THE COMMISSIONER OF SALES TAX, LAHORE vs Messrs AMRITSAR SWEET SHOP, LAHORE and another
This matter concerns two petitions for leave to appeal filed by the Commissioner of Sales Tax against judgments of the Lahore High Court, which had ruled in favour of the respondents regarding the limitation period for sales tax assessments. The core dispute involves whether the sales tax assessment for the year 1956-57, completed on 30-6-1961, was time-barred under the Sales Tax Act. The High Court, relying on precedent, had previously held the assessment to be time-barred. The petitioner, however, contended that the insertion of subsection (1-A) into Section 28 of the Sales Tax Act by the Finance Act of 1974 fundamentally altered the legal position. The petitioner argued that this amendment was retrospective in nature and validated the assessment, a point not considered by the High Court. The Supreme Court, finding that the plea raised a pure question of law regarding the retrospective effect of the 1974 amendment, granted leave to appeal in both petitions to examine the impact of the amended Section 28 of the Sales Tax Act on the limitation period for assessments.
- Does the amendment introduced by subsection (1-A) of Section 28 of the Sales Tax Act via the Finance Act of 1974 have retrospective effect?
- Is a sales tax assessment completed after the lapse of the statutory period prescribed in the Sales Tax Act valid?
- Section 28(1-A), Sales Tax Act 1951
- Section 17(1), Sales Tax Act 1951
- Finance Act 1974
ORDER
1. ' DORAB PATEL, J.---As both these petitions for leave raise the same question of law and turn on similar facts, we will dispose them of by this order and we will first examine C.P.S.LA. 866 of 1976.
2. ' The dispute in this petition for leave is for the returns submitted by the respondent for the assessm ent year 1956-57. The assessment was made on 30-6-1961 and was challenged by the respondent in an appeal which was allowed by the Appellate Assistant Commissioner, who set aside the assessm ent on the ground that it has been made after the lapse of the statutory period of four years prescribed in the Sales Tax Act. The Sales Tax Officer challenged the Appellate Assistant Commissioner's order in an appeal which was allowed by the Income-tax Appellate Tribunal on 22-6-1968, therefore, the respondent moved the Tribunal under section 17(1) of the Sales Tax Act (hereinafter called the Act) and the question referred to the High Court was whether the sales tax assessm ent for 1956-57, which had been completed on 30-6-1961, was made within the time allowed under law. A Division Bench of the Lahore High Court answered this question in favour of the respondent by their judgment dated 27-1-1976 on the basis of the judgment of this Court in Messrs Nagina Silk Mills, Lyallpur v. C.I.T. (PLD 1963 SC 323) and other judgments. Hence this petition for leave.
3. Mr. Abdul Haq pressed the petition solely on the basis of subsection (1-A) of section 28 of the Act which was inserted in section 28 of the Act by the Finance Act of 1974. Learned counsel submitted that the said subsection (1-A) was retrospective in terms and fully supported the petitioner's claim, but had unfortunately not been examined by the learned Judges in their judgment.
4. ' The plea of learned counsel raises a pure question of law therefore, we grant leave to examine the effect of the amendment of subsection 28 of the Act by I the Finance Act, 1974.
5. ' The facts in C.P.S.LA. 334 of 1979 are similar except that the dispute relates to a different assessee and a different assessm ent year. But the question of law in the petition is the same as in C.P.S.LA.
6. No,866 of 1976, namely, whether the assessment of the Income-tax Officer is hit by the bar of limitation contained in the said Act and Mr. Abdul Haq stated that he would press this petition also solely on the basis of subsection (1-A) of section 28 of the Act.
7. ' We grant leave in both petitions to examine the effect of the amendment of section 28 of the Act.
8. The appeals will be heard together and will be made ready on the present record with liberty to the parties to file additional documents, if any.