Case: ADDL. COMMISSIONER (LEGAL) AND ANOTHER Vs. M/S. JYOTI TRADERS AND ANOTHER

3. Facts are similar.4. In the appeal of Lohia Machines Limited (arising out of SLP (C) No. 11015 of 1997) assessment for the year 1985-86 under the UP Trade Tax Act, 1948 (for short the Act) was completed on November 27, 1989. The Act is also called the U.P. Sales Tax Act. In the appeal of Jyoti Traders (arising out of SLP(C) No. 8866 of 1997) assessment for the year 1985-86 was completed on February 28, 1990. Period for assessment or re-assessment which is four years u/s 21 of the Act, for the assessment year 1985-86 expired, on March 31, 1990.5. The Act was extensively amended by the UP Sales Tax (Amendment and Validation) Act, 1991. The amending Act received the assent of the Governor of Uttar Pradesh on August 19, 1991. Different dates were prescribed for coming into force of various provisions of the amending Act. Section 21 of the Act also underwent an amendment and the relevant provision with which we are concerned came into force with effect from February 19, 1991.6. Taking advantage of the amendment to section 21, which now prescribed a period of eight years, the Sales Tax Officer after taking sanction from the Commissioner of Sales Tax issued notices to the respondents in both these appeals for re-assessment. In the case of Lohia Machine Ltd. sanction order is dated December 12, 1993 and notice is dated September 8, 1994. In the case of Jyoti Traders date of sanction order is November 12, 1993 and the notice had been issued for January 11, 1994. Sanctions given and notices thus issued were after more than four years with reference to the assessment year 1985-86 under the Act before its amendment.7. The respondent challenged both these orders of sanction of the Commissioner of Sales Tax and the notices for re-assessment in two separate writ petitions which allowed by the High Court and the sanction orders of the Commissioner as well as notices issued by the Sales Tax Officer were quashed. This led to filing of the present appeals.

Reasoning:
10. There are other amendments in section 21 which were made by subsequent amending Acts but with those we are not concerned.11. As noted above, the proviso to sub-section 2 of section 21 as inserted by the amending Act, 1991 came into force with effect from February 19, 1991.12. High Court had held that sanction issued by the Commissioner of Sales Tax for initiation of proceedings u/s 21 of the Act for the Assessment Year 1985-86 was barred by limitation and that the proviso to Section 21(2) of the Act which had been introduced with effect from February 19, 1991 and was inapplicable to the Assessment Year 1985-86 as the assessment order for this year had been made much before the introduction of the proviso to Section 21(2) of the Act. High Court was thus of the view that when the period for assessment or re-assessment for the year 1985-86 u/s 21 of the Act before insertion of the proviso to Sub-section (2) thereof had expired on March 31, 1990, the amendment had no effect.15. After this amendment to Rule 80(5) as aforesaid Commercial Tax Officer issued notices on November 7, 1974 re-opening the completed assessments for the years Chaitra Sudi 2023 and 2024. These notices were challenged in the Calcutta High Court by writ petition questioning the legality of the notices. High Court upheld the contention of the respondent-assessee that by the amendment of the Rule, assessments which had been completed could be revised within six years of the date of such completion, but when the right to revise the assessments under the unamended provision of the rule stood barred on the date of the amendment, such assessments could not be re-opened or revised. High Court said that the notification did not either expressly or necessary implication confer any power of revision of assessment which stood barred on the date on which it was issued. After referring to decision of this Court in the cases of ITO vs. S.K. Habibullah (1962) 44 ITR 8091, S.S. Gadgil, Income Tax Officer, Bombay Vs. Lal and Company, and J.P. Jani, Income Tax Officer, Circle IV, Ward G, Ahmedabad and Another Vs. Induprasad Devshanker Bhatt, [this Court held as under :-12. What, therefore, we have to seek is the clear meaning of the said Notification. If there be no doubt about the meaning the amendment brought about by the said Notification must be given full effect. If the language expressly so states or clearly implies, retrospectively must be given with effect from 1.11.1971, so as to encompass all assessments made within the period of six years theretofore, whether they have become final by reason of the expiry of the period of four years or not.13. BY reason of the said Notification, with effect from 1.11.1971, Rule 80(5)(ii) has to be read as barring the Commissioner (or other authority to whom power in this behalf has been delegated by the Commissioner) from revising of his own motion any assessment made or order passed under the Act or the rules if the assessment has been made or the order has been passed more than six years previous to 1.11.1971. Put conversely, with effect from 1.11.1971, Rule 80(5)(ii) permits the Commissioner (or other authority) to revise of his own motion any assessment made or order passed under the Act or the rules provided the assessment has not been made or the order passed more than six years previously. This being the plain meaning, the said Notification must be given full effect. Full effect can be given only if the said Notification is read as being applicable not only to assessments which were incomplete but also to assessments which had reached