COMMERCIAL MOTORS LTD. versus COMMISSIONER OF TRADE TAX U.P., LUCKNOW & OTHERS

Citation: [2015] 9 S.C.R. 1036 · Decided: 11-09-2015 · Supreme Court of India · Bench: DIPAK MISRA · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
(2015] 9 S.C .. R. 1036 
COMMERCIAL MOTORS LTD. 
v. 
COMMISSIONER OF TRADE TAX U.P., LUCKNOW & 
OTHERS 
(Civil Appeal Nos. 622-623 of2015) 
SEPTEMBE.R 11, 2015 
[DIPAK MISRA AND PRAFULLA C~ PANT, JJ.] 
C 
U.P. Trade Tax Act, 1948: s.21(2), proviso as amended 
on 30.4.2001 -Assessment year 1990-91. - Whether the 
show cause notice issued u/s.21(2) on 13.3.2002 seeking 
reassessment in respect of assessment year 1990-91 of 
which the assessment was completed on 25. 3. 1995 is valid 
o and acceptable in Jaw- Held: For the purpose of limitation ul 
s.21(1) and the first proviso, the period of limitation is to be 
counted from the end of the relevant _assessment year i.e. 
31.3.1991 - The proviso was amended on 30.4.2001 and 
the previous provision that contained the words "eight years 
E from the end of such year" were substituted by "six years from 
the end of such year or March 31, 2002 whichever is later" -
By virtue of amendment, the assessment or reassessment 
cannot be made after expiry of six years and it would not 
mean that the assessment can be made by 31.3.2002 
F irrespective of assessment year, for that would be contrary to 
the roqµisite intent of the legislature- Therefore, the initiation 
of reassessment was not valid being barred by limitation. 
Tax/Taxation: Applicability of the Jaw- Held: The law in 
G force in the assessment year is to be applied unless there is 
an amendment which comes into force having retrospective 
operation. 
Allowing the appeals, the Court 
H 
HELD: 1. In the case at hand the proviso that has 
1036 
COMMERCIAL MOTORS LTD. v. COMMISSIONER OF 
1037 
TRADE TAX U.P., LUCKNOW 
been amended on ·30.4.2001 and the previous provision A 
that contained the words "eight years from the end of 
such year'' have been substituted by "six years from the 
end of such year or March 31, 2002 whichever is later". 
Original assessment order is dated 25.2.1995 and the 
notice for reassessment is dated 13.3.2002. For the B 
purpose of limitation under Section 21(1) and the first 
proviso, the period of limitation is to be counted from 
the end of the relevant assessment year. i.e. 31.3.1991. 
Thus, the notice dated 13.3.2002 was beyond six years 
or even eight years of the end of assessment year i.e. C 
1990-91. The question is whether the notice is saved by 
the expression "six years from the end of such year or 
March 31, 2002. There can be no iota of doubt that period 
of six years would have the full effect in respect of fresh D 
assessment or reassessment, where notice is issued or 
after the date the proviso came into force. [Para 16] 
(1053-E-H; 1054-A-B] 
2. The law in force in the assessment year is to be 
applied unless there is an amendment which comes into E 
force having retrospective operation. 
The State 
legislature has intentionally reduced the period from 
eight years to six years. However, the outer limit has 
been fixed either six years or March 31, 2002. The F 
amendment is not only beneficial to the assessee but 
also intends to protect the interest of the revenue. Prior 
to this amendment, the period of limitation was eight 
years. There could be cases which were pending by 
virtue of issue of notice as the earlier limitation period G 
was eight years under the pre-amended proviso. The 
intention of the latter part of the proviso. is to save such 
pending assessments and that is why a specific date, 
that is, March 31, 2002 has been incorporated. While 
reducing the period from eight years to six years, time H 
1038 
SUPREME COURT REPORTS 
[2015] 9 S.C.R. 
A has been specified to complete the assessment or 
reassessment by 31.3.2002. Had the said date, that is, 
31.3.2002, is not treated as a saving factor, the pending 
reassessment cases covered by eight years period 
would have come under the sunset and reduced 
B limitation period would have adversely affected the 
interest of the revenue. Therefore, the protective 
provision. If such construction is not placed, it would 
be rather inequitable, in a way incongruous, as on the 
one hand the period of limitation is reduced and by fixing 
C a determinative date, a peculiar situation is created. The 
legislative intent was not to enhance and increase the 
limitation period, regardless and notwithstanding the 
financial or assessment year. If the stand of the revenue 
0 
is to be accepted, then the effect of·2001 amendment 
would empower and authorise reopening of cases 
without reference to the financial year, provided the

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