TMI Blog2023 (9) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... ned? - HELD THAT:- What has to be interpreted is the expression proceed to determine as it occurs in sub-Section (1) of Section 25 as well as the third proviso to the said sub-Section as amended in Finance Act, 2017. No doubt, in both the provisions, the expression used is proceed to determine. The said expression must be considered in light of the words that occur prior to and subsequent to the said expression. Under sub-Section (1) of Section 25, the intention of the use of the expression proceed to determine is in the context of initiation of proceedings at any time within five years (now six years after the 2018 amendment) from the last date of the year to which the return relates. The object and purpose is that there cannot be a belated initiation of proceedings and at the whims and fancies of the Department so as to re-open stale returns, which had already been concluded under the provisions of the said Act. However, the object of the proviso which also uses the words proceed to determine must be in the context of completion of the Assessment which had already been initiated in accordance with sub-Section (1) to Section 25 within the time-frame as prescribed therein. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Romy Chacko, AOR Mr. C. K. Sasi, AOR Mr. Ramesh Babu M. R., AOR Mr. P.R. Ajith Kumar, Adv. Mr. Pranav P.P., Adv. Mr. Aljo K. Joseph, AOR Mr. Ajeet Kumar, P.R., Adv. Ms. Shelna K, Adv. Mr. Ranjan Kumar, Adv. Ms. Prerana Chaturvedi, Adv. Ms. Manju Jetley, AOR Mr. Vipin Nair, AOR Mr. P.B. Suresh, Adv. Mr. Arindam Ghosh, Adv. Mr. P.B. Shashank, Adv. Mr. Govind Manoharan, Adv. Mr. A. Karthik, AOR Ms. Smrithi Suresh, Adv. Mr. Arsh Khan, Adv. Ms. Sreepriya K, Adv. Ms. Neeta Sanjay Savale, Adv. Mr. Jogy Scaria, AOR Mr. Suvidutt M.s., AOR Ms. Deepika Singh, Adv. Ms. Disha Puri, Adv. Ms. Renu Yadav, Adv. Mr. Moirangmayum Chittaranjan Singh, Adv. Mr. Aman Khullar, Adv. Mr. R. Jawaharlal, Adv. Mr. Siddharth Bawa, Adv. Mr. Anuj Garg, Adv. Mr. Mohit Sharma, Adv. Mr. Mayank Kshirsagar, AOR Mr. K.parameshwar, AOR Ms. Arti Gupta, Adv. Ms. Kanti, Adv. Mr. Chinmay Kalgaonkar, Adv. Mr. A. Raghunath, AOR Mr. Jay Salva, Sr. Adv. Mr. Prakash Shah, Adv. Mr. Prabhat Kumar Chaurasia, Adv. Mr. Jasdeep Singh Dhillon, Adv. Mr. Rahul Gupta, AOR Ms. Liz Mathew, AOR Ms. Bagavathy Vennimalai, Adv. Ms. Mallika Agarwal, Adv. Mr. Arvind P Datar, Sr. Adv. M/S. K J John And Co, AOR Mr. Pratap Venugopal, Adv. Ms. Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2022, C.A. No. 4339/2022, Diary No(s). 11977/2022, C.A. No. 4446/2022, C.A. No. 4307/2022, C.A. No. 4459/2022, C.A. No. 4368-4372/2022, C.A. No. 4440-4444/2022, C.A. Nos. 4413-4417/2022, C.A. Nos. 4466-4470/2022, C.A. Nos. 4481- 4485/2022, C.A. Nos. 4408-4412/2022, C.A. Nos. 4474/2022, C.A. No. 4473/2022, C.A. No. 4314/2022, C.A. No. 4315/2022, C.A. No. 4476/2022, C.A. No. 4322/2022, C.A. No. 4321/2022, C.A. No. 4319/2022, C.A. No. 4324/2022, Diary No(s). 15704/2022, C.A. No. 173/2023, C.A. Nos. 4343-4347/2022, C.A. Nos. 4423-4429/2022, C.A. Nos. 4388-4392/2022, C.A. Nos. 4418-4422/2022, C.A. Nos. 4460- 4464/2022, C.A. Nos. 4383-4387/2022, C.A. Nos. 4348-4352/2022, C.A. Nos. 4477-4480/2022, C.A. Nos. 4373-4377/2022, C.A. No. 4313/2022 C.A. No. 4325/2022 JUDGMENT Delay condoned. Delay of 98 days in Diary No(s).11977/2022 and 308 days in Diary No(s). 15704/2022 condoned. Leave granted in Diary No(s).11977/2022 and Diary No(s). 15704/2022. In this batch of cases, the Assistant Commissioner (Assessment), State of Kerala and the Deputy Commissioner, Commercial Taxes, Thrissur, Kerala have assailed the judgment of the Division Bench of the Kerala High Court d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e given a reasonable opportunity of being heard. PROVIDED FURTHER that where the escapement is due to the application of incorrect rate of tax, no assessment under this sub-section shall be made where the dealer files revised return and pays the tax which has escaped assessment along with interest under sub-section (5) of section 31 and thrice the interest as settlement fee. PROVIDED ALSO that the period for the completion of assessments including those subjected to extension under Section 25B which expires on 31st March, 2015 shall be extended up to 31st March, 2016 . (2) The time limit mentioned in sub-section (1) shall not apply where the turnover which escaped assessment relates to any business done by such dealer as benamidar or through a benami or where it relates to a dealer, who being liable to get himself registered under this Act and the rules made thereunder, has failed to do so or where the escaped turnover is on account of the dealer having claimed any input tax credit on the basis of any bogus or forged documents. (3) In making an assessment under sub-section (1), the assessing authority may, if it is satisfied that the escape from assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended as under: Provided also that the period for proceeding to determine any assessment including those subjected to extension under Section 25B which expires on 31.03.2017 shall be extended up to 31st March, 2018. (Underlining by us) The amendment made to the third proviso to sub-section (1) of Section 25, in the Finance Act, 2017 as extracted hereinabove is sought to be relied upon by the appellants in these cases. We have heard learned Senior Counsel Mr. Rakesh Dwivedi for the appellants and learned Senior Counsel Mr. S. Ganesh and other learned senior counsel and other counsel for the respondents and