TMI Blog2019 (5) TMI 1178X X X X Extracts X X X X X X X X Extracts X X X X ..... periods within which legal proceedings be initiated or completed for enforcement of rights existing under substantive law. Statutes of limitation are thus retrospective in so far as they apply to all legal proceedings brought after their operation for enforcing cause of action accrued earlier. However, there is an exception to this rule - Where the right of action is barred under the law of limitation in force before the new provision came into operation and a vested right had accrued, the new provision cannot revive the time barred right or take away the accrued vested right. Identical issue came up for consideration before this Court in State of Punjab and others vs. Patiala Cooperative Sugar Mills Limited , [ 2015 (9) TMI 1327 - PUNJAB AND HARYANA HIGH COURT ] wherein it was held that in view of amendment of Section 11 of the Punjab General Sales Tax Act, 1948 by Ordinance of 1998 issued and effective from March 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escribed u/s 15 thereof became applicable to the said assessment proceedings - 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. Thus, the Tribunal rightly held the assessment orders being barred by limitation and allowed the appeals filed by the assesses. In case of failure on the part of the assessee to file return or respond to a notice, the assessing authority may proceed to assess to the best of his judgment within five years after the expiry of such period which would mean initiation of proceedings. It was concluded that the proceedings have to be concluded with the passing of the order. It is not merely initiation of proceedings for revision. In these cases, the factual position being different, the same cannot be of any advantage to the learned counsel for the appellant-revenue. Appeal dismissed both on merits as well as on the ground of delay. - VATAP No.130 of 2017 (O&M) - - - Dated:- 13-5-2019 - MR AJAY KUMAR MITTAL AND MRS MANJARI NEHRU KAUL, JJ. For The Appellant/Revenue : Ms. Mamta Singla Talwar, D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Chand Nathi Ram case, reported as 136 STC 261 (P H) wherein it has been laid down that the cases under the old law would continue to be governed by the old law? vi) Whether respondent No.1 is entitled to relief of legitimate tax payable by it voluntarily alongwith the returns, but avoided its payment willfully, solely on the ground of limitation? vii) Whether the learned Tribunal has erred in not adjudicating and not deciding the merits of the case although the same merited consideration? viii)Whether the learned Tribunal has not permitted respondent No.1 herein to take advantage of his own wrong as the delay in completion of its assessments was mainly on account of delaying tactics adopted by respondent No.1? 3. A few facts relevant for the decision of the controversy involved as narrated in VATAP No.130 of 2017 may be noticed. The appellant-revenue is the Excise and Taxation Commissioner, Haryana who is engaged in administration/enforcement of taxation laws of the State and collection of the tax revenues. Respondent No.1-assessee a registered dealer under the Haryana General Sales Tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x demand for the assessment years 1999-2000, 2000-01 and 2001-02 for ₹ 1,00,58,626/- calculated on the basis of the returns filed by the respondent assessee. Thereafter, the respondent assessee approached this Court through CWP No.12880 of 2001 against the notice/summons for recovery of voluntary tax and the orders of the meetings of the HLSC which had resulted in change of date of benefit from the date of commercial production to the date of issue of entitlement certificate. Vide interim order dated 27.8.2001, this court stayed the recovery of tax as arrears of land revenue. Vide order dated 10.5.2011, the writ petition was disposed of by this court, remanding the matter back to the HLSC to pass appropriate order in accordance with law after giving personal hearing to the respondent assessee. During the pendency of the said writ petition, the assessing authority commenced assessment proceedings of the assessee under section 28 of the HGST Act for assessment years 1999-2000 to 2002-03 by issuing notices in ST-25 on 24.11.2003 and 21.7.2005 as prescribed under the HGST Act. According to the appellant-revenue, the respondent assessee did not cooperate in the assessment proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within a period of five years to proceed to assess the case. Since the assessment proceedings were started within the time limits provided under the HGST Act, hence the bar of limitation would not be attracted in the present cases. Hence the instant appeals by the appellant-revenue. 4. We have heard learned counsel for the parties. 5. There is a delay in filing the appeals ranging from 58 days to 436 days for which no satisfactory explanation has been given by the learned counsel for the appellant-revenue. 