TMI Blog2015 (8) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... ce 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , also heard all the counsel who appeared in the connected petitions. As all the petitioners restricted the challenge to the constitutional validity of the amended section 29, it is, necessary to refer to the facts only briefly. We will for convenience refer to the facts from this Civil Writ Petition No. 21811 of 2014. 2. The petitioners had set up a plant for manufacturing vanaspati and other edible oils in the State of Punjab. It is registered under the PVAT Act . Prior thereto the petitioner was also registered under the Punjab General Sales Tax Act, 1948 (PGST Act) and the Central Sales Tax Act, 1956. The PVAT Act was enacted inter-alia to provide for the levy and collection of Value Added Tax (VAT) and turnover tax on the sales or purchases of goods and for the repeal of the PGST Act. Upon the PVAT Act coming into force, the petitioner made an application for a registration certificate under that Act which was granted. The petitioner is registered as a Taxable Person/Registered person under the provisions of the PVAT Act for the manufacture and sale of its products. It also continues to be registered under the Central Sales Tax Act, 1966 and the rules framed thereunder. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Official Gazette . It was published in the official gazette on 15.11.2013. 5(A) It would be convenient to juxtapose section 29 as it originally stood and as amended with effect from 15.11.2013:- Before amendment on 15.11.2013 Section 29(4) After amendment from 15.11.2013 Section 29(4) An assessment under sub section (2) or sub-section (3) may be made within (three) years, after the date when the annual statement was filed or due to be filed whichever is later. An assessment under subsection (2) or sub-section (3), may be made within (six) years after the date when the annual statement was filed or due to be filed whichever is later. PROVIDED THAT where circumstances so warrant, the Commissioner may by an order in writing, allow assessment of a taxable person or a registered person after three years, but not later than six years, from the date, when annual statement was filed or due to be filed by such person, whichever is later. PROVIDED THAT the assessment under sub section (2) or sub-section (3), in respect of which annual statement for the assessment year 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to safeguard the Revenue on account of cases becoming time barred and to undo the effect of the judgment dated 01.09.2009 of the Hon ble High Court in case of A.B.Sugars Ltd. it has become necessary and expedient to amend sub Section 4 of Section 29 and insert sub section (10-A) in Section 29 of the Punjab VAT Act, 2005. 6. The petitioner contends that under the unamended Section 29(4), the assessment would have been barred by limitation whereas if the amendment is held to have retrospective effect it would not be barred by limitation. The petitioner has, therefore, challenged the constitutional validity of the amendment introduced by section 6 of the Amendment Act. This brings us to the grounds of challenge to section 29(4) as amended by the Amendment Act. I. The first contention is that section 29(4) as amended and sub section (10-A) of section 29 are prospective and not retrospective. In the alternative, assuming they are retrospective, the following contentions were raised on behalf of the petitioners:- II. The amendments do not cure or remove the defects and do not validate the defective action and are, therefore, unconstitutional. III. The amendments to section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ----- (10) The Commissioner may for reasons to be recorded in writing, extend the period of three years, for passing the order of assessment for such further period as he may deem it. The Division Bench held that although the Commissioner was empowered to extend the period of limitation, he had to record the reasons for passing the order granting extension of time and he could not arrive at valid and acceptable reasons unless he afforded the assessee an opportunity of being heard. The Division Bench read into the provision the principles of natural justice as the provision itself was silent on the issue. The Division Bench found that there was no intendment to exclude the principles of natural justice and therefore, it followed that the principles of natural justice are inherent and must be read in Section 11(10) of the PGST Act. As in that case, the assessee had not been afforded an opportunity of being heard, it was held that the order extending the period of limitation could not be relied upon by the respondent-department. The impugned notice and the order extending the time were, therefore, set-aside. Although the judgment in A.B.Sugars Ltd. (supra) was under the PGST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 11(3) of the PGST Act which stands replaced by the PVAT Act. Section 11 of the PGST Act dealt with the assessment of tax. Sub section 3 required an order of assessment to be passed within a period of three years from the last date prescribed for furnishing the last return in respect of any period. Sub section (10) of Section 11 of the PGST Act entitled the Commissioner, for reasons to be recorded in writing to extend the period of three years, for passing the order of assessment for such further period as he may deem fit. The Division Bench held that the power of extension of time for completing assessment has to be exercised before the assessment becomes time barred. 