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TMI Blog2019 (5) TMI 1178X X X X Extracts X X X X X X X X Extracts X X X X ..... following substantial questions of law:- "i) Whether on the facts and in the circumstances of the case, the learned Tribunal has erred in ignoring the limitation of five years available under Section 28 of the HGST Act, 1973 for the purpose of proceeding with the assessment? ii) Whether the learned Tribunal has misdirected itself in considering Section 61(2)(a) of the HVAT Act, 2003 for the purpose of period of limitation governing assessments under the HGST Act, 1973? iii) Whether the learned Tribunal has erred in adopting a contradictory stand vis-a-vis its earlier position in HM Mehra & Co. vs. State of Haryana case as well as the decision of this Hon'ble Court in Mahabir Techno Limited vs. State of Haryana and another (as discussed above) where limitation of five years as available under Section 40 of the erstwhile HGST Act 1973 for revision was held to be applicable to cases under the repealed law? It is submitted that new law provided a limitation of three years for initiating and completing revisional proceedings. iv) Whether the learned Tribunal has erred in adopting two different lines of application of laws of limitation for the assessment under section 28 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter dated 18.10.2000, Annexure A.2 brought to the notice of the department that the tax concession under Rule 28C of the HGST Rules was available only from the issue of Entitlement Certificate by DETC and that there was no provision under the said Rule for allowing benefits from the date of production. Consequently, the HLSC in its 70th meeting on 5.12.2000 modified the grant of concession under Rule 28C of the HGST Rules as from date of issue of entitlement certificate instead of from the date of commercial production. The HLSC approved the case of the respondent-assessee under Rule 28C of the HGST Rules for availing tax concession to the extent of Rs. 1516.96 lacs during the period of 10 years from the date of issuance of entitlement certificate to be issued by the DETC. The entitlement certificate was however not issued to the respondent assessee as it had violated the conditions regarding payment of voluntary tax as provided under sub rule 3(c)(iv) of Rule 28C of the HGST Rules. Accordingly, DETC, Gurgaon(W) issued notice dated 6.7.2001 to the respondent assessee directing it to deposit the voluntary tax for the purpose of issuance of entitlement certificate under Rule 28C of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.7.2009. Vide order dated 21.3.2014, Annexure A.3, the first appellate authority dismissed the appeal of the respondent assessee and upheld the orders of the assessing authority. Thereafter, the respondent assessee filed second appeal before the Tribunal on 27.1.2015. The Tribunal vide its order dated 13.2.2017, Annexure A.4 upheld the respondent assessee's contention of bar of limitation and set aside the orders of the Assessing authority and the first appellate authority. The appellant-revenue asserts that the order dated 13.2.2017 passed by the Tribunal is wrong as it has deprived the State of its vested and substantial right to assess and collect accrued taxes under the HGST Act as saved under Section 61(1) of the HVAT Act. The Tribunal had erred in covering the cases under the provisions of the Section 61(2)(a) of the HVAT Act and holding that limitation period prescribed under the HVAT Act would apply being a procedural matter and did not even consider the merits of the case whereas the case of the respondent assessee was to be covered under the provisions of section 61(1) as amended on 4.10.2006 of the said Act. According to the appellant-revenue, the Tribunal erred in over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts whereas the period of limitation having been prescribed under the HVAT Act for framing of assessment, the law of limitation being procedural in nature would govern the finalization of the assessment in accordance therewith in respect of pending assessments. Reliance was placed on judgments in Ballarpur Ind. Limited vs. State of Punjab and others, (2010) 35 PHT 5 (P&H), State of Punjab and others vs. Patiala Cooperative Sugar Mills Limited, (2014) 76 VST 217 (P&H), State of Punjab vs. Doaba Cooperative Sugar Mills Limited, (2018) SCC OL P&H 1288, Thirumalai Chemicals Limited vs. Union of India and others, (2011) 6 SCC 739 and Khazan Chand Nathi Ram's case (supra). According to the learned counsel, for cases prior to coming into force of HVAT Act, where limitation for framing of assessment under the HGST Act subsisted, the same could be validly passed upto 31.3.2006 and not thereafter as the limitation of three years for framing of assessment under HVAT Act has been prescribed. Further, the arguments raised by the State counsel relating to applicability of Section 61(1) of the Act, it was controverted by contending that the Proviso was inserted by Act No.23 of 2006 dated 4.10.2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or anything duly done or suffered thereunder; or (b) affect any right, title, privilege, obligation or liability acquired, accrued or incurred under the said Act; or (c) affect any act done or any action taken (including any appointment, notification, notice, order, rule, form, regulation, certificate) in the exercise of any power conferred