Section 21 Cannot Resurrect Time‑Barred Assessments under Assam GST Act, Supreme Court Rules
A Bench of Justices J.B. Pardiwala and Sandeep Mehta heard an appeal by a dealer against the Gauhati High Court's judgment on the validity of reassessments under the Assam General Sales Tax Act, 1993. The challenge concerned whether the revenue could invoke Section 21 to make reassessments after earlier assessments for the years 2003-04, 2004-05 and 2005-06 were held to be time‑barred under Section 19.
The Court summarised that Section 21 did not operate to validate reassessments where earlier assessments had already been made and declared invalid for being time‑barred. The Bench held that Section 21 applied only "where no assessment has been made under any of the provisions of the Act within the time limits specified in Section 19." The Court, in its reasoning, observed: The Court also emphasised that, “In construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of law.”
Background
The dispute arose after reassessments dated 31.03.2011 were made in respect of three assessment years. The dealer contended that earlier assessments were time‑barred under Section 19 and that subsequent action could not be sustained. The revenue obtained sanction from the Commissioner and relied upon Section 21, which permits assessments within four years from the expiry of the limitation period if prior sanction from the Commissioner was obtained. The Gauhati High Court examined the record and accepted the revenue's submission that sanction had been granted on 21.03.2011, treated the reassessments as within limitation under Section 21 and directed that earlier ex parte assessments not be acted upon and that a fresh assessment be made after hearing the dealer.
The dealer approached this Court by way of civil appeal. Senior counsel for the appellant argued that Section 21 applied only when no assessment had been made within the time prescribed by Section 19 and could not be used to revive assessments that had already been declared invalid. The State's counsel relied on the Commissioner’s sanction and the four‑year outer period under Section 21. The Supreme Court accepted the appellant’s contention, held that the High Court's interpretation was incorrect, and allowed the appeals. The common judgment and order of the Gauhati High Court was set aside. The Court stated that fiscal statutes must be construed strictly and restored the legal position that Section 21 could not be invoked in the facts of the case. Pending applications, if any, stood disposed of.
Case No.: Civil Appeal No. 4440 of 2014 Case Title: M/s. Shiv Steels v. The State of Assam & Ors. Appearances: For the Petitioner(s): Mr. Manish Goswami, Senior Counsel For the Respondent(s): Mr. Chinmoy Pradip Sharma, Senior Counsel