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

                        (2015] 9 S.C ..R. 1036


A                  COMMERCIAL MOTORS LTD.
                                  v.
      COMMISSIONER OF TRADE TAX U.P., LUCKNOW &
                      OTHERS
B               (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
     is to be accepted, then the effect of·2001 amendment
 0
     would empower and authorise reopening of cases
     without reference to the financial year, provided the
     assessment order was made on or before 31.3.2002.
     Such an interpretation would be contrary to the
 E legislative intendment for the reason, the same
     amendment has reduced the limitation period from eight
     years to six years. The logical corollary is that the
   . legislative intent was not to do away and erase the
     limitation period, but the date "March 31, 2002" was
 F incorporated only to protect the cases which could be
     earlier governed by a limitation period of eight years.
     Thus, 2001 amendment is not fully retrospective, but it
     is partly retrospective. It reduces the limitation period
     from eight years to six years and simultaneously protects
 G and safeguards the interest of the revenue in respect of
     cases within eight years and six years provided the
   . reassessments·are completed by 31"1 March, 2002. [Para
     19] [1057-D-H; 1058-A-F]
          CTO v. Biswanath Jhunjhunwalla 1996 (5) Suppl.
 H
          SCR 286: (1996) 5 SCC 626; Ahmedabad
 COMMERCIAL MOTORS LTD. v. COMMISSIONER OF                    1039
         TRADE TAX U.P., LUCKNOW

    Manufactur'ing & Calico Printing Co. Ltd. v. S. G.        A
    Mehta, /TO AIR 1963 SC 1436: 1963 Suppl.
    SCR 92; National Agricultural Coop. Marketing
    Federation of India Ltd. v. Union of India 2003 (3)
    SCR 1: (2003) 5 SCC 23; Thirumalai Chemicals
    Ltd. v. Union of India 2011 (4) SCR 838: (2011)           B
    6 sec 739 - relied on.
    Addi. Commissioner (Legal) and Anr. v. Jyoti
    Traders and Anr. 1998 (3) Suppl. SCR 67: (1999)
    2 sec 77 - distinguished.
                                                              c
    Addi. Commissioner (Legal) and Anr. v. Jyoti
    Traders and Anr. 1998 (3) Suppl. SCR 67: (1999)
    2 SCC 77; Binani Industries Ltd. v. Assistant
    Commissioner of Commercial Taxes JT 2007 (5)
    SC 311; Ahmedabad Manufacturing & Calico                  D
    Printing Co. Ltd. v. S. G. Mehta, /TO AIR 1963 SC
    1436: 1963 Suppl. SCR 92; State of U.P. v. Anil
    Kumar Ramesh Chandra Glass Works (2005) 11
    SCC 451; State of Orissa v. Sangram Keshari
    Misra (2010) 13 SCC 311; Ministry of Defence v.            E
    Prabhash Chandra Mirdha 2012 (6) SCR182 :
    (2012) 11 sec 565 - referred to.
                   Case Law Reference
1998 (3) Suppl. SCR 67        distinguished. Paras 6, 16       F
JT 2007 (5) SC 311            referred to.      Para 6
1963 Suppl. SCR 92            relied on.        Paras 6, 16
(2005) 11 sec 451             referred to.      Para 11
(2010) 13 sec 311             referred to.     Para 11        G
2012 (6) SCR 182              referred to.     Para 11
1996 (5) Suppl. SCR 286       relied on.       Paras 12, 16
2003 (3) SCR 1                relied on.       Para 17
2011 (4) SCR 838              relied on.       Para 18        H
1040         SUPREME COURT REPORTS                  [2015) 9 S.C.R.


 A          CIVIL APPELLATE JURISDICTION : Civil Appeal No.
       622-623 of 2015

            From the Judgment and Order dated 03.03.2014 of the
       High Court of Judicature atAllahabad, Lucknow Bench in WP
 B     No. 1513 of 2002 and 25.04.2014 in RP No. 365 of2014.

           Pawanshree Agrawal and Pradeep Agrawal for the
       Appellant.

           Ravi Prakash Mehrotra and Rajeev Dubey for the
 C     Respondents.