finality by reason of the earlier prescribed period of four years having elapsed. Where language as unambiguous as this is employed, it must be assumed that the legislature intended the amended provision to apply even to assessments that had so become final; if the intention was otherwise, the legislature would have so stated.21. In J.P. Jani income tax Officer Circle IV Ward G Ahmedabad & Anr. vs. Induprasad Devshanker Bhatt the assessment for the assessment year 1947-48 was completed on January 31, 1952 under the Income Tax Act, 1922. Thereafter, the income tax Officer received information that a certain profit made by the assessee had escaped assessment by reason of the assessee not having disclosed at the time of the original assessment. The income tax Officer, therefore, after obtaining the approval of the Commissioner of income tax issued notice dated March 27, 1956 u/s 34(1)(a) of the Income Tax Act, 1922. By order dated March 29, 1957, the income tax Officer completed re-assessment proceedings. Assessee went in appeal to the Appellate Assistant Commissioner who allowed the same by Order dated January 5, 1963 and set aside the order of assessment on the ground that there was no valid service of notice. By this time, Income Tax Act, 1961 had come into force. On January 4, 1963, the income tax Officer issued a notice calling upon the assessee to show cause why proceedings should not be taken u/s 147(a) of the new Act for bringing to tax the escaped profit of the assessee. Subsequently, notice u/s 148 of the Act new was issued. Assessee protested against this new notice on the ground that action under the old Act had become time barred and the new Act had no application to his case. After considering the provisions of the old Act and Section 297 of the new Act which repealed the old Act and on the effect of the repeal, this Court said that all the new sections must be read as applicable only to those cases where right of the income tax Officer to re-open the assessment was not barred under the repealed section. The Court held as under:In our view, the new statute does not disclose in express terms or by necessary implication that there was a revival of the right of the income tax Officer to re-open an assessment which was already barred under the old Act. This view is brone out by the decision of this Court in S.S. Gadgil, Income Tax Officer, Bombay Vs. Lal and Company,This Court observed that neither by express terms nor by necessary implication did Section 297(2)(d)(ii) disclosed that there was a revival of the right of the income tax Officer to re-open an assessment which was already barred under the old Act. The Section was applicable only to those cases where the right of the income tax Officer to re-open the assessment was not barred under the old Act.24. We do not think that decisions in the cases of Y. Narayana Chetty & Anr.; S.S. Gadgil and J.P. Jani ITO are of any help in interpreting the provisions of law now before us. In Y. Narayana Chettys case this Court upheld the contention of the assessee that the notice on the assessee is a condition precedent to the validity of reassessment made u/s 34 of the Income Tax Act, 1922. The Court said that notice prescribed under this section could not be regarded as a mere procedural requirement and that the income tax Officer gets jurisdiction to reassess only when notice is served on the assessee as required. In S.S. Gadgils case this Court said that in considering whether the amending statute applied the question was one of the interpretation and that the amending provision must be read subject to the rules that in the absence of an express provision or clear implication the legislature does not intend to attribute to the amending provision a greater retrospectivity than expressly mentioned.J.P. Janis case was concerned with the retrospective operation of the new Income Tax Act, 1961 when assessment proceedings under the old Income Tax Act, 1922 had already concluded and period to re-open the assessment under the old Act had become barred.25. The two decisions in the cases of The Ahmedabad Manufacturing & Calico Printing Co. Ltd. and Biswanath Jhunjhunwalla & Anr. are more closer to the issue involved in the present case before us. They laid down that it is the language of the provision that matters and when meaning is clear, it has to be given full effect. In both these cases this Court held that the proviso which amended the existing provision gave it retrospectivity. When the provision of law is explicit, it has to operate fully and there could not be any limits to its operation. This Court in Biswanath Jhunjhunwalla case said that if the language expressly so states or clearly implies, retrospectivity must be given to the provision. u/s 34 of the Income Tax, 1922, it is the service of the notice which is sine qua non, an indispensable requisite, for the initiation of assessment or reassessment proceedings where income had escaped assessment. That is not so in the present case. Under sub-section (1) of Section 21 of the Act before its amendment, the assessing authority may, after issuing notice to the dealer and making such inquiry as it may consider necessary, assess or reassess the dealer according to law. Sub-section (2) provided that except as otherwise provided in this Section no order for any assessment year shall be made after the expiry of 4 years from the end of such year. However, after the amendment, a proviso was added to sub-section (2) under which Commissioner of Sales Tax authorities the assessing authority to make assessment or reassessment after the are of any help in interpreting the