10. The provisions of section 29(4) prior to the amendment and as interpreted in the above judgments had not been complied with at least in most cases. Therefore, as a result of these judgments, the period prescribed under Section 29 of the PVAT Act would have expired in several cases. According to the respondents, it was to undo the effect of the judgments that the amendment was introduced. Whether sub section (10-A) of section 29 and the amendment to section 29(4) are retrospective. 11. The firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ix years in explanation (1) meaningless. There was no period of six years in Section 29(4) as it originally stood. The period of six years is mentioned only in the amended Section 29(4). The word aforesaid is usually a reference to something named or referred to in an earlier part of the same document. In this case, it is a reference to the period of six years mentioned in the same section. It can hardly be suggested that the six year period refers to the combined period under the main part of the unamended section and the extension provided therein. The extended period under the unamended section was not as of right. It was dependent upon the exercise of discretion by the Commissioner and in the manner provided therein. More important, the word aforesaid can only refer to the section in which it is used which is the amended section. It is inconsistent with anything but the section in which it is used. 16. In support of the contention that the amendment to Section 29(4) operates only prospectively, learned counsel for the petitioner then relied upon Section 1 of the Amendment Act which reads as under:- 1. (1) This Act may be called the Punjab Value Added Tax (Second ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intention of the legislature in enacting such provision. The date of commencement of the proviso to Section 21(2) of the Act does not control its retrospective operation. Earlier the assessment/reassessment could have been completed within four years of that particular assessment year and now by the amendment adding the proviso to Section 21(2) of the Act it is eight years. The only safeguard being that it is after the satisfaction of the Commissioner of Sales Tax. The proviso is operative from 19-2-1991 and a bare reading of the proviso shows that the operation of this proviso relates and encompasses back to the previous eight assessment years. (emphasis supplied). This judgment answers the issue raised on behalf of the petitioner. It draws a distinction between the commencement of the Act and the operation of the Act. It was contended that as the amending Act stated that it came into force on 15.11.2013, it must be held that the amendment had no retrospective effect and came into operation only on that day. As we have already held there is a difference between the date on which the Act came into force and the date with effect from which the provisions thereof operate. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over rules the judgments of this Court which is impermissible. It is submitted that the proviso and the explanations to Section 29(4) and sub section (10-A) of Section 29 have the effect of overruling the judgments of this Court including the judgment in A.B.Sugars Limited v. The State of Punjab and others (supra), without removing the defect. 25. The judgments relied upon on behalf of the petitioners, which we will now refer to, deal with validating statutes as well as the power of the legislature in respect of judgments of Courts. It is important, however, at the outset to note that the amendment to Section 29 does not validate an invalid statute. Section 29(4) prior to the amendment had never been struck down as being invalid on any ground whatsoever. It had been interpreted in the judgments which we have already referred to. It was held that the power to extend the time under the proviso could not be exercised after the expiry of the period of three years; that the rules of natural justice must be read into the unamended Section and that individual notice to an assessee was mandatory and that a general notice on the website of the department did not meet the requirements of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s legislative field fundamentally altering or changing its character retrospectively. As noted in the judgment we will refer to, a changed or altered condition must be such that the previous decision would not have been rendered by the Court if those conditions had existed at the time of declaring a law as invalid. The amendments to Section 29 are not contrary to the ratio of any of these judgments. 