            The Judgment of the Court was delivered by

             DIPAK MISRA, J. 1. The appellant is a registered dealer
 D     under the U.P. Trade Tax Act, 1948 (for brevity, 'the Act') and
       authorised to deal with scooters manufactured by Mis. Bajaj
       Auto Limited, and during the assessment year 1990-91, had
       sold the two wheelers to the government employees through
       U.P. Government Employees Welfare Corporation as well as
 E     canteen of the Stores Department amounting to
       Rs.5,23,93,337.57. During the course of assessment, the
       appellant had submitted certificates which were required to
       be issued for claiming exemption in terms of the exemption
       notification no. 7037 dated 31.1.1985. The assessee had
 F     produced 270 sale certificates and on the basis of the same
       he was granted exemption on the sale of scooters for the
       aforesaid amount by the Assessing Officer vide assessment
       order dated 25.3.1995. As claimed by the revenue, at a later
       stage it discovered.that the total sale amount of the scooters
 G     in question was in fact Rs.4,26,94,276.59 instead of
       Rs.5,23,93,337.57 and hence the assessee was liable to pay
       tax on the sale of scooters to the extent of Rs.97,02,050.65 on
       which it had earlier been granted sales tax waiver in view of
 H     the circular dated 16.4.1994.
  COMMERCIAL MOTORS LTD. v. COMMISSIONER OF                         1041
    TRADE TAX U.P., LUCKNOW [DIPAK MISRA, J.]

      2. Treating the original assessment as defective, a show A
cause notice dated 13.3.2002 was issued to the appellant
fixing the date of 18.3.2002 requiring the assessee to show
cause to offer explanation why a proceeding under Section
21 (2) of the Act should not be initiated against it and the tax
component should not be realised.                                B

      3. The assessee filed its reply on 18.3.2002 taking two
grounds, namely, (i) that the proceedings under Section 21 (2)
of the Act could not be initiated against it as the same was
barred by limitation being initiated after lapse of six years from C
the date of end of assessment year i.e. 31.3.1997 in the light
of the proviso to sub-section 2 of Section 21 of the Act and (ii)
the books of accounts were examined during the original
assessment proceeding by the Assessing Officer as is
manifestfrom the assessment order of the year 1990-91 and, D
therefore, the material having already been considered by the
Assessing Officer while making the original assessment, steps
could not be.issued for reopening of the assessment.

      4. The competent authority considering the reply               E
submitted by the appellant required the assesseci to appear
with the documents to clarify the position. At that juncture, the
appellant preferred Writ Petition No. 1513 of 2002 and the
High Court entertained the writ petition, issued notice and as
an interim measure, directed that the assessment proceeding          F
may continue but no final order should be passed.

       5. The contentions raised in the reply were advanced in
the writ petition and they were resisted by the Department by
filing counter affidavit contending, ,inter alia, that the amendment G
incorporated in Section 21 (2) of the Act has retrospective effect
and the steps taken for reopening the assessment was within
time and there was no justification for invocation of the writ
jurisdiction. The High Court, after noting the rival submissions ·
                                                                    H
    1042             SUPREME COURT REPORTS                 [2015] 9 S.C.R.


     A of the parties formulated the following two questions for
       determination:-

                    "1. Whether in the facts and circumstances
                    mentioned above could a complete assessment
     B              under the Act could be reopened after prescribed
                    period when that period has been enlarged by
                    amending the law?

                    2. Whether any case for reopening the assessment
     c              relying upon the Section 21(1) is made out and
                    whether it is a case of change of opinion?"

             6. As far as the first issue is concerned, the High Court
       referred to the decision in Addi. Commissioner (Legal) and
       Anr. v. Jyoti Traders and Anr. 1 in extenso, referred to the
     D
       pronouncement in Binani Industries Ltd. v. Assistant
       Commissioner of Commercial Taxes 2 and the decision
       referred therein i.e. Ahmedabad Manufacturing & Calico
       Printing Co. Ltd. v. S.G Mehta, IT03, and opined thus:-
     E             "Under Sub-section (1) of Section 21 of the Act
                   before its amendment, the assessing authority may,
                   after issuing notice to the dealer and making such
                   inquiry as it may consider necessary, assess or
                   reassess the dealer according to law. Sub-section
     F
                   (2) provided that except as otherwise provided in
                   th is section no order for any assessment year shall
                   be made after the expiry of 2 years from the end of
                   such year or till 31.3.1988 whichever is later.
     G             However, after the amendment, a proviso was added
                   to Sub-section (2) undet which Commissioner of
                   Sales Tax. authorises the assessing authority to
                   make assessment or reassessment after the
               (1999) 2   sec 77
     H     2
               JT 2007 (5) SC 311
           3
               AIR 1963 SC 1436