by or under the said Act; and any such act done or any action taken in the exercise of the powers conferred by or under the said Act shall be deemed to have been done or taken in the exercise of the powers conferred by or under this Act as if this Act was in force on the date on which such act was done or action taken; and all arrears of tax and other amount due at the commencement of this Act may be recovered as if the same had accrued under this Act." 10. A perusal of Section 61(1) of the HVAT Act prescribes repeal of the Haryana General Sales Tax Act, 1973. Act No.23 of 2006 dated 4.10.2006 effective from 01.4.2003 inserted a proviso which provided that such repeal shall not affect the previous operation of the Act so repealed or anything duly done or suffered there under or affect any right, power, title, privilege, obligation or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be deemed to be eight years;" Section 61(2)(a) of the HVAT Act prescribes that notwithstanding the repeal of the HGST Act, all proceedings including appeals and revisions pending under the HGST Act at the commencement of the HVAT Act were to be disposed of by the corresponding authority under the HVAT Act. By virtue of Section 61(2)(a) of the HVAT Act, the Legislature, while repealing the HGST Act, saved the pending application, appeal, revision and other proceedings made or preferred to any authority under that Act and transferred the same for disposal by the officer or authority who would have had jurisdiction to entertain such application etc. under the new Act. Clause (a) of Section 61(2) of HVAT Act consists of two distinct sub parts. The first part deals with application, appeal, revision or other proceedings which had been pending under the HGST Act on 1.4.2003 whereas the second part beginning with the word "Notwithstanding" deals with review, revision or corrective action which could not be initiated or finalized in respect of any assessment, order or proceeding under the HGST Act because of any judgment, decree or order of any court or other authority and the said as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 3, 1998 which was replaced by Punjab Act 12 of 1998 published on April 20, 1998 whereby limitation of three years for completion of assessment had been prescribed, no assessment order for assessment years upto 1997-98 could be passed after April 30, 2001. It was further held that the amended provisions prescribing limitation would operate retrospectively and would govern all assessments pending relating to periods before the amendment came into operation. There was no limitation prescribed under Section 11 of the 1948 Act for passing an assessment order before the amendment. Therefore, the period of three years prescribed for passing an assessment order would be counted for all those assessment years under the amended provision effective from March 3, 1998. Accordingly, the assessment order passed on August 29, 2003 under Section 11(3) of the 1948 Act for the assessment year 1989-90 was clearly beyond the period of limitation of three years from the date of amendment and thus not sustainable in the eyes of law. The relevant observations read thus:- "8. The primary issue that arises for consideration in these appeals is whether in view of amendment of Section 11 of the Punjab G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f their coming into operation, nor do they have effect of extinguishing a right of action subsisting on that date. Bennion on Statutory Interpretation 5th Edn.(2008) Page 321 while dealing with retrospective operation of procedural provisions has stated that provisions laying down limitation periods fall into a special category and opined that although prima facie procedural, they are capable of effectively depriving persons of accrued rights and therefore they need be approached with caution." 13. Thus, the effect of the amendment by Ordinance dated 3.3.1998 which was replaced by Punjab Act 12 of 1998 published on 20.4.1998 would be that the amended provisions prescribing limitation would operate retrospectively and would govern all assessments pending relating to periods before the amendment came into operation. 14. Further, once a period of limitation prescribed by law expires, the right to sue or pass an order comes to an end. Resultantly, a vested or an accrued right arises in favour of a party. On expiry of the period of limitation, the right to sue comes to an end and if a particular right of action had become time barred under the earlier statute of limitation the rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in respect of assessment years falling upto 1997-98, no assessment order could be validly passed after 30.4.2001. 