SALES-TAX OFFICER, CIRCLE-I, JABALPUR v. HANUMAN PRASAD

The High Court has accepted the plea put forward .on behalf of the respondent. The facts given by us above clearly show that the original assessment of the respondent was in respect of a period when the new Act had not come into force. The respondent had filed the the notice in that connection was issued by the return, and even Sales-tax Officer prior to the enforcement of the new Act. The actual order of assessment was made on 23rd May, 1959, shortly after the new Act had come into force. The mere enforcement of that Act by the time the order of assessment was passed by the Sales-tax Officer cannot lead to the conclusion that the assessment of the respondent was made under the new Act and not under the repealed Act. It was under s. 52 of the new Act that the repealed 834 SUPl.IMI OOUl.T UPOl.TS [l 967] I S.C.R. Act was repealed, and that section itself, under the proviso, laid down that such repeal shall not affect the previous operation of the said Act or .any right, title, obligation or liability already acquired, accrued or incurred thereunder. There was also the further addi tion that subject thereto, anything done or any· action taken (in cluding any appointment, notification, notice, order, rule, form, regulation, certificate or licence) in the exercise of any power con ferred by or under the said Ac\ shall, in so far as it is not inconsis tent with the provisions of this Act, be deemed to have been done or taken in exercise of the powers conferred by or under this Act, as if this Act were in force on the date on which such thing was done In view· of this proviso it has to be held that or action was taken. when this new Act came into force on !st April, 1959, all rights, title, obligation or liability already acquired, accrued or incurred under the repealed Act by the respondent remained unaffected and intact. The rights and liabilities, which had been acquired or incurred under the repealed Act, included the right or liability to be assessed in accordance with the provisions of the repealed Act in respect of turnover of sales effected during the time when that Act was in force. The repealed Act laid down that turnover was taxable, how it was to be computed, and at what rate the tax was to be charged. These provisions clearly created rights as well as liabilities of dealers. Those rights and liabilities were thus preserved by s. 52 of the new Act. The assessment which was completed in the case of the respondent on 23rd May, 1959, was, therefore, an assessment in accordance with the rights and liabilitiC5 of the respondent under the repealed Act ; and this being so, it has to be held that the proviso to s. 19(1) of the new Act was aj>' plicable to the case of the respondent. As a result of this proviso, the period of re-assessment on the ground of under-assessment, escapement or wrong deduction in the case of the respondent had to be as provided in s. 11-A(I) of the repealed Act, so that the period was three years and not five years as laid down by s. 19(1) of the new Act. The notice dated 23rd October, 1962, was clearly issued beyond the period of limitation prescribed bys. 11-A(I) of the repealed Act, and the proceedings in pursuance of it were time barred. In the alternative, this question may be examined in another aspect. Section 11-A(I) of the repealed Act itself created a .right in favour of the respondent not to be assessed in respect of turnover that was under-assessed or had escaped assessment after the expiry of the period prescribed in that sub-section. The proviso to s. 52 of the new Act preserved this right of the respondent, and on thi.5 ground also, the Sales-tax Officer was not competent to issue the notice for re-assessment after that period of limitation had expired. (n this connection, learned counsel for the Sales-tax Officer drew our attention to two subsequent pieces of legislation that A B c D E F G H s. T. OFFICER v. HANUMAN PRASAD (Bfiargava, !.) 835· A B c D E F G H amended the new Act. The first one of these is the Madhya Pradesh General Sales Tax (Second Amendment) Act, 1963 (Act 23 of 1963) (hereinafter referred to as "the Amending Act"). By section 3 of this Amending Act, section 19(1) of the new Act was amended, so as to introduce some words in the principal clause of s. 19(1). The words introduced were : "or any Act repealed by section 52", and they were to be inserted at both the places where the words "this Act" occurred in the principal clause. It was urged that, as a result of this amendment, this principal clause became appli cable even to cases in which assessment had been made under the repealed Act, and, taking into account the effect of this subsequent amendment, we should hold that the Sales-tax Officer was not incompetent to make the assessment when he purported to issue the notice on 23rd October, 1%2, as the notice was issued within the period of five years laid down in the principal clause of s. 19(1) of the new Act. It is, however, significant that, though the prin cipal clause of s. 19(1) was amended, the proviso to it was not deleted by the Amending Act. The proviso, therefore, continued to remain in force. It is well-recognised that a proviso is added to a principal clause primarily with the object of taking out of the scope of that principal clause what is included in it. and what the legislature desires should be excluded. Consequently, even if it be held that the effect of the Amending Act was that, under the principal clause of s. 19(1), the re-assessment of the under-assessed or escaped turnover in the case of the respondent ·could be taken up within a period of five calendar years, that provision became ineffective because of the continued existence of the proviso. The Amending Act had not come into force when the High Court de cided the petition, and consequently, the High Court had no oc casion to consider its effect. indicated above, the order made by the High Court remains unaffected even the limita after this amendment, and the decision given that tion applicable to the case of the respondent is that laid down by s. 11-A(l) of the repealed Act is correct. It is true that the amend is s. 19(1) of the new Act made by the Amending Act was given retrospective effect under s. 5 of the Amending Act, but that also is immaterial, because, even after the ·amendment, the pro vision contained in the proviso had to prevail over the principal clause of s. 19(1). However, as we have The second piece of legislation brought to our notice was the· Madhya Pradesh. General Sales Tax (Second Amendment) Act, 1964 (Act 20 of 1964) by which also s. 19(1) of the new Act was slightly amended. That amendment, however, has no bearing on the point which we are called upon to decide in this appeal, and consequently, needs no consideration. The appeal fails and is dismissed with costs. Y. P. Appeal dismissed.