•
COMMERCIAL MOTORS LTD. v. COMMISSIONER OF                    1043
  TRADE TAX U.P., LUCKNOW [DIPAK MISRA, J.]

   expiration of aforesaid period but.not after 8 years      A
   from the end of such year notwithstanding that such
   assessment or reassessment may involve a change
    of opinion. The proviso came into force w.e.f.
    February 19, 1991. This proviso was further
   amended and "six years from the end of such year          B
   or March 31, 2002 whichever is later" were
    substituted in place of words "eight years from such
   year". In view of llnd proviso the assessment or
    reassessment for the year 1987-88 may be made
   till 31. 3.1993 and as per IVth proviso the               c
   assessment or reassessment.for the year 1989-90
   may be made till 31.3.1995. We do not think that
 . sub-section (2) and the proviso added to it leave
   anyone in doubt that as on the date when the
                                                             D
   amended proviso came into force, the
   Commissioner of Sales Tax could authorise making
   of assessment or reassessment after the expiration
   of six years from such year, i.e. upto 31.3.1999 or
   March 31, 2002 whichever is later. It is immaterial       E
   if a period for assessment or reassessment under
   sub-section (2) of Section 21 before the addition of
   the said proviso had expired. Read as it is, these
   provisions would mean that the assessment for the
   year 1987-88 could be reopened up to March 31,            F
   1993. Authorisation by the Commissiorier of Sales
   Tax and completion of assessment or reassessment
   under sub-section (1.) of Section 21 have to be
   completed within 6 years of the particular
   assessment year or till 31.3.2002 whichever is latter.    G
   Notice to the assessee follows the authorisation· by
   the Commissioner of Sales Tax. It is not disputed
   that a fiscal statute can have retrospective operation.
   If we accept the interpretation given by the
   respondents, the proviso added to Sub-section (2)         H
1044        SUPREME COURT REPORTS                   [2015] 9 S.C.R.


 A         of Section 21 of the Act providing limitation up to
           31.3.2002 becomes redundant. Proviso now
           added to Sub-section (2) of Section 21 of the Act
           does not put any embargo on the Commissioner of
           Sales Tax not to reopen the assessment if period,
 B         as prescribed earlier, had expired before the
           proviso came into operation.

          7. After so stating the High Court proceeded to understand
   the intention of the legislature in enacting the provision and in
 C that context noted that the date of commencement of the
   proviso to Section 21 (2) ~f the Act does not control its
   retrospective operation; that after the amendment after
   substitution of the proviso to Section 21 (2) of the Act, it is six
   years of the particular assessment year or till 31.3.2002
 D whichever is later; and that bare reading of the proviso makes
   it clear that the notice issued by the department to the assessee
   was within time. The Division Bench declared another Division
   Bench decision rendered in Mis. Prag Ice and Oil Mills and
       others v. Additional Commissioner of Trade Tax and Anr. 4
 E     as per incuriam on the ground that it had not taken note of
       amended provision and the decision of this Court in Jyoti
       Traders (supra).

         8. After answering the issue of limitation, the High Court
 F proceeded to deal with the other question and in that context
   came to hold that initial opinion while passing the original
   assessment order was to grant exemption on sale of scooters
   had not been changed while issuing the notice but the revenue
   had found that exemption had been wrongly allowed to the
 G extent of Rs. 97,02,050.65 which ought to have been taxed
   and accordingly did not find any substance on the second
   ground. Being of this view, the High Court dismissed the writ
   petition. Hence, the present appeal by special leave.
 H • VSIT 2008 892
 COMMERCIAL MOTORS LTD. v. COMMISSIONER OF                      1045
   TRADE TAX U.P., LUCKNOW [DIPAK MISRA, J.]