28. In Shri Prithvi Cotton Mills Ltd. and another v. Broach Borough Municipality and others, 1969(2) Supreme Court Cases 283, the Gujarat Imposition of Taxes by Municipalities (Validation) Act, 1963, was passed because of the decision of the Supreme Court in Patel Gordhandas Hargovindas v. Municipal Commissioner, Ahmedabad 1964(2) S.C.R. 608. Rule 350-A was called in question for rating open lands which provided that the rate on the area of open lands shall be levied at 1 per centum on the valuation based upon capital value. It was held that the word rate meant a tax for local purposes imposed by the local authorities. The rule was declared ultra vires the Act itself. The legislature of Gujarat passed the Validation Act seeking to validate the imposition of the tax as well as to av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o make a valid law, it can at any time make such a valid law and make it retrospectively so as to bind even past transactions. The validity of a Validating Law, therefore, depends upon whether the Legislature possesses the competence which it claims over the subject-matter and whether in making the validation it removes the defect which the courts had found in the existing law and makes adequate provisions in the Validating Law for a valid imposition of the tax. (emphasis supplied). 29. As we mentioned earlier, the validity of a validating law was held to depend inter-alia upon whether in making the validation it removes the defect which the Courts had found in the existing law and makes adequate provisions in the validating law for a valid imposition of the tax. We will apply the ratio of this judgment to the case before us after referring to the other judgments on this point. 30. In Municipal Corporation of the City of Ahmedabad and another v. The New Shrock SPG. and WVG Co. Ltd. 1970(2) Supreme Court Cases 280, the Supreme Court while dealing with the validity of Section 152-A(3) of the Bombay Provincial Municipal Corporation Act, 1949, held that the section commanded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Act. A Validating Act seeks to validate the earlier Acts declared illegal and unconstitutional by courts by removing the defect or lacuna which led to invalidation of the law. With the removal of the defect or lacuna resulting in the validation of any Act held invalid by a competent court, the Act may become valid, if the Validating Act is lawfully enacted. But the question may still arise as to what will be the fate of acts done before the Validating Act curing the defect has been passed. To meet such a situation and to provide that no liability may be imposed on the State in respect of such acts done before the passing of the Validating Act making such act valid, a Validating Act is usually passed with retrospective effect. The retrospective operation relieves the State of the consequences of acts done prior to the passing of the Validating Act. The retrospective operation of a Validating Act properly passed curing the defects and lacuna which might have led to the invalidity of any act done may be upheld, if considered reasonable and legitimate. 18. In the instant case, the State instead of remedying the defect or removing the lacuna has by the impugned amendment sought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e effect. It may be open to the Legislature to impose the levy at the higher rate with prospective operation but levy of taxation at higher rate which really amounts to imposition of tax with retrospective operation has to be justified on proper and cogent grounds. This aspect of the matter does not appear to have been properly considered by the High Court and the High Court in our view was not right in holding that by the enactment of Section 2 of the impugned Act the very basis of the complaint made by the petitioner before this Court in the earlier writ petition as also the basis of the decision of this Court in Cawasji case [(1969) 1 Mys LJ 461 : (1968) 16 Law Rep 641] that the State is collecting amounts by way of tax in excess of what was authorised under the Act has been removed . We, accordingly, set aside the judgment and order of the High Court to the extent it upholds the validity of the impugned amendment with retrospective effect from April 1, 1966 and to the extent it seeks to nullify the earlier judgment of the High Court. We declare that Section 2 of the impugned amendment to the extent that it imposes the higher levy of 45 per cent with retrospective effect from A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al, the legislature amended the definition of house with retrospective effect so as to eliminate the impediment on which the High Court rested its judgment. It also made validation of the actions by Section 4 of the Validation Act with retrospective effect. On that basis when it was contended in this Court for the respondent that the legislature had overruled or set aside the judgment of the High Court and it was constitutionally impermissible, a Bench of three Judges had held that the State Legislature had not overruled or set aside the judgment of the High Court. It had amended the definition of the house by substituting a new section in the place of an old one, providing a new definition which had retrospective effect, notwithstanding anything contained in any judgment, decree or order of the court or other authority. In other words, this Court had held that the legislature removed the basis of the decision rendered by the High Court so that the decision could not have been given in the altered circumstances. 