TMI Blog2020 (11) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... f the year to which the tax relates. Even a rectification of mistake can only be within three years of the expiry of the year to which the tax relates. In that context, it would not have been the intention of the executive Government to enable an assessment at any time after the return is filed when the rules provide a limitation period of re-opening either for determination of turnover or for revising the rate of tax or even for rectification of a mistake. We would have in that context found the reasonable time to be four years. Rule 6(5) does not provide for a period of limitation and when the General Sales Tax law provided a period of five years for re-opening an assessment which is deemed to be completed under Section 21, the same applies under the CST Act and the Rules. We cannot but observe that though Section 25 of the KVAT Act provides for re-opening of the completed assessment under Section 21, under the CST Rules the limitation provided for reopening of assessment on the ground of escaped assessment is four years. For the year 2005-06 and 2006-07, the notices issued under Section 6(5) were just prior to the close of the 8th year, i.e., respectively on 13.02.2014 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tute provides for a return to be filed and does not provide a limitation insofar as completion of assessment, then the proceedings would commence after the return was submitted and would continue till a final order of assessment was made in regard to the said return (sic para 19). S.B.Gurbaksh Singh considered the issue of exercise of suo motu power of revision and in the facts of that case found that there is no undue delay since the suo motu power was exercised within a few months of the passing of the appellate order. A passing remark was made that any unreasonable delay in exercise may affect its validity (sic para 15). Another three-Judge Bench in The Indian Aluminium Cables Limited v. The Excise Taxation Officer [ (1977) 1 SCC 120 ] clarified that S.B .Gurbaksh Singh does not lay down that the suo motu power cannot be exercised after a 'undue long delay'. Hence what is stated in Ghanshyamdas prevails and the two-Judge Bench in Bhattinda District Co -operative could not have held otherwise. The learned Senior Government Pleader would urge that this Court, the two different Benches, fell into an error in having relied upon S.B .Gurbaksh Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ond instance of a notice having been issued after the return is filed, the assessment proceedings would be pending till the final assessment is made. This would be the position even in the case of a notice issued when there is no return filed. When an escapement is alleged, re-opening has to be under Section 11-A; which can only be after an assessment is completed. Here we pause again to notice that in the present revisions the assessees contend that the notices were issued after seven or eight years. 5. In Ghanshyamdas , the specific question considered was: But where 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? We are concerned in this case with the last contingency . It was held that the statutory obligations by itself does not deem the proceedings to be initiated, for then it would be invoking a fiction not sanctioned by the Act. We also have to notice that the Constitution Bench also held so in paragraph 19: For the foregoing reasons we hold that a statutory obligation to make a return within a prescribed ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin a reasonable time. Any unreasonable delay in exercise may affect its validity (sic para 15). The aspect of reasonableness in initiation of suo motu powers was first judicially recognized by the three-Judge Bench in S.B.Gurbaksh Singh . This principle was also followed in other decisions of the Hon'ble Supreme Court in the matter of completion of assessments where no period of limitation was provided in the statute. 7. The reliance placed on Indian Aluminimum Cables Limited , another three-Judge Bench, by the learned Senior Government Pleader is to upset the declaration regarding reasonable time as propounded for the first time by another three-Judge Bench in S.B.Gurbaksh Singh . In this context we notice National Insurance Co. v. Pranay Sethi [ (2017) 16 SCC 680 ], a Constitution Bench decision which dilated upon per incuriam decisions based on a number of Constitution Bench decisions, some of which are referred to by us here under. 8. P radip Chandra Parija v. Pramod Chandra Patnaik [ (2002) 1 SCC 1 ] which dealt with a situation where a two-Judge Bench disagreed with a three-Judge Bench decision, directed the matter to be placed before a larger Bench o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment of a co-equal or larger Bench. There can be no scintilla of doubt that an earlier decision of co-equal Bench binds the Bench of same strength. Though the judgment in Rajesh case (2013) 9 SCC 54 was delivered on a later date, it had not apprised itself of the law stated in Reshma Kumari (2013) 9 SCC 65 but had been guided by Santosh Devi (2012) 6 SCC 421. We have no hesitation that it is not a binding precedent on the co-equal Bench . Going by the above referred Constitution Bench decisions, it cannot be said that the declaration of law made in S.B.Gurbaksh Singh has been unsettled by a co-ordinate Bench in Indian Aluminum Cables Limited. 