     9. We have heard Mr: Pawanshree Agrawal, learned           A
counsel for the appellant and Mr. Ravi Prakash Mehrotra,
learned counsel for the respondents

     10. To appreciate the controversy it is appropriate to
reproduce Section 21 (2), as amended, in entirety.              B

    Section 21 -Assessment of tax on the turnover
    not assessed during the year

    (2) Except as otherwise provided in this section, no
    order of assessment or re-assessment under any              c
    provision of this Act for any assessment year shall
    be made after the expiration of two years from _the
    end of such year or March 31, 1998, whichever is
    later:
                                                                D
    Provided that if the Commissioner, on his own or
    on the basis of reasons recorded by the assessing
    authority, is satisfied that it is just and expedient so
    to do, authorises the Assessing Authority in that
    behalf, such assessment or re-assessment may be             E
    made after the expiration of the period aforesaid,
    but not after the expiration of (six years from the end
    of such year or March 31. 2002. whichever is later]
    notwithstanding that such assessment or re-
                                                                F
    assessment may involve a change of opinion:

    Provided further that the assessment or re-
    assessment for the assessment year 1987-88 may
    be made by March 31, 1993:
                                                                G
    Provided also that if the eligibility certificate granted
    underSedion 4-A has been amended or cancelled
    by the Commissioner under subsection (3) of
    Section 4-A, the order of assessment or re-
    assessment may be made within one year from the             H
1046          SUPREME COURT REPORTS                       [2015] 9 S.C.R.


 A           date of receipt by the assessing authority of the
             copy of the order amending or cancelling the
             aforesaid certificate or by March 31, 1995,
             whichever is later:

 B           Provided also that the assessment or re-
             assessment for the assessment year 1989-90 may
             be made by March 31, 1995.

                                                [underlining is ours]
 c             11 . Regard being had to the anatomy of the aforesaid
        amended provision, the singular question that arises for
        consideration is whether the show cause notice issued under
        Section 21(2) of the Act seeking to reassess the assessee in
        respect of the assessment year 1990-91 of which the
 0
        assessment was completed on 25.3.95 is valid and acceptable
        in law. The stand of the assessee-appellant is that the
        reopening of assessment under could only be till 31.3.1997,
        that is, a period of six years from the end of assessment year
 E      1991 and hence, the notice having been issued on 13.3.2002
        is wholly unsustainable in law. The stand of the revenue is that
        as per the language employed under Section 21 (2),
       ·assessment or reassessment could be done either within six
        years from the end of the assessment year in question or till
 F      31.3.2002 whichever is later, therefore, the notice is valid and
        within the prescribed period of limitation. The learned counsel
        for the appellant would submit that by virtue of the amendment,
        the assessment or reassessment cannot be made after expiry
        of six years and it would not mean that the assessment can be
 G      made by March 31, 2002 irrespective of the assessment year,
        for that would be·contrary to the requisite intent of the legislature.
        Learned counsel for the revenue, per contra, would contend
        that the limitation has been extended up to period of six years
        from the assessment year 1991 or 31.3.2002 whichever is
 H      later, and hence, the pronouncemeni in Jyoti Traders (supra)
  COMMERCIAL MOTORS LTD. v. COMMISSIONER OF                  1047
    TRADE TAX U.P., LUCKNOW [DIPAK MISRA, J.]

would squarely apply inasmuch as the notice for reassessment A
has been sent within the stipulated period i.e. 31.3.2002 as
certain errors have been discovered in the original assessment
which was found to be defective. That apart, a contention has
been put forth that a notice to show cause has rightly not been
interfered with by the High Court in exercise of the writ B
jurisdiction in view of the judgments rendered in State ofU.P.
v. Anil Kumar Ramesh Chandra Glass Works 5 , State of
Orissa v. Sangram Keshari Misra 6 , and Ministry of
Defence v. Prabhash Chandra Mirdha7 •
                                                              c
     12. First, we shall refer to the decision in Jyoti
Laboratories (supra). In the said case, the assessment in
respect of the assessment year 1985-86 under the Act was
completed on 27 .11.1989 and in respect of Jyoti Traders, the
assessment for the said year was completed on 28.2.1990. D
The period for assessment or reassessment which was four
years under Section 21 of the Act for the assessment year
1985-86 expired on 31.3.1990 in respect of the assessee-
Jyoti Traders. The court took note of the factthatthe amending
Act had received assent of the Governor of the Uttar Pradesh E
on 19.8.199.1 and different dates were prescribed for coming
into force of various provisions of the amending Act. Section
21 of the Act that underwent an amendment and the court was
concerned with the relevant provision which came into force F
w.e.f. 19.2.1991. On the basis of the amendment, the Sales
Tax Officer, after taking sanction from the Commissioner of
Sales Tax, issued notices to the assessee for reassessment.
The orders granting sanction and the issuance of notices for
reassessment were challenged before the High Court and the G
writ court quashed the same. This court took note of the proviso
to sub-section 2 of Section 21 as inserted by the amending
Act 1981 which came into force w.e.f. 19.2.1991. The High
 5, (2005) 11 sec 451
.s (2010) 13 sec 311                                          H
7 (2012) 11 sec 565
1048         SUPREME COURT REPORTS                 [2015] 9 S.C.R.