41. In I.N. Saksena v. State of M.P. (1976) 3 SCR 237, the State Government amended its memorandum to compulsorily retire a government servant on attaining the superan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efect which the court had pointed out with a deeming date. 46. .. It was open to the legislature under the constitutional scheme within certain limits, to amend the provisions of the Act retrospectively and to declare what the law shall be deemed to have been. But it was not open to the legislature to say that the judgment of the court properly constituted and rendered, shall be deemed to be ineffective and the interpretation of the law shall be otherwise than as declared by the court. 56. From a resume of the above decisions the following principles would emerge: (1) The adjudication of the rights of the parties is the essential judicial function. Legislature has to lay down the norms of conduct or rules which will govern the parties and the transactions and require the court to give effect to them; (2) The Constitution delineated delicate balance in the exercise of the sovereign power by the legislature, executive and judiciary; (3) In a democracy governed by rule of law, the legislature exercises the power under Articles 245 and 246 and other companion articles read with the entries in the respective lists in the Seventh Schedule to make the law which inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecovery from the State ineffectual. It is competent for the legislature to enact the law with retrospective effect and authorise its agencies to levy and collect the tax on that basis, make the imposition of levy collected and recovery of the tax made valid, notwithstanding the declaration by the court or the direction given for recovery thereof. (9) The consistent thread that runs through all the decisions of this Court is that the legislature cannot directly overrule the decision or make a direction as not binding on it but has power to make the decision ineffective by removing the base on which the decision was rendered, consistent with the law of the Constitution and the legislature must have competence to do the same. 34. In National Agricultural Cooperative Marketing Federation of India Ltd. and another v. Union of India and others (2003) 5 Supreme Court Cases 23, the Supreme Court held:- 19. In making this change, the legislature does not statutorily overrule this Court s decision in Kerala State Coop. Marketing Federation Ltd. [(1998) 5 SCC 48, as has been contended by the appellant. Overruling assumes that a contrary decision is given on the same facts or law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be retrospective. In determining, therefore, the nature of the Act, regard must be had to the substance rather than to the form. If a new Act is to explain an earlier Act, it would be without object unless construed retrospective. An explanatory Act is generally passed to supply an obvious omission or to clear up doubts as to the meaning of the previous Act. It is well settled that if a statute is curative or merely declaratory of the previous law retrospective operation is generally intended. The language shall be deemed always to have meant is declaratory, and is in plain terms retrospective. In the absence of clear words indicating that the amending Act is declaratory, it would not be so construed when the pre-amended provision was clear and unambiguous. An amending Act may be purely clarificatory to clear a meaning of a provision of the principal Act which was already implicit. A clarificatory amendment of this nature will have retrospective effect and, therefore, if the principal Act was existing law which the Constitution came into force, the amending Act also will be part of the existing law. The above summing up is factually based on the judgments of this Court a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady been made and completed, the assessee cannot be subjected to reassessment unless the statute permits that to be done. Reference may be made to Controller of Estate Duty, West Bengal v. Smt Ila Das[(1981) 132 ITR 720 (Cal HC)] , where an attempt to reopen the estate duty assessment consequent upon the insertion of the new Section 59 of the Estate Duty Act was held infructuous. (emphasis supplied). The sentence emphasized illustrates our observation. 