner has been called upon to show cause as to why the assessment order dated 24.02.2005 in respect of the year 2003-04 be not revised under Section 16 of the Delhi Sales Tax on Works Contract Act, 1999 read with Section 46 of the Delhi Sales Tax Act, 1975. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore it would not be permissible for the assessing officer to proceed on the basis of the notice dated 05.07.2007 and pass the re-assessment order. 6. In view of this clear finding by the Division Bench, it was felt that it would not be necessary to go into the other issues raised in the writ petition. Consequently, the Division Bench by virtue of its order dated 25.11.2009 passed in W.P. (C) 8526/2008 set aside the re-assessment proceedings on the ground of limitation alone. It was also directed that a sum of ₹ 1,78,58,219/- which had become refundable as a result of the original assessment and had already been deposited by the respondents in this court, pursuant to the directions given on 15.12.2008, be released to the petitioner by the Registrar along with any interest accrued thereon. The Division Bench also gave liberty to the petitioner to make a claim with regard to the interest for the past period. 7. We are informed by the learned counsel for the petitioner that such a claim was made and it has not yet been disposed of. In any event, the said sum of ₹ 1,78,58,219/- along with interest accrued thereon had been withdrawn by the petitioner subsequent to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23. From the submissions raised at the Bar, it is noticeable that the legislature has initially introduced Section 74A w.e.f. 24.11.2005 and after the decision was rendered in International Metro Civil Contractors (supra) has brought the said Section into effect from 1.4.2005. The question that emerges is whether by such incorporation with retrospective effect the revisional power is saved. That apart there has been a debate with regard to the interpretation placed by the Division Bench under Section 106 of the Act. ... 13. Ultimately, the Division Bench, by its order dated 01.11.2010 directed that the matters be placed before Hon ble the Chief Justice for constitution of an appropriate Larger Bench in the following manner:- 24. In view of the aforesaid, we are disposed to think that the decisions rendered in International Metro Civil Contractors (supra) and LG Electronics (India) Ltd. (supra) require reconsideration by a larger Bench apart from the fact that there has to be an authoritative pronouncement of law on this score. We are disposed to think so as the legislature has presumed that the Division Bench possibly would have upheld the action had the amendment would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t could be invoked in respect of orders passed under the Delhi Sales Tax Act, 1975. The Full Bench, inter alia, examined the decision of the Supreme Court in CIT v. Shah Sadiq Sons: 1987 (3) SCC 516, wherein it was observed that a right which had accrued and had become vested continued to be capable of being enforced notwithstanding the repeal of the statute under which that right accrued unless the repealing statute took away such right expressly or by necessary implication. . The Supreme Court also held:- 15. ... In other words, whatever rights are expressly saved by the 'savings' provision stand saved. But, that does not mean that rights which are not saved by the 'savings' provision are extinguished or stand ipso facto terminated by the mere fact that a new statute repealing the old statute is enacted. Rights which have accrued are saved unless they are taken away expressly. This is the principle behind Section 6(c) of the General Clauses Act, 1897. ... (Underlining added) 17. Another decision of the Supreme Court which was noticed by the Full Bench was that of State of Punjab v. Mohar Singh Pratap Singh: AIR 1955 SC 84 wherein, the Supreme Court h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the entire scheme of the Act. xxxx xxxx xxxx xxxx (vii) A legal proceeding which could have been initiated under the repealed Act continues to subsist if the savings and repeal provision so stipulates subject to the law of limitation. To elaborate, the right to initiate a legal proceeding can only be obliterated or effaced or meet its legal death if the period of limitation thereon has expired. (Underlining added) 19. Section 106 of the DVAT Act provides for Repeal and Savings in the following manner:- 106. Repeal and savings (1) The Delhi Sales Tax Act, 1975 (43 of 1975), the Delhi Tax on Entry of Motor Vehicles into Local Areas Act, 1994 (4 of 1995), the Delhi Sales Tax on Works Contract Act, 1999 (9 of 1999), and the [Delhi Sales Tax on Right to Use Goods Act, 2002 (13 of 2002)] as in force in Delhi (referred to in this section as the said Acts ), are hereby repealed. (2) Notwithstanding sub-section (1) of this section, such repeal shall not affect the previous operation of the said Acts or any right, title, entitlement, obligation or liability already acquired, accrued or incurred thereunder. (3) For