Case: The Sales Tax Officer Vs. Hanuman Prasad

was also the further addition that subject thereto, anything done or any action taken (including any appointment, notification, notice, order rule, form. Regulation certificate or licence in the exercise of any power conferred by or under the said Act shall, in so far as it is Act inconsistent with the provisions of this Act, be deemed to have been done or taken in exercise of the powers conferred by or under this Act, as if this Act were in force on the date on which such thing was done or action was taken. In view of this proviso it has to be held that when this new Act came into force on 1st April. 1959, all rights title, obligation or liability already acquired, accrued or incurred under the repealed Act by the respondent remained affected and intact. The rights and liabilities, which had been acquired or incurred under the repealed Act, included the right or liability to be assessed in accordance with the provisions of the repealed Act in respect of turnover of sales effected during the time when that Act was in force. The repealed Act laid down what turnover was taxable, how it was to be computed, and at what rate the tax was to be charged. These provisions clearly created rights as well as liabilities of dealers. Those rights and liabilities were thus preserved by S. 52 of the new Act. The assessment which was completed in the case of the respondent on 23rd May, 1959 was therefore, an assessment in accordance with the rights and liabilities of the respondent under the repealed Act: and this being so, it has to be held that the proviso to S. 19 (l) of the new Act was applicable to the case of the respondent. As a result of this proviso, the period of re-assessment on the ground of under-assessment, escapement or wrong deduction in the case of the respondent had to be as provided in S. 11-A (1) of the repealed Act, so that the period was three years and not five years as laid down by S. 19 (1) of the new Act. The notice dated 23rd October, 1962, was clearly issued beyond the period of limitation prescribed by S. 11-A (1) of the repealed Act and the proceedings in pursuance of it were time-barred.4. In the alternative, this question may be examined in another aspect. Section 11-A (1) of the repealed Act itself created a right in favour of the respondent not to be assessed in respect of turnover that was under assessed or had escaped assessment after the expiry of the period prescribed in that subsection. The proviso to S. 52 of the new Act preserved this right of the respondent, and on this ground also, the Sales-tax Officer was not competent to issue the notice for reassessment after that period of limitation had expired.5. In this connection, learned counsel for the Sales-tax Officer drew our attention to two subsequent pieces of legislation that amended the new Act. The first one of these is the Madhya Pradesh General. Sales Tax (Second Amendment) Act, 1963 (Act 23 of 1963) (hereinafter referred to as "the Amending Act").By Section 3 of this Amending Act, Section 19 (1) of the new Act was amended, so as to introduce some words in the principal clause of S. 19 (1) The words introduced were: "or any Act repealed by Section 52", and they were to be inserted at both the places where the word "this Act" occurred in the principal clause. It was urged that, as a result of this amendment this principal clause became applicable even to cases in which assessment had been made under the repealed Act, and taking into account the effect of this subsequent amendment, we should hold that the Sales-tax Officer was not incompetent to make the assessment when he purported issue the notice on 23rd October 1962, as the notice was issued within the period of five years laid down in the principal clause of S. 19 (1) of the new Act. It is, however significant that, though the principal clause of S. 19 (1) was amended, the proviso to was not deleted by the Amending Act. The proviso therefore, continued to remain in force. It is well-recognised that a proviso is added to a principal clause primarily with the object of taking out of the scope of that principal clause what is included in it and what the Legislature desires should be excluded. Consequently, even if it be held that the effect of the Amending Act was that, under the principal clause of S. 19 (1), the reassessment of the under-assessed or escaped turnover in the case of the respondent could be taken up within a period of five calendar years, that provision became ineffective because of the continued existence of the proviso. The Amending Act had not come into force when the High Court decided the petition, and consequently, the High Court had no occasion to consider its effect. However, as we have indicated above, the order made by the High Court remains unaffected even after this amendment, and the decision given that the limitation applicable to the case of the respondent is that laid down by S. 11-A (1) of the repealed Act is correct. It is true that the amendment in S. 19 (1) of the new Act made by the Amending Act was given retrospective effect under S. 5 of the Amending Act, but that also is immaterial, because, even after the amendment, the provision contained in the proviso had to prevail over the principal clause of S. 19 (1).6. The brought to our second piece of legislation notice was the Madhya Pradesh General Sales Tax (Second Amendment) Act, 1964 (Act 20 of 1964) by which also S. 19 (1) of the new Act was slightly amended. That amendment, however, has no hearing on the point which we are called upon to decide in this appeal, and consequently, needs no consideration.