37. In S.T.Sadiq v. State of Kerala and others 2015 SCC online 99, the Supreme Court held that it is settled law that the legislature cannot directly annul a judgment of a Court and that the legislative function consists in making a law and not in declaring what the law shall be. In the words of R.F.Nariman J.:- If the legislature were at liberty to annul judgments of courts, the ghost of bills of attainder will revisit us to enable legislatures to pass legislative judgments on matters which are inter-parties. Interestingly, in England, the last such bill of attainder passing a legislative judgment against a man called Fenwick was passed as far back as in 1696. A century later, the US Constitution expressly outlawed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court which becomes ineffective after the change of the law. By providing its own meaning and interpretation of the law, the legislature does not say what the provision meant when the Court had interpreted it by the judgment and said what is meant. What the legislature does by the amendment is to say now i.e. on the enactment of the amendment, what the section means and how it is to be interpreted and to make that meaning or interpretation applicable retrospectively. In doing so the legislature does not reverse the judgment. It removes the basis on which it was pronounced by legislative fiat and not de hors legislative fiat. 42. This resolves an apparent conflict with the rule that once the legislation leaves Parliament it is the Courts and the Courts alone that can interpret the provisions thereof. This rule is not inconsistent with what we have just said. Parliament cannot interpret the legislation except by exercising its legislative powers. Interpreting legislation is the domain of the Courts and to enact laws is that of Parliament. Thus Parliament cannot interpret the law enacted by it except by legislative fiat. There is, therefore, no conflict between the two principles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eaning or interpretation to section 29, the legislature does not merely state that the section did not mean what the Courts said it meant but has furnished its own meaning and interpretation of the section and has made that meaning and interpretation applicable retrospectively. By virtue of the amendment, therefore, the judgments of this Court have not been reversed. The basis on which the judgments were delivered has, however, been removed. 46. Explanation (2) could have been enacted in the original section itself if the legislature had contemplated the ratio of the said judgment. It could have been enacted in the original section itself that a notice for extension was not necessary. The clarificatory amendment in explanation (2) was probably necessary as although the proviso to the unamended section had been done away with in the amended section, the effect of the judgment remained. The legislature obviously wanted to do away with the same. 47. What is even more important is this. We have already held that the opening part of Section 29(4) as amended operates retrospectively. Thus, the period for making an assessment within six years after the date when the annual statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking the assessment under the old proviso could be extended by three years inter-alia only upon the order for the same being communicated. This requirement has not been taken care of by the amendment. 50. This argument overlooks sub-section (10-A) of section 29. It also overlooks the fact that the opening part of the amended section 29(4) is itself retrospective as is the explanation (1) thereto. IV. Explanation (2) is contrary to the Rules of natural justice and is, therefore, constitutionally invalid and void. 51. Relying upon the judgment of the Supreme Court in Union of India v. Tulsiram Patel and others 1985(3) SCC 398, it was contended that the explanation (2) being contrary to the rule of natural justice is constitutionally invalid. Even assuming this to be so, it would make no difference. As we mentioned earlier, even the opening part of the amended section 29(4) is retrospective. In the result, it would make no difference to the respondent s right to complete the assessment within the time specified in the amended section 29(4). The opening part of the amended section 29(4) does not require an extension. It provides a period of six years. V. Explanation (2) h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is harsh, unfair, arbitrary and is excessively and unreasonably retrospective and is, therefore, violative of Articles 14 and 19 of the Constitution. 55. It was contended that the amendment must be struck down as unconstitutional on the ground that it is unreasonable, excessive and harsh. In support of this contention, two judgments were relied upon on behalf of the petitioners which we will now refer to. 56. In National Agricultural Cooperative Marketing Federation of India Ltd. and another v. Union of India and others (2003) 5 Supreme Court Cases 23, the Supreme Court held:- 27. The main thrust of the appellant s argument has been to the constitutionality of the amendment. The substitution in 1998 of the phrase grown by in Section 80-P(2)(a)(iii) of the Act to operate from 1968, it is argued, amounts to a new levy and an unforeseen financial burden imposed on apex societies like the appellant with effect from the past 30 years. If this were so doubtless the Court may have considered the amendment to be excessively and unreasonably retrospective violating the appellant s fundamental rights under Articles 19(1)(g) and 14 of the Constitution. But in fact the grievance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t it being declared invalid. 