The Supreme Court recently clarified that once the previous assessments were already held to be invalid because of being time barred, in view of Section 19 of the Assam General Sales Tax Act, 1993, then Revenue Department could not take recourse to Section 21 by virtue of obtaining sanction from the Commissioner, to claim that the reassessment within four years is permissible with prior sanction from the Commissioner.
The Two Judge Bench comprising Justice J B Pardiwala and Justice Sandeep Mehta explained that, in construing fiscal statutes and in determining the liability of a subject to tax, one must have regard to the strict letter of law. The Bench therefore observed that Section 21 of the Assam General Sales Tax Act, 1993, would apply only in cases where no assessment has been made under any of the provisions of the 1933 Act within the time limits specified in Section 19, and the interpretation of the two provisions of the said Act by the High Court is completely incorrect.
The Bench referred to Section 21 of the 1993 Act, to note that in cases where no assessment has been made under any of the provisions within the time limits specified in Section 19, then, notwithstanding anything contained in that Section, the assessment would be permissible within four years from the date of expiry of the limitation period with prior sanction from the Commissioner.
The Bench also clarified that if the Revenue Department satisfies the court that the case falls strictly within the provisions of the law, the subject can be taxed. However, if the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter.
Briefly, in this case, when the concerned authority, having regard to the time limit prescribed under Section 19 of the Assam General Sales Tax Act, 1993, declared the assessments to be time-barred, the Department obtained the sanction of the Commissioner and invoked Section 21 of the 1993 Act, to bring the fresh assessment within the period of limitation.
The Appellant approached the Gauhati High Court, which held that the assessments were not barred by limitation if the sanction was duly obtained under Section 21, and that quashing of the earlier order shall not debar the fresh assessment being made in accordance with law after the sanction was granted. Challenging the same, the Appellant approached the Supreme Court.
Appearances:
Senior Advocate Manish Goswami, AOR Rameshwar Prasad Goyal, and Advocate Gaurav Shukla, for the Appellant/ Taxpayer
AOR Shuvodeep Roy, Senior AAG Chinmoy Pradip Sharma, along with Advocates Irfan Hasieb, Vijay Deora, and Aditya Agarwal, for the Respondent/ Revenue
