In a series of articles
on the analsyis of Punjab Value added Tax (Second Amendment) Act, 2013 this is
a third article in which the major amendments under Punjab VAT Act, 2005 are
discussed herebelow:
Amendment in section
29-Assessment provisions:
Extension of time limit
for the assessment: Section 29(4) of
Punjab VAT Act, 2005 has been amended so as to provide for that an assessment
u/s 29(2) or 29(3) may be made within a period of 6 years after the date when
annual statement was filed or due to be filed whichever is later.
Thus time limit for the
assessment has been increased from 3 years to 6 years. Earlier the time limit
for the assessment was 3 years from the due or actual date of filing the annual
statement and beyond 3 years the assessment could be framed only after the
extension of time period for assessment is made by the Commissioner.
But now the default time
limit for assessment has been made 6 years itself, that means assessment can be
framed without any order for extension of Commissioner.
The proviso to section
29(4) providing for the extension of time limit of the assessment period has
also been deleted.
In the proviso
added to section 29(4) the time limit for framing the assessment of the cases
of year 2006-07 in which annual statement has already been filed, has been
extended till 20th November 2014
Explanation to section
29(4) also clarifies that the limitation period of six years for an assessment
under sub-section 2 or sub-section 3, shall also apply to those cases in which
the aforesaid period of six years has not yet expired
Thus in nut shell it
means that the assessment from year 2006-07 onwards can be framed without any
extension order from the Commissioner.
Explanation 2 and section
29(10-A) undermines the judgement of P&H High Court?: Explanation 2 added to section 29(4) very interstingly makes
it clear that prior to the commencement of the Punjab Value Added Tax (Second
Amendment) Act, 2013, the Commissioner was not required to issue any notice to
the concerned person before extending the limitation period of assessment.
In newly added
sub-section 29(10-A) under a non-abstante clause it has also been stated that
irrespective of any judgement, decree or order of any court, Tribunal or other
authority, an order passed by the Commissioner under sub-section (4) prior to
the commencement of the Punjab VAT(Second Amendment) Act, 2013, shall not be
invalid on the ground of prior service of notice or communication of such order
to the concerned person.
It is worth noting that
on the basis of judgement of Punjab & Haryana High Court in A B Sugar
Mills Ltd vs State of Punjab Punjab & Haryana High Court?
The purpose of such
retroactive amendment is just to nulify the law already settled by the
Judiciary. Judicial priinciples require that where the legislation is
introduced to overcome a judicial decision, the power cannot be used to subvert
the decision without removing the statutory basis of the decision.
"A competent
legislature can always validate a law which has been declared by courts to be
invalid, provided the infirmities and vitiating factors noticed in the
declaratory judgment are removed or cured. Such a validating law can also be
made retrospective. If, in the light of such validating and curative exercise
made by the legislature granting legislative competence the earlier judgment
becomes irrelevant and unenforceable, that cannot be called an impermissible
legislative overruling of the judicial decision. All that the legislature does
is to usher in a valid law with retrospective effect in the light of which the
earlier judgment becomes irrelevant." Ujagar Prints v. Union of India
Insertion of section
46-A-Power to pourchase under-priced goods: A new section 46-A has
also been introduced which gives power to designated officer to purchase the
under-priced notified goods. This section seem to have been introduced for
curbing the tax evasion due to under pricing of the goods sold.
This newly added section
gives power to the designated officer with the prior approval of the
Commissioner or any other officer as the Commissioner may in writing authorise
for this purpose, if he has reason to believe that any goods notified by the
State Government whether in stock or in transit are underpriced as shown in the
document or books of account, may make an offer to purchase such goods at the
price shown in the document or books of account, increased by 10 percent plus
freight and other expenses.
If the owner accepts such
offer the goods will be delivered by him on such date, time and place as
directed by the officer, however if rejects such offer or fails to deliver such
goods, then it shall be construed as conclusive proofe that the owner has
underpriced the goods and the price of goods determined by the Designated
officer to the best of his judgment shall be considered as the actual price of
the goods.
This section is a step in
the direction of curbing the tax evasion in case of under-priced goods. However
in my view presumption as to the conclusive proof that goods are under-priced
must be a rebuttable presumption, because there may be other reason for
rejecting the offer of the officer for example a person may be having a binding
contract to deliever the goods with the purchaser, in such case rejecting the
offer may be the only option left with the owner.
However it should be
noted that section 46-A is applicable only on the goods notified by the State
Government for this purpose, unless such goods are notified, section 46-A will
not be operational.
to be continued...
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