58. In support of this contention, firstly detailed tables were prepared to indicate the last dates for filing the last quarterly returns, the last dates for filing the annual statements and the last dates for assessment. The table also indicates the date upto which the accounts are to be retained, the date upto which the audit can be conducted and the date upto which the assessment can be framed both before and after the Amendment Act of 15.11.2013 in respect of the assessment years 2006-07, 2007-08 and 2008- 09. The said dates were also stated in respect of the year 2009-10. The dates were based on Sections 28(3), 29(4), 44 of the Punjab Value Added Tax Act, 2005, Rules 36(1),41 and 47 of the Punjab Value Added Tax Rules, 2005 and Rule 6 of the Central Sales Tax (Punjab) Rules, 1957. 59. It is not necessary to set out the accurate, illustrative and well prepared table. Nor is it necessary to set out the provisions of the PVAT or the Punjab Value Added Tax Rules, 2005 and the Central Sales Tax (Punjab) Rules, 1957, as contended by the petitioner. They indeed provide that an assessee was bound to keep and maintain its books of account for a period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the way of an assessee. It is not, however, such an insuperable difficulty as to render the enactment unconstitutional. 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. VII. The proviso to the amended section 29(4) is contrary to the main section and, therefore, illegal and void. 61. It was contended on behalf of the petitioner that the proviso introduced by the amendment is contrary to the main section and is therefore, illegal and unconstitutional. In support of this contention, the petitiones relied upon the following observation of the Supreme Court in J.K.Industries Ltd. and others v. Chief Inspector of Factories and Boilers and ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t which is foreign to the main enactment. This view has held the field till date. 62. We do not see how this judgment supports the petitioner s contention. It infact militates against it. As held in paragraph-33, a section and the proviso must be construed as a whole and the proviso is used to remove special cases from the general enactment and provide for them specially. The reliance upon the last sentence in paragraph-34 is also not well founded. In the present case, the proviso qualifies the situation that would arise out of the main section. Though an assessment under sub sections (2) and (3) of Section 29 may be made within six years, this would not be so in respect of the assessment year 2006-07. For the assessment year 2006-07, the assessment can be made till 20.11.2014. It is not foreign to the main provision. It is infact directly in respect thereof. But for the proviso the main section could not have operated in respect of the assessment year 2006- 07. By virtue of the proviso, the assessment can also be made in respect of the assessment year 2006-07 till 20.11.2014. There is no inconsistency between the main provision and the proviso. The proviso merely grants a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making an assessment in respect of the year 2006-07. The proviso is infact an exception to the main section. But for this exception an assessment in respect of the year 2006-07 could not have been made by 20.11.2014. 65. Paragraph 15 of the judgment of the Supreme Court in Binani Industries Ltd. Kerala v. Assistant Commissioner of Commercial Taxes VI Circle Banglore and others 2007(15) SCC 435 does not carry the petitioner s case further either. It reads as under:- 15. The normal function of a proviso is to except something out of the enactment or to qualify something enacted therein which but for the proviso would be within the purview of the enactment. As was stated in Mullins v. Treasurer of Survey [(1880) 5 QBD 170 : 42 LT 128] (referred to in Shah Bhojraj Kuverji Oil Mills and Ginning Factory v. Subhash Chandra Yograj Sinha [AIR 1961 SC 1596] andCalcutta Tramways Co. Ltd. v. Corpn. of Calcutta [AIR 1965 SC 1728] ) when one finds a proviso to a section the natural presumption is that, but for the proviso, the enacting part of the section would have included the subject-matter of the proviso. The proper function of a proviso is to except and to deal with a case which woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain/enacting part of the section. The proviso expressly qualified the enacting part of the section and created an exception to it. VIII. The amendment is invalid as it extends the period of reassessment even where the original period for assessment has expired. 