17. Identical issue in respect of assessment years prior to amendment of Section 11(3) of the PGST Act with effect from 3.3.1998 came up for consideration before this court in Ballarpur Industries Limited's case (supra), wherein it was held as under:- "29. There is no dispute that prior to the amendment of provisions of Section 11 of the PGST Act w.e.f 3.3.1998 there was no limitation provided amount of tax due from the dealer on the basis of returns where the Assessing Officer was satisfied with the returns furnished by the dealer. There was also no limitation provided for the assessing authority to assess the dealer under sub section (3) of section 11 if he was not satisfied with the returns by issuance of statutory notice in the prescribed form under sub section (2) of Section 11 of the Act and consideration of evidence produced, if any. However, the position was materially altered w.e.f 3.3.1998 which provided that the assessing authority was required to pass an order of assessment on the basis of returns within a period of three years from the last date pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or giving any relief to the petitioner company even after taking into account the limitation concept on the ground that the petitioner company cannot be absolved of their liability to pay purchase tax as per their returns by filing misleading statements, cannot be countenanced and thus are set aside. As a sequel thereto, impugned order dated 30.1.2005 (Annexure P.15) qua the demand of tax for the assessment years 1995-96 and 1996-97 is set aside." 15. In State of Punjab and others vs. The Doaba Cooperative Sugar Mills Limited, 2018 SCC Online P&H 1288, the issue was whether the law laid down by this Court in Shubh Timb Steel Limited vs. The State of Punjab, (2010) 31 VST (P&H) 85 holding that where no period was provided, the assessment order was to be passed within three years and in any event not beyond the period of five years, could be made applicable in the cases decided much before the pronouncement of the judgment. Reference was made to the decision of this Court in The Patiala Cooperative Sugar Mills Limited's case (supra) where the order of assessment passed after five years was set aside. In CIT vs. Sadhu Ram (1981) 127 ITR 517, it was held that the amendment carried ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal under sub-section (2) of Section 19 as also the proviso to subsection (2) of Section 19 conferring power on the Tribunal to condone delay in filing the appeal if sufficient cause is shown, are procedural rights. 28. We have already indicated that the proviso to sub- section(2) of Section 19 operates retrospectively, but the question is in that process, whether it impairs or takes away any accrued right, to plead a time bar and on facts whether the Company has lost its right of appeal to the Tribunal under FEMA. Law of Limitation 29. Law of limitation is generally regarded as procedural and its object is not to create any right but to prescribe periods within which legal proceedings be instituted for enforcement of rights which exist under substantive law. On expiry of the period of limitation, the right to sue comes to an end and if a particular right of action had become time barred under the earlier statute of limitation the right is not revived by the provision of the latest statute. Statutes of limitation are thus retrospective insofar as they apply to all legal proceedings brought after their operation for enforcing cause of action accrued earlier, but they are pros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provides three years for best judgment assessments from the close of the year to which the assessment relates. The HVAT Act came into force on 1.4.2003 and thus, the limitation period of three years was to be computed from that date for all assessment years prior to 1.4.2003 as in the present cases. Consequently, the limitation period for the assessment in the present cases ended on 31.3.2006 whereas the impugned assessment orders were passed on 26.3.2009 i.e. long after the expiry of limitation. Rs.Thus, the Tribunal rightly held the assessment orders being barred by limitation and allowed the appeals filed by the assesses. The relevant findings recorded by the Tribunal read thus:- "6. We have carefully considered that matter. According to section 61(2)(a) of the HVAT Act, notwithstanding the repeal of the HGST Act, all proceedings including appeals and revision pending under the HGST Act at the commencement of the HVAT Act were to be disposed of by the corresponding authority under the HVAT Act. In the instant cases, the assessment proceedings in question under the HGST Act were pending when the HVAT Act came into force and therefore under the HVAT Act, limitation period pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed long after the expiry of imitation period as already discussed. Contention raised on behalf of the state to save the said orders from the bar of limitation is completely unacceptable." 19. Adverting to the judgments relied upon by the learned counsel for the appellant-revenue, it may be noticed that in Khazan Chand Nathi Ram's case (supra), it was held that Section 61(2) of the HVAT Act does not give any retrospective effect to the provisions of the Act either expressly or by necessary implication. Sub section (2) of Section 61 of the HVAT Act contemplates transfer of pending proceedings pertaining to applications, appeals, revisions or other proceedings to the authorities constituted under the HVAT Act and to be disposed of by the authorities so constituted. It was further recorded that since expressly or by necessary intendment, no retrospective effect is sought to be given, the effect of repeal of the HGST Act is required to be examined with reference to Section 4 of the Punjab General Clauses Act, 1898 which contemplates that in the absence of any contrary intention expressly or impliedly, any right, privilege, liability or obligation under the old law will continue to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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