 A  Court had expressed the view that when the period for
    assessment or reassessment for the year 1985-86 under
    Section 21 of the Act before insertion of the proviso to sub-
    section 2 thereof had expired on 31.3.1990, the amendment
    had no effect. The stand of the revenue before this court was
  B that the interpretation placed on sub~section 2 of Section 21
    by the High Court, if accepted, would make the provision
    prospective in nature which will make the proviso redundant.
    It was also contended that proviso in fact operated after expiry
. C of the four years period prescribed under the sub-section and
    the notice had to follow after the order was obtained from the
    Commissioner and not prior to that. Reliance was placed on
    the authority in CTO v. Biswanath Jhunjhunwa//a8.             ·

   13. The decision in Biswanath Jhunjhunwalla (supra) dealt
 D with Bengal Finance (Sales Tax) (Third Amendment) Act, 1974
   which substituted Section 26(1) of the principal Act which
   empowered the State Government to make rules with
   prospective or retrospective effect for carrying out the purposes
   of the Act. In exercise of the said power, Rule 80(5) of the
 E Bengal Sales Tax Rules, 1941 was amended. The amended
   Rule provided that the Commissioner or any other authority to
   whom power has been delegated shall not, of his own motion,
   revise any assessment made or order passed under the Act
 F or the rule thereunder if the assessment had been made or
   the order had been passed more than six years previously.
   The show cause notices being issued, the High Court was
   moved for quashment of the same and it ruled that by the
   amendment of the rule, assessment which had been completed
 G could be revisedwithin six years of the date of such completion,
   but when the right to revise the assessment under the
   unamended provision of the rule stood barred on the date of
   the amendment, such assessment could not be reopened or
   revised. It was also opined by the High Court that the amended
 H     s (1996) s sec 626
  COMMERCIAL MOTORS LTD. v. COMMISSIONER OF                      1049
    TRADE TAX U.P., LUCKNOW [DIPAK MISRA, J.]

notification neither expressly nor by necessary implication A
confer any power of revision of assessment which stood barred
on the date on which it was issued. This Court after referring
to the decisions in /TO v. S.K. Habibul/ah9 , S.S. Gadgil, /TO
v. Lal and Co. 10 and /TO v. lnduprasad Devshanker Bhatt1 1,
opined thus:-                                                  B

        "12. What, therefore, we have to seek is the clear
       meaning of the said Notification. If there be no doubt
     . about meaning, the amendment brought about by
       the said Notification must be given full effect. If the   c
       language expressly so states or clearly implies,
       retrospectivity must be given with effect from 1-11-
       1971, so as to encompass all assessments made
       within the period of six years theretofore, whether
       they have become final by reason of the expiry of         D
       the period of four years or not. .

      13. By reason of the said Notification, with effect
      from 1-11-1971, Rule 80(5)(it) has to be read as
      barring the Commissioner (or other authority to            E
      whom power in this behalf has been delegated by
      the Commissioner) from revising of his own motion
      any assessment made or order passed under the
      Act or the rules ifthe assessment has been made
      or the order has been passed more than six years           F
      previous to 1-11-1971. Put conversely, with effect
      from 1-11-1971, Rule 80(5)(ii) permits the
      Commissioner (or other authority) to revise of his
      own motion any assessment made or order passed
      under the Act or the rules provided the assessment         G
      has not been made or the order passed more than
      six years previously. This being the plain meaning,
9 (1962)441TR809=AIR1962SC91S
10 (1964) 53 ITR 231"AIR1965 SC 171
                                                                 H
11 (1969) 72 ITR 595 =AIR 1969 SC 778
1050      SUPREME COURT REPORTS                     [2015) 9 S.C.R.


 A        the said Notification must be given full effect Full
          effect can be given only if the said Notification is
          read as being applicable not only t-0 assessments
          which were incomplete but also to assessments
          which had reached finality by reason of the earlier
 B        prescribed period of four years having elapsed.
          Where language as unambiguous as this is
          employed, it must be assumed that the legislature
          intended the amended provision to apply even to
          assessments that had so become final; if the
 c        intention was otherwise, the legislature would have
          so stated."