67. The next question is whether by an amendment the legislature is entitled to extend the period for assessment even though the original period for assessment has expired. The judgment of the Supreme Court in Additional Commissioner (Legal) and another v. Jyoti Traders and another 1999(2) SCC 77 supports the respondents case that it can. In that case, the assessment in respect of one of the parties for the year 1985-86 under the U.P.Trade Tax Act, 1948 was completed on 27.11.1989 and in respect of the other party was completed on 28.02.1990. The period for assessment or reassessment which was four years under Section 21 of that Act for the said assessment expired on 31.03.1990. Section 21 of the Act underwent an amendment and the provision in that respect came into force with effect from 19.02.1991. The amendment prescribed the period of eight years. Taking advantage of the amendment, the authorities issued notices t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment under Section 21 which is to be done before the expiration of 8 years of that particular assessment year. Read as it is, these provisions would mean that the assessment for the year 1985-86 could be reopened up to 31-3-1994. Authorisation by the Commissioner of Sales Tax and completion of assessment or reassessment under sub-section (1) of Section 21 have to be completed within 8 years of the particular assessment year. Notice to the assessee follows the authorisation by the Commissioner of Sales Tax, its service on the assessee is not a condition precedent to reopen the assessment. It is not disputed that a fiscal statute can have retrospective operation. If we accept the interpretation given by the respondents, the proviso added to sub-section (2) of Section 21 of the Act becomes redundant. Commencement of the Act can be different than the operation of the Act though sometimes, both may be the same. The proviso now added to sub-section (2) of Section 21 of the Act does not put any embargo on the Commissioner of Sales Tax not to reopen the assessment if the period, as prescribed earlier, had expired before the proviso came into operation. One has to see the language of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lish v. Cliff, 1914-2 Ch 376. In paragraph-6, the Supreme Court observed that if the right to act under the earlier statute had come to an end it could not revived by the subsequent amendment which extended the period of limitation unless otherwise provided. The operative words are unless otherwise provided . In other words, it was not held that even if it was otherwise provided, the principle would apply. 70. In J.P.Jani, Income Tax Officer, Circle IV, Ward-G, Ahmedabad and another v. Induprasad Devshanker Bhatt, AIR 1969 SC 778, the Supreme Court held that it was not permissible to construe section 297(2)(d)(ii) of the Income Tax Act, 1961 as reviving the right of the Income Tax Officer to reopen an assessment which was barred under the old Act, for that would tantamount to giving a retrospective operation to the section which was not warranted by the express language of the section or by necessary implication of the section. The Supreme Court applied the well known rule of interpretation that unless the terms of the statute expressly so provide or unless there is a necessary implication, retrospective operation should not be given to the statute so as to affect, alter or des ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e regulating period of limitation must receive strict construction. Law of limitation is intended to give certainty and finality to legal proceedings and to avoid exposure to risk of litigation to a litigant for an indefinite period on future unforeseen events. Proceedings, which have attained finality under existing law due to bar of limitation cannot be held to be open for revival unless the amended provision is clearly given retrospective operation so as to allow upsetting of proceedings, which had already been concluded and attained finality. The amendment to subsection (1) of Section 150 is not expressed to be retrospective and, therefore, has to be held as only prospective. The amendment made to sub-section (1) of Section 150 which intends to lift the embargo of period of limitation under Section 149 to enable the authorities to reopen assessments not only on the basis of orders passed in the proceedings under the IT Act but also on order of a court in any proceedings under any law has to be applied prospectively on or after 1-4-1989 when the said amendment was introduced to sub-section (1). The provision in sub-section (1) therefore can have only prospective operation to ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, Section 6 cannot be applied to every repealed provision or enactment regardless of the intention of the legislature and the language used in the repealing provision. We do not see how these observations can be of any assistance to the petitioners. 76. In Bharat Petroleum Corporation Ltd. v. State of Punjab and another, 2010(3) VST, 201, a Division Bench of this Court framed the following question:- (B) Whether the rights vested in the assessee acquired on 30.4.2005 would extinguish by an amendment made by Act No. 10 of 2005 w.e.f. 12.5.2005 although the amendment has not been given retrospective effect or could the time barred assessment be re-opened on the basis of statutory extension of time. Thus the parties proceeded on the basis that the amendment had not been given retrospective effect. The judgment does not support the petitioners submission. IX. Explanation (1) makes the old proviso redundant and is, therefore, invalid and irrational. 77. It was contended that if the amendment is given effect to from 01.04.2006 as is sought to be done by the proviso and explanation (1) to the amended section, the proviso in the unamended section becomes redundant.The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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