10. In this context, we also notice the various decisions of the Hon'ble Supreme Court of co-equal strength dealing with the ouster of jurisdiction of the Civil Court under the Wakf Act. In Ramesh Gobindram v. Sugra Humayun Mirza Wakf [ (2010) 8 SCC 726 ], a Division Bench of two Judges held that the Civil Court's jurisdiction is excluded only in cases where the matter in dispute is required under the Wakf Act to be determined by the Tribunal as is discernible from Section 85 of the Act. Sections 6 and 7 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase is that in the absence of a period provided by statute for completion of assessment, an order of assessment made with some delay would not be without jurisdiction. Even in Indian Aluminium case , where the statute requires assessment to be completed within a reasonable time, the court indicated that the argument of the learned counsel that the assessment had to be completed within a reasonable time in order to be sustainable was not acceptable as a sound one . On facts, it was noticed in Bharat Steel Tubes Ltd. that though the assessment was delayed, the materials placed before the Court reveal that the assessee had gone to different Courts seeking an injunction against completion of assessment which was ultimately obtained in a suit filed. The notice was found to be within a reasonable period from the filing of returns. It was reiterated that in the absence of any prescribed period of limitation, the assessment has to be completed within a reasonable period. What such reasonable period would be, would depend upon facts of each case (sic). The need for expedition in completing assessments was specifically noticed in paragraph 15 . 12. In Ibrahimpatnam Taluk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther decisions, Bhattinda District C o -operative and Ibrahimpatnam Taluk Vyavasaya Coolie Sangham Ibrahim were cited with approval . Chhedi Lal Yadav v. Hari Kishore Yadav [ (2018) 12 SCC 527 ] again was concerned with the restoration of lands for which no limitation was prescribed. There an application for restoration of land was made 24 years after the right accrued, which was dismissed for default, the restoration of which was sought 16 years later. The dictum laid down was as follows: 13. In our view, where no period of limitation is prescribed, the action must be taken, whether suo motu or on the application of the parties, within a reasonable time. Undoubtedly, what is reasonable time would depend on the circumstances of each case and the purpose of the statute. In the case before us, we are clear that the action is grossly delayed and taken beyond reasonable time, particularly, in view of the fact that the land was transferred several times during this period, obviously, in the faith that it is not encumbered by any rights . 15. In our humble opinion Ghanshyamdas does not apply since there, in one of the appeals the notice was issued within four years and ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-rule (4). Sub-rule (4) speaks of determination of turnover to the best of judgment of the assessing authority for provisionally assessing the tax or taxes payable for the month or quarter as the case may be. Such provisional assessment under sub-rule (4) is permissible only till the close of the year after which sub-rule (5) comes into play. Sub-rule (5), as we noticed, does not provide any period of limitation. It enables the assessing authority, after the close of the year, to scrutinize the accounts, conduct an enquiry to his satisfaction as to the returns filed being correct and complete; so as to finalize under a single order the taxes payable under the Act for the preceding year or to the year to which the return relates. This again is the acceptance of the order and appropriation of the amounts paid in accordance with the returns to the tax payable; which does not have any limitation since it does not prejudice the assessee at all. 18. The second limb of sub-rule (5) empowers the assessing authority to assess the dealer in the case of default in filing the return or in the case of an incorrect or incomplete return having been filed. This has to be done after making an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ening of the completed assessment under Section 21, under the CST Rules the limitation provided for reopening of assessment on the ground of escaped assessment is four years. The Division Benches however having held the period provided under the KVAT Act to be applicable, we would not deviate from the same. 20. Applying the principle to the facts of the present cases, we find the assessments to be vitiated for reason of unduly long delay as found in S.B.Gurbaksh Singh . The year of assessment expires on the 31st of March. For the year 2005-06 and 2006-07, the notices issued under Section 6(5) were just prior to the close of the 8th year, i.e., respectively on 13.02.2014 and 19.03.2015. For the year 2007-08, notice was issued on 20.03.2015, just prior to the close of the 7th year. We also observe that since the period under Section 25 of the KVAT Act is adopted, the requirement therein is to proceed to determine within a period of five years from the expiry of the year. Hence, the notice itself has to be issued within five years which, in the above cases, have been issued long after the period provided and adopted as reasonable. We do not find any reason to differ from the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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