         14. Thereafter this Court referred to number of other
   decisions and eventually interpreting the amendment in Section
 D 21 opined that:-

        · "The two decisions in the cases of Ahmedabad
          Manufacturing & Calico Printing Co. ~td and
          Biswanath Jhunjhunwalla are more closer to the
 E        issue involved in the present case before us. They
          laid down that it is the language of the provision
          that matters and when the meaning is clear, it has
          to be given full effect. In both these cases, this Court
          held that the proviso which amended the existing
 F        provision gave it retrospectivity. When the provision
          of law is explicit, it has to operate fully and there
          could not be any limits to its operation. This Court
          in Biswanath Jhunjhunwa/la case said that if the
          language expressly so states or clearly implies,
 G        retrospectivity must be given to the provision. Under
          Section 34 of the Income Tax Act, 1922, it is the
          service of the notice which is the sine qua non, an.
          indispensable requisite, for the initiation of
          assessment or reassessment proceedings where
 H
COMMERCIALMOTORSLTD. v. COMMISSIONER OF                   1051
  TRADE TAX U.P., LUCKNOW [DIPAK MISRA,J.]

  income had escaped assessment. That is not so           A
  in the present case. Under sub-section (1) of
  Section 21 of the Act before its amendment, the
  assessing authority may, after issuing notice to the
  dealer and making such inquiry as it may consider
  necessary, assess or reassess the dealer                 B
  according to law. Sub-section (2) provided that
  except as otherwise provided in this section, no
  order for any assessment year shall be made after
  the expiry of 4 years from the end of such year.
  However, after the amendment, a proviso was             c
  added to sub-section (2) under which the
  Commissioner of Sales Tax authorises the
  assessing authority to make assessment or
  reassessment before the expiration of 8 years from
                                                          D
  the end of such year notwithstanding that such
  assessment or reassessment may involve a change
  of opinion. The proviso came into force w.e. f. 19-2-
  1991. We do not think that sub-section (2) and the
  proviso added to it leave anyone in doubt that as        E
  on the date when the proviso came into force, the
  Commissioner of Sales Tax could authorise making
  of assessment or reassessment before the
  expiration of 8 years from the end of that particular
  assessment year. It is immaterial if a period for        F
  assessment or reassessment under sub-section (2)
  of Section 21 before the addition of the said proviso
  had expired: Here, it is the completion of
  assessment or reassessment under Section 21
  which is to be done before the expiration of 8 years    G
  of that particular assessment year. Read as it is,
  these provisions would mean that the assessment
  for the year 1985-86 could be reopened up to 31-
  3-1994. Authorisation by the Commissioner of
  Sales Tax and completion of assessment or               H
1052      SUPREME COURT REPORTS                          [2015) 9 S.C.R.


·A        reassessment under sub-section (1) of Section 21
          have to be completed within 8 years of the particular
          assessment year."

          And again:-
 B
          " If we accept the interpretation given by the
          respondents, the proviso added to sub-section (2)
          of Section 21 of the Act becomes redundant.
          Commencement of the Act can be different than
 c        the operation of the Act though sometimes, both
          may be the same. The proviso now added to sub-
          section (2) of Section 21 of the Act does not put
          any embargo on the Commissioner of Sales Tax
          not to reopen _the assessment if the period, as
 D        prescribed earlier, had expired before the proviso
          came into operation. One has to see the language
          of the provision. If it is clear, it has to be given its full
          effect. To reassure oneself, one may go into the
          intention of the legislature in enacting such
          provision. The date of commencement of the
          proviso to Section 21 (2) of the Act does not control
          its retrospective operation. Earlier the assessment/
          reassessment could have been completed within
          four years of that particular assessment year and
 F        now by the amendment adqing the proviso to
          Section 21 (2) of the Act it is eight years. The only
          safeguard being that it is after the satisfaction of
          the Commissioner of Sales Tax. The proviso is
          operative from 19-2-1991 and a bare reading of
 G        the proviso shows that the operation of this proviso
          relates and encompasses back to the previous
          eight assessment years."

       15. It is noticeable the interpretation was placed by this
 H Court on the amendment appended to sub-section (2) of
  COMMERCIAL MOTORS LTD. v. COMMISSIONER OF                            1053
    TRADE TAX U.P., LUCKNOW [DIPAK MISRA, J.]