6. Learned counsel for the appellant-revenue submitted that Section 61 of the Amended HVAT Act substituted sub section (1) of Section 61 by Act No.23 of 2006 dated 4.10.2006 with effect from 1.4.2003 inserting Proviso which inter alia provided that the repeal of HGST Act would not affect the previous operation of the said Act so repealed or anything done or suffered thereunder. It was claimed that the proceedings for assessment having been initiated within limitation under Section 28 of the HGST Act and when no limitation had been prescribed under the said provision for framing of the assessment, therefore, the assessment fram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctive from 1.4.2003 related to substantive law under the HGST Act and question of limitation being procedural in nature was to be governed by the HVAT Act. Reliance was also placed on the further amendment made to sub-section (1) of Section 61 of HVAT Act by Act No.3 of 2010 dated 02.04.2010 retrospectively from Ist April 2003. 8. The primary issue that arises in these appeals is whether the assessment orders passed by the assessing authority on 26.3.2009, for the assessment years 1999-2000 to 2002-03, were barred by limitation or not. 9. Before adjudicating the issue involved, it would be apposite to reproduce the relevant statutory provision i.e. Section 61 of HVAT Act (amended and unamended). Section 61(1) of the HVAT Act, 2003 w.e.f. 1.4.2003 as originally enacted and amended in 2006 and 2010 retrospectively from 01.04.2003 reads thus:- Section 61 (Repeal and Saving) (original) ( 1) The Haryana General Sales Tax Act, 1973 (20 of 1973) is hereby repealed. Section 61(1) (after the amendment dated 4.10.2006) vide Act No.23 of 2006 effective from 01.04.2003 reads ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 liability acquired, accrued or incurred under the said Act or affect any act done or any action taken including any appointment, notification, notice, order, rule, form, regulation certification in exercise of any power conferred by or under the said Act and any such act done or any action taken shall be deemed to have been done or taken in exercise of the powers conferred 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. However, Act No.3 of 2010 dated 02.04.2010 retrospectively with effect from 01.04.2003 provided that where any action, power, right, title, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 assessment or order has attained finality then it states that the period of limitation to revise such assessment or order prescribed as five years in Section 40 of the HGST Act shall be extended to eight years. 12. Having noticed and crystallized the meaning of the provision contained in Section 61(1) of the HVAT Act and also Section 61(2)(a) of the HVAT Act, effective from 1.4.2003, it would be essential to analyse the controversy involved here in these appeals. As noticed earlier, the revenue contended that in the absence of any specific period prescribed under HGST Act, the assessments for assessment years 1999 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, 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 General Sales Tax Act, 1948 (in short, the 1948 Act ) by Ordinance of 1998 issued and effective from 3.3.1998 which was replaced by Punjab Act 12 of 1998 published on 20.4.1998 whereby limitation of three years for completion of the assessment has been prescribed, any assessment order for assessment years upto 1997-98 can be passed after 30.4.2001. 9. In order to appreciate the controversy in its true perspective, it would be apposite to refer to the unamended provisions of Section 11(1), (2) and (3) of the 1948 Act and the amended p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey 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 right is not revived by the provision of the latest statute. The Statutes of limitation are prospective in the sense that they neither have the effect of reviving the right of action which is already barred on the date of their coming into operation, nor do they have effect of extinguishing a right of action subsisting on that date. The legal position has been enunciated by the Apex Court in T.Kaliamurthi's case (supra) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 prescribed for furnishing the last return in respect of such return for both assessment of tax due under sub section (1) as well as sub section (3) of section 11 of the PGST Act. 30. It is also not disputed that the notices in form ST XIV for the assessment years 1995-96 and 1996- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot 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 out in the year 1998 prescribing period of three years for framing of assessment will apply in all pending cases. Thus, the question was answered against the revenue. 16. In Thirumalai Chemicals Limited vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 prospective in the sense that neither have the effect of reviving the right of action which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 prescribed under Section 15 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter 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 con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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