S B GURBAX SINGH Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS petition under articles 226 and 227 of the Constitution has been filed for quashing the notice dated 25th November, 1966, (copy of which is annexure C to the petition), issued by the Sales Tax Officer, W-27, Vikas Bhawan, New Delhi, that the petitioner should produce the relevant documents to arrive at a correct calculation for the purpose of making a fresh assessment.

(2.) A few facts which have led to the filing of this writ petition may alone be noticed. The petitioner, a building contractor who was registered as a dealer under the Bengal Fiance (Sale Tax) Act of 1941, as extended to the Union Territory of Delhi (hereinafter called the Act), was assessed to sales tax for the assessment year 1954-55. He filed a writ petition (Civil Writ No. 540-D of 1959) challenging the assessment; the writ petition was accepted by S. K. Kapur, J. , by his order dated 29th April, 1966 (reported in S. B. Gurbaksh Singh v. Sales Tax Officer [[1966] 18 S. T. C. 500] ). The contention of the petitioner, which was accepted, was that the assessment had been made in accordance with rule 28 of the Delhi Sales Tax Rules, 1951, which was held to be ultra vires for excessive delegation. After quashing the assessment the following observations were made : " It will, however, be open to the respondents to make fresh and/or proper assessment in accordance with law. "

(3.) HIDAYATULLAH, J. (as he then was), dealing with the case arising out of section 34 of the Income-tax Act, 1922, pertaining to a period of limitation similar to the one in question observed as follows in S. C. Prashar v. Vasantsen [[1963] 49 I. T. R. 1 at 55-56 and 67 (S. C.); A. I. R. 1963 S. C. 1356 at 1386 and 1392] : " Under the scheme of the Income-tax Act a liability to pay tax is incurred when according to the Finance Act in force the amount of income, profits or grains is above the exempted. That liability to the State is independent of any consideration of time and, in the absence of any provision restricting action by a time-limit, it can be enforced at any time. What the law does is to prevent harassment of assessees to the end of time by prescribing a limit of time for its own officers to take action. This limit of time is binding upon the officers, but the liability under the charging section can only be said to be unenforceable after the expiry of the period under the law as it stands. In other words, though the liability to pay tax remains, it cannot be enforced by the officers administering the tax laws. If the disability is removed or according to a new law a new time-limit is created retropectively, there is no reason why the liability should not be treated as still enforceable. " And again : " We wish to say a few words about the well-known principle that subsequent changes in the period of limitation do not take away an immunity which has been reached under the law as it was previously. In this sense, statutes of limitation have been picturesquely described as 'statutes of repose'. . . . . . . . there is no repose till the tax is paid or the tax cannot be collected. What the law does by prescribing certain periods of time for action is to create a bar against its own officers administering the law. It tries to trim between recovery of tax and the possibility of harassment to an innocent person and fixes a duration for action from these two points of views. . . . . . . . An assessment can be said to become final and conclusive if no action can touch it but where the language of the statute clearly reopens closed transactions there can be no finality. We would not raise these prescribed periods to the level of those periods of limitation which confer not only immunity but also give titles by the passage of time. "