STATE OF KERALA Vs. PERIYAR PLYWOODS

JUDGEMENT

(1.) Despite two Division Bench decisions of this Court, Sri.Mohamed Rafiq, learned Senior Government Pleader, seeks to re-agitate the cause of the State insofar as limitation for assessments under the Central Sales Tax Act , 1956 and the Central Sales Tax (Kerala) Rules, 1957, respectively referred to as ' CST Act ' and 'CST Rules'. The Division Bench decisions in Parisons Foods (P) Ltd. v. State of Kerala [2017 (3) KLT 1] and CTO v. Fijo Joseph [(2019) 64 GSTR 248 (Kerala)] found that though there is no time frame provided for assessments under the CST Act to be completed as per Rule 6(5), there should be read in, a period of limitation depending upon the nature of the statute, rights and liabilities there under and other relevant factors. Though the assessees sought the limitation period to be limited to four years as has been prescribed under sub-rules (7) and (8) of Rule 6 of the CST Rules, the decisions thought it fit to refer to the General Sales Tax laws applicable in the State, thus enlarging the period of limitation from that available in the Rules. The two different Benches of this Court relied upon S.B.Gurbaksh Singh v. Union of India [(1976) 2 SCC 181] and State of Punjab v. Bhattinda District Co - operative Milk Producers' Union Ltd. [(2007) 11 SCC 363] for the principle that even if no limitation is provided, the State has the duty to complete such assessment within a reasonable period. This is challenged relying on a Constitution Bench decision of the Hon'ble Supreme Court and a three-Judge Bench decision clarifying what has been stated in S.B.Gurbaksh Singh.

(2.) Sri.Mohamed Rafiq first relies on a Constitution Bench decision of the Hon'ble Supreme Court Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax [1964 (4) SCR 436]. It is specifically pointed out that the Bench unanimously and categorically held that when the statute provides for a return to be filed and does not provide a limitation insofar as completion of assessment, then "the proceedings would commence after the return was submitted and would continue till a final order of assessment was made in regard to the said return" (sic para 19). S.B.Gurbaksh Singh considered the issue of exercise of suo motu power of revision and in the facts of that case found that there is no undue delay since the suo motu power was exercised within a few months of the passing of the appellate order. A passing remark was made that "any unreasonable delay in exercise may affect its validity" (sic para 15). Another three-Judge Bench in The Indian Aluminium Cables Limited v. The Excise & Taxation Officer [(1977) 1 SCC 120] clarified that S.B.Gurbaksh Singh does not lay down that the suo motu power cannot be exercised after a 'undue long delay'. Hence what is stated in Ghanshyamdas prevails and the two-Judge Bench in Bhattinda District Co- operative could not have held otherwise. The learned Senior Government Pleader would urge that this Court, the two different Benches, fell into an error in having relied upon S.B.Gurbaksh Singh and Bhattinda District Co- operative. We would first look at the law as has been laid down by the Hon'ble Supreme Court in the above referred judgments covering a period of nearly half a century and a decade more.

(3.) Ghanshyamdas decided two Civil Appeals. In the first of these appeals, for the year 1949-50, comprising of the period between October, 1949 to November, 1950 the assessee filed a return only for one quarter and defaulted in the other three. In the other appeal, the assessee did not file a return for any of the quarters comprised in the year 1950-51. In the first case, the notice was issued on 13.08.1954 and in the second, on 15.10.1954. The assessees argued that the proceedings were barred by limitation under Section 11-A of the Central Provinces and Berar Sales Tax Act, 1947. Section 11-A spoke of escaped assessment, which could be proceeded with by the Commissioner at any time within three calender years from the expiry of the period in which the escapement was occasioned. We pause here to notice that insofar as one appeal, the notice was issued in the fourth year and in the other within three years. The Department argued that since both the appellants were registered dealers with Certificates of Registration clearly indicating the dates on which the returns are to be filed, the statutory obligation deems the proceedings to be pending from the date on which such returns were to be filed and hence there was no scope for invoking the provisions of Section 11-A , which is to be invoked for covering escaped assessment.