perused the material on record. It was contended by Mr. Rakesh Dwivedi that the object and purpose of providing the third proviso to sub-section (1) of Section 25 was in fact to extend the limitation period for initiation of proceedings with regard to assessment of escaped turnover even though under the unamended sub-section (1) of Section 25 it was five years from the last date of the year to which the return relates and later substituted by the words six years . The object and purpose of the proviso was to extend the initiation of the proceedings for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpression proceed to determine in sub-section (1) of Section 25 and in the third proviso has to be contextually interpreted and cannot carry the same meaning or otherwise it may lead to an absurdity. In this context, it was submitted that a proviso cannot mutilate the main sub-section and extend the period of limitation, in contravention of what has been prescribed in subsection (1) of Section 25 of the Act. In this regard, reliance was placed on S. Sundaram Pillai v. V.R. Pattabiraman, (1985) 1 SCC 591, and other connected cases in order to buttress their submissions. Having heard learned Senior Counsel for the appellants and learned Senior Counsel and other counsel for the respondents, we find that the controversy in these appeals is in a very narrow compass inasmuch as the question that arises is, whether, the third proviso to sub-section (1) of Section 25 extends the period of limitation for the initiation of proceedings for reassessment insofar as escaped turnover is concerned. In this context, what has to be interpreted is the expression proceed to determine as it occurs in sub-Section (1) of Section 25 as well as the third proviso to the said sub-Section as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elays in completion of the proceedings which were not in the interest either of the department or the assessee. In the absence of there being any time-frame prescribed under sub- Section (1) of Section 25 for the completion of proceedings which meant that the Legislature had not fixed any outer limit for the same under sub-section (1) of Section 25 of the Act, and taking note of the said lacuna pointed out by the Full Bench, in the Kerala Finance Act 2010 and later by successive amendments, enlargement of time by only one year at a time for the purpose of completion of proceedings was provided by adopting a legislative device of substitution of the inserted provision w.e.f. the Finance Act, 2010 till 2018 including the period(s) of assessment(s) under consideration. The exact words of the Full Bench are extracted as under: 5. The effect of the aforenoted third proviso introduced with effect from 1.4,2010, which says that the time limit for the completion of assessment under sub-section (1) of S. 25 of the K.V.A.T. Act shall be extended upto a particular date given in that proviso, may appear to indicate that the legislature had understood sub-section (1) of S. 25 of the K.G.S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by learned Senior Counsel, Shri Dwivedi, that the object of the proviso was in fact to extend the time period of one year to initiate the proceedings and hence, the expression proceed to determine in sub-section (1) of Section 25 of KVAT Act as well as the subsequent third proviso of the said section must be given the same meaning which would according to learned Senior Counsel mean that the proviso also extends the period of limitation by one year at a time by way of substitution of the earlier period being made at every Financial Year under the respective Finance Acts for the initiation of proceedings of reassessment under Section 25 of the Act. We do not think that such a meaning could be given to the expression proceed to determine as submitted by learned senior counsel insofar as the third proviso to sub-section (1) of Section 25 is concerned. Firstly, the said expression is only w.e.f. the Finance Act, 2017 and not for the earlier period as the words used in the third proviso for the earlier period is completion of assessments Thus, the period for completion of assessments cannot mean initiation of proceedings. Although the Legislature may use the very same expressi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the enactment and ordinarily, a proviso is not interpreted as stating a general rule. In other words, a proviso qualifies the generality of the main enactment by providing an exception and taking out, as it were, from the main enactment, a portion which, but for the proviso, would fall within the main provision. Further, a proviso cannot be construed as nullifying the provision or as taking away completely a right conferred by the enactment. The following para from the decision in Sundaram Pillai (supra) is extracted as under: 36. While interpreting a proviso care must be taken that it is used to remove special cases from the general enactment and provide for them separately. 37. In short, generally speaking, a proviso is intended to limit the enacted provision so as to except something which would have otherwise been within it or in some measure to modify the enacting clause. Sometimes a proviso may be embedded in the main provision and becomes an integral part of it so as to amount to a substantive provision itself. 39. In the case of STO, Circle- I, Jabalpur v. Hanuman Prasad [(1967) 1 SCR 831 : AIR 1967 SC 565 : (1967) 19 STC 87] Bhargava, J. observed thus: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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