STATE OF PUNJAB & ORS. versus M/S. SHREYANS INDUS LTD. ETC.

Citation: [2016] 1 S.C.R. 896 · Decided: 04-03-2016 · Supreme Court of India · Bench: T.S. THAKUR · Disposal: Dismissed

Judgment (excerpt)

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[2016] I S.C.R. 896 
STATE OF PUNJAB & ORS. 
v. 
M/S. SHREYANS INDUS LTD. ETC. 
(Civil Appeal Nos. 2506-25 I I of2016) 
MARCH 04, 20 I 6 
[T.S. THAKUR, CJI., A.K. SIKRI AND R. BANUMATHI, JJ.) 
Punjab General Sales Tax Act, 19./8: ss. 11 (3), 11 (8) - Power 
of Commissioner to extend time limit for passing order of assessment 
after the expiry of /imitation period - Held: When the period of 
limitation prescribed in the Act for passing the assessment order 
expires, the Commissioner is debarred from exercising his powers 
u/sub-section (1 OJ of s.11. 
Dismissing the appeals, the Court 
HELD: 1. A mere reading of Section 11 would reflect that 
wherever return is filed by the assessee, assessment is to be 
made within a period of three years from the last date prescribed 
for furnishing the return in respect of such period. Though 
provisions of the Punjab Act are couched in different language 
from Karnataka Act or Gujarat Act, the essence of these 
provisions is same. Insofar as scheme of Punjab Act is concerned, 
the assessment order is to be normally passed within a period of 
three years. 
At the same time, power is given to the 
Commissioner under Section 11(10) of the Act to extend the said 
period of three years. Once such an extension is given, the order 
is passed even beyond the period of three years. Significantly, 
no upper limit is fixed while giving such extension which means 
that the power can be exercised for extending the period for any 
length of time, subject however to the condition that the 
Commissioner is bound to record the reasons justifying such an 
extension. Obviously, when the Commissioner passes such an 
G order and give reasons, not only he would have to justify his action 
of extending time but also the period by which the time is 
extended. In the Karnataka Legislation, the power is of 
'deferment'. In that Legislation as well, the Assessment Order 
is to be passed within three years as sub-section (5) of Section 
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896 
STATE OF PUNJAB & ORS. v. M/S. SHREYANS INDUS 
LTD. ETC. 
12 of Karnataka Sales Tax Act stipulates that no assessment shall 
be made after a period of three years from the date on which the 
return under sub-section (1) of that order is submitted by a dealer 
subject to two provisos mentioned therein. Sub-section (6) of 
Section 12 mentions as to how the period of limitation is to be 
computed. Clause (b) of sub-section (6) indicates that Joint 
Commissioner, in appropriate cases, may pass an order for 
deferment of Assessment Order to be passed by the Assessing 
Authority and once such an order is passed, that period has not 
to be counted while computing the period of limitation. 
Significantly, this provision also mandates the Joint Commissioner 
to record reasons for deferring the orders of assessment. In 
essence, therefore, the purport and objective behind the 
provisions in Punjab Act as well as in Karnataka Act remains. the 
same. By making any order of deferment under sub-section (6) 
of Section 12 of Karnataka Sales Tax Act, the Joint Commissioner 
is, in fact, achieving the same purpose of granting more time to 
the Assessing Officer to pass the Assessment Order. Same is 
the purpose behind sub-section (11) of Section 10 of the Punjab 
Act. In view thereof, it may not be appropriate to go into the 
nuanced distinction between "deferment" and "extension" as 
per the definitions contained Black's Law Dictionary in the given 
situation, which is dealt with in the instant appeals. In the context 
of the Punjab Act, it can be said that extension of time for 
assessment has the effect of enlarging the period of limitation 
and, therefore, once the period of limitation expires, the immunity 
against being subject to assessment sets in and the right to make 
assessment gets extinguished. Therefore, there would be no 
question of extending the time for assessment when the 
assessment has already become time barred. A valuable right 
has also accrued in favour of the assessee when the period of 
limitation expires. [Paras 9, 20, 21, 24](903-C; 909-D-G; 
910-B-E; _911-C-D] 
Bharat Heavy Electricals Ltd. v. Assistant Commissioner 
of Commercial Taxes (INT-1),;South Zone, Bangalore 
and Ors. (2006) 143 STC 10; ]aver Jivan Mehta v. 
Assistant Commissioner of Sales Tax (Appeal) (1998) 
111 STC 199; D. V. Paul v. Manisha Lalwani (2010) 8 
SCC 546; Commissioner of Income Tax, Jullundur v. 
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SUPREME COURT REPORTS 
[2016] I S

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