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]3. The facts given by us above clearly show that the original assessment of the respondent was in respect of a period when the new Act had not come into force. The respondent had filed the return, and even the notice in that connection was issued by the Sales-tax Officer prior to the enforcement of the new Act. The actual order of assessment was made on 23rd May, 1959 shortly after the new Act had come into force. The mere enforcement of that Act by the time the order of assessment was passed by the Sales-tax Officer cannot lead to the conclusion that the assessment of the respondent was made under the new Act and not under the repealed Act. It was under S. 52 of the new Act that the repealed Act was repealed, and that Section itself under the proviso laid down that such repeal shall not affect the previous operation of the said Act or any right, title, obligation or liability already acquired, accrued or incurred thereunder. There was also the further addition that subject thereto, anything done or any action taken (including any appointment, notification, notice, order rule, form. Regulation certificate or licence in the exercise of any power conferred by or under the said Act shall, in so far as it is Act inconsistent with the provisions of this Act, be deemed to have been done or taken in exercise of the powers conferred by or under this Act, as if this Act were in force on the date on which such thing was done or action was taken. In view of this proviso it has to be held that when this new Act came into force on 1st April. 1959, all rights title, obligation or liability already acquired, accrued or incurred under the repealed Act by the respondent remained affected and intact. The rights and liabilities, which had been acquired or incurred under the repealed Act, included the right or liability to be assessed in accordance with the provisions of the repealed Act in respect of turnover of sales effected during the time when that Act was in force. The repealed Act laid down what turnover was taxable, how it was to be computed, and at what rate the tax was to be charged. These provisions clearly created rights as well as liabilities of dealers. Those rights and liabilities were thus preserved by S. 52 of the new Act. The assessment which was completed in the case of the respondent on 23rd May, 1959 was therefore, an assessment in accordance with the rights and liabilities of the respondent under the repealed Act: and this being so, it has to be held that the proviso to S. 19 (l) of the new Act was applicable to the case of the respondent. As a result of this proviso, the period of re-assessment on the ground of under-assessment, escapement or wrong deduction in the case of the respondent had to be as provided in S. 11-A(1) of the repealedAct, so that theperiod was three years and not five years as laid down by S. 19 (1) of the new Act. The notice dated 23rd October, 1962, was clearly issued beyond the period of limitation prescribed by S. 11-A(1) of the repealedAct and theproceedings in pursuance of it wereis, however significant that, though the principal clause of S. 19 (1) was amended, the proviso to was not deleted by the Amending Act. The proviso therefore, continued to remain in force. It is well-recognised that a proviso is added to a principal clause primarily with the object of taking out of the scope of that principal clause what is included in it and what the Legislature desires should be excluded. Consequently, even if it be held that the effect of the Amending Act was that, under the principal clause of S. 19 (1), the reassessment of the under-assessed or escaped turnover in the case of the respondent could be taken up within a period of five calendar years, that provision became ineffective because of the continued existence of the proviso. The Amending Act had not come into force when the High Court decided the petition, and consequently, the High Court had no occasion to consider its effect. However, as we have indicated above, the order made by the High Court remains unaffected even after this amendment, and the decision given that the limitation applicable to the case of the respondent is that laid down by S. 11-A(1) of the repealedis correct. It is true that the amendment in S. 19 (1) of the new Act made by the Amending Act was given retrospective effect under S. 5 of the Amending Act, but that also is immaterial, because, even after the amendment, the provision contained in the proviso had to prevail over the principal clause of S. 19 (1).6. The brought to our second piece of legislation notice was the Madhya Pradesh General Sales Tax (Second Amendment) Act, 1964 (Act 20 of 1964) by which also S. 19 (1) of the new Act was slightly amended. That amendment, however, has no hearing on the point which we are called upon to decide in this appeal, and consequently, needs no consideration.In the alternative, this question may be examined in another aspect. Section(1) of the repealeditself created a right in favour of the respondent not to be assessed in respect of turnover that was under assessed or had escaped assessment after the expiry of the period prescribed in that subsection. The proviso to S. 52 of the new Act preserved this right of the respondent, and on this ground also, theOfficer was not competent to issue the notice for reassessment after that period of limitation had expired.