provisions of law now before us. In Y. Narayana Chettys case this Court upheld the contention of the assessee that the notice on the assessee is a condition precedent to the validity of reassessment made u/s 34 of the Income Tax Act, 1922. The Court said that notice prescribed under this section could not be regarded as a mere procedural requirement and that the income tax Officer gets jurisdiction to reassess only when notice is served on the assessee as required. In S.S. Gadgils case this Court said that in considering whether the amending statute applied, the question was one of the interpretation and that the amending provision must be read subject to the rules that in the absence of an express provision or clear implication the legislature does not intend to attribute to the amending provision a greater retrospectivity than expressly mentioned. J.P. Janis case was concerned with the retrospective operation of the new Income Tax Act, 1961 when assessment proceedings under the old Income Tax Act, 1922 had already concluded and period to re-open the assessment under the old Act had become barred.26. The two decisions in the cases of The Ahmedabad Manufacturing & Calico Printing Co. Ltd. and Biswanath Jhunjhunwalla & Anr. are more closer to the issue involved in the present case before us. They laid down that it is the language of the provision that matters and when meaning is clear, it has to be given full effect. In both these cases this Court held that the proviso which amended the existing provision gave it retrospectivity. When the provision of law is explicit, it has to operate fully and there could not be any limits to its operation. This Court in Biswanath Jhunjhunwalla case said that if the language expressly so states or clearly implies, retrospectivity must be given to the provision. u/s 34 of the Income Tax, 1922, it is the service of the notice which is sine qua non, an indispensable requisite, for the initiation of assessment or reassessment proceedings where income had escaped assessment. That is not so in the present case. Under sub-section (1) of Section 21 of the Act before its amendment, the assessing authority may, after issuing notice to the dealer and making such inquiry as it may consider necessary, assess or reassess the dealer according to law. Sub-section (2) provided that except as otherwise provided in this Section no order for any assessment year shall be made after the expiry of 4 years from the end of such year. However, after the amendment, a proviso was added to sub-section (2) under which Commissioner of Sales Tax authorises the assessing authority to make assessment or reassessment after the expiration of 8 years from the end of such year notwithstanding that such assessment or reassessment may involve a change of opinion. The proviso came into force w.e.f. February 19, 1991. We do not think that sub-section (2) and the proviso added to it leave anyone in doubt that as one the date when the proviso came into force, the Commissioner of Sales Tax could authorise making of assessment or reassessment after the expiration of 8 years from the end of that particular assessment year. It is immaterial if a period for assessment or reassessment under sub-section (2) of Section 21 before the addition of the said proviso had expired. Here, it is the completion of assessment or reassessment u/s 21 which is to be done before the expiration of 8 years of that particular assessment year. Read as it is, these provisions would mean that the assessment for the year 1985-86 could be re-opened up to March 31, 1994. Authorisation by the Commissioner of Sales Tax and completion of assessment or reassessment under sub-section (1) of Section 21 have to be completed within 8 years of the particular assessment year. Notice to the assessee follows the authorisation by the Commissioner of Sales Tax, its service on the assessee is not a condition precedent to re-open the assessment. It is not disputed that a fiscal statute can have retrospective operation. If we accept the interpretation given by the respondents, the proviso added to sub-section (2) of Section 21 of the Act becomes redundant. Commencement of Act can be different than the operation of the Act though sometimes both may be the same. Proviso now added to sub-section (2) of Section 21 of the Act does not put any embargo on the Commissioner of Sales Tax not to reopen the assessment if period, as prescribed earlier, had expired before the proviso came into operation. One has to see the language of the provision. If it is clear, it has to be given its full effect. To re-assure oneself, one may go into the intention of the legislature in enacting such provision. The date of commencement of the proviso to Section 21(2) of the Act does not control its retrospective operation. Earlier the assessment/ re-assessment could have been completed within four years of that particular assessment year and now by the amendment adding proviso to Section 21(2) of the Act it is eight years. The only safeguard being that it is after satisfaction of the Commissioner of Sales Tax. The proviso is operative from February 19, 1991 and a bare reading of the proviso shows that the operation of this proviso relates and encompasses back to previous eight assessment years. We need not refer to the provisions of Income Tax Act to interpret proviso to Section 21(2) language of which is clear and unambiguous and so is the intention of Legislature. We are, thus, of the view that High Court was not right in quashing the sanction given by the Commissioner of Sales Tax and notices issued by the Assessing Authority in pursuance thereto.