the purposes of sub-section (2) of this s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easons, we proceed to record our conclusions in seriatim: (a) The interpretation placed by the Division Bench in International Metro Civil Contractors (supra) and LG Electronics (India) Ltd. (supra) on Section 106 of the DVAT Act is not correct. (b) The conclusion in International Metro Civil Contractors (supra) and LG Electronics (India) Ltd. (supra) to the effect that despite incorporation of Section 74A in the DVAT Act on 16.11.2005, the suo motu revisional proceeding could not be initiated at the commencement of the DVAT Act, i.e., 1.4.2005, as the legislative intendment was clear that on the date the Act came into force the provision pertaining to exercise of suo motu revisionary power did not exist in respect of the proceedings under the DST Act as the assessment had attained finality and were closed, is incorrect. (c) The order of assessment framed under the DST Act is deemed to be an order framed under the DVAT Act and on reading of Sections 106 (2) and 106 (3) in a conjoint manner, it is not correct to state that once the order of assessment has been passed, the transaction is closed and, therefore, the assessment/order is not revisable under Section 74A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tanding anything contained to the contrary in section 34, no order under this section shall be passed after the expiry of four years from the end of the year in which the order passed by the subordinate officer has been served on the dealer. The said provision bars the passing of an order in exercise of the revisional jurisdiction under section 74A after the expiry of four years from the end of the year in which the order passed by the subordinate officer had been served on the dealer. It is clear that the service of the assessment order had been effected on or before 02.03.2005. Therefore, the end of that year would be 31.03.2005. Which means that the order that could be passed under section 74A could only be passed within four years of 31.03.2005. In other words, in the facts of the present case, the revisionary order under section 74A could have been passed up to 31.03.2009. 24. As already pointed out above, the show cause notice itself had been issued on 02.02.2010 which is beyond the period of four years from the end of the year in which the assessment order dated 24.02.2005 had been served on the petitioner / dealer. It goes without saying that when even an order canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there is a clear stipulation with regard to the period during which an order under that provision can be passed. When an order itself cannot be passed beyond the period of four years from the end of the year in which the assessment order had been served on the petitioner, it stands to reason that no notice initiating any proceeding under section 74A, by invoking the revisional power of the Commissioner, can be issued beyond that period of four years. 27. Section 46 of the Delhi Sales Tax Act, 1975 empowered the Commissioner to revise erroneous orders prejudicial to the interests of the revenue. But, the proviso thereto clearly stipulated that the final order that may be passed in exercise of this power of revision has to be passed with five years of the date of the order sought to be revised. The said proviso reads as under:- Provided that a final order under this section shall be made before the expiry of five years from the date of the order sought to be revised. It was contended by Mrs Ahlawat, appearing for the respondents, that what has been saved are the entire provisions of section 46 of the Delhi Sales Tax Act, 1975 and, therefore, the period of limitation of 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oviso in Section 46 of the Delhi Sales Tax Act, 1975. Fifthly, the Full Bench clearly held that, in cases where assessments had been completed under the Delhi Sales Tax Act, 1975 but revisional proceedings had not been initiated under Section 46 thereof by the time of the repeal, proceedings could be initiated under Section 74A during the period of limitation as stipulated under Section 74A, subject to the conditions precedent stipulated therein . Sixthly, the legislature consciously altered the limitation clause insofar as the power of revision is concerned. Having expressly provided for a different scheme in Section 74A(2)(b), it could not have been the intention of the legislature to continue the operation of the proviso to Section 46 of the Delhi Sales Tax Act, 1975. 28. We may also refer to a decision of the Supreme Court in the case of Thirumalai Chemicals Ltd v. Union of India: 2011 (268) ELT 296 (SC) wherein the question was whether, while dealing with a belated appeal under Section 19(2) of FEMA (Foreign Exchange Management Act, 1999), the application for condonation of delay has to be dealt with under the first proviso to sub-section (2) of Section 52 of FERA (Foreign ..... X X X X Extracts X X X X X X X X Extracts X X X X
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