  Section 21 by the amending provision that came into force            A
  w.e.f. 19.2.1991, the Court relied on the authority in Biswanath
  Jhunjhunwal/a (supra), as thought by the Court, was a
. proximate ruling. In the earlier case Rule 80(5) (ii) was
  interpreted to have conferred express power and clearly by
  implication that retrospectivity must be given to the notification   B
  so that it can have full effect. The Court opined that plain
  meaning was to be placed on the amendment, especially on
  the words "the assessment has been made or the order has
  been passed more than six years previously", and full effect
  could only be g\ven if the said notification was read as if          C
  applicable not only to assessments which were incomplete
  but also to assessments which had reached finality by reason
  of the earlier prescribed period of four years having elapsed.
  The Court further opined where language was unambiguo1:1s            D
  as Rule 80(5)(ii), it must be assumed that the legislature
  intended the amended provision to apply even to assessments
 that had become final, for if the intention was otherwise, the
  legislature would have so stated.

       16. In the case at hand the proviso that has been E
amended on 30.4.2001 and the previous provision 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". It is apt to note here F
that the assessment year in question is 1990-91 or year ending
31.3.1991. Original assessment order is dated 25.2. ~ 995 and
the notice for reassessment is dated 13.3.2002. For the
purpose of limitation under Section 21 ( 1) and the first proviso,
the period of limitation is to be counted from the end of the G
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. 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. In the backdrop of the H
1054         SUPREME COURT REPORTS                     (2015) 9 S.C.R.


 A     ratio laid down in Jyoti Traders (supra), there can be no iota
       of doubt that period of six years would have the full effect in
       respect of fresh assessment or reassessment, where notice
       is issued or after the date the proviso came into force. It has
       to be borne in mind that law of limitation when affects
 B     substantial rights of a party, such subsequent amendment
       should not be read as retrospectively unless the amendment
       so stipulates or requires so by necessary implication. It has
       been held in Biswanath Jhunjhunwal/a (supra) when the
       intendment of the legislature is clear and the language is .
 C     unambiguous or it impliedly follows, then full effect should be
       given and the provision be treated as retrospective. In this
       regard, rE;lference to a Constitution Bench decision in
       Ahmedabad Manufacturing & Calico Printing Co. Ltd.
       (supra) would be apt. The majority view, as is discernible, is
 0
       to the following effect:-

            "The legislature may affect substantial rights by
            enacting laws which are expressly retrospective or
            by using language which has that necessary result.
 E          And this language may give an enactment more
            retrospectivity than what the commencement clause
            gives to any of its provisions. When this happens
            the provisions thus made retrospective, expressly
            or by necessary intendment, operate from a date
 F
            earlier than the date of commencement and affect
            rights which, but for such operation, would have
            continued undisturbed."

        17. In this context, a passage from National Agricultural
 G Coop. Marketing Federation of India Ltd. v. Union of
   lndia12 is worth reproducing:-

              "that there is no fixed formula for the expression of
              legislative intent to give retrospectivity to an
 H     12 (2003) s sec 23
  COMMERCIAL MOTORS LTD. v. COMMISSIONER OF                     1055
    TRADE TAX U.P., LUCKNOW [DIPAK MISRA, J.]

      enactment. Every legislation whether prospective          A
      or retrospective has to be subjected to the question
      of legislative competence. The rettospectivity is
      liable to be decided on a few touchstones such as:
      (1) the words used must expressly provide or clearly
      imply retrospective operation; (ii) the retrospectivity   8
      must be reasonable and not excessive or harsh,
      otherwise it runs the risk of being struck down as
      unconstitutional; (iii) where the legislation is
      introduced to overcome a judicial decision, the
      power cannot be used to subvert the decision              c
      without removing the statutory basis of the decision.
      There is no fixed formula for the expression of
      legislative intent to give retrospectivity to an
      enactment. A validating clause coupled with a
                                                                D
      substantive statutory change is only one of the
      methods to leave actions unsustainable under the
      unamended statute, undisturbed. Consequently, the
      absence of a validating clause would not by itself
      affect the retrospective operation of the statutory        E
      provision, if such retrospectivity is otherwise
      apparent."

      18. In Thirumalai Chemicals Ltd. v. Union of lndia 13 ,
it has been held thus:-
                                                                 F
      "Limitation provisions therefore can be procedural
      in the context of one set of facts but substantive in
      the context of different set of facts because rights
      can accrue to both the parties. In such a situation,
      test is to see whether the statute, if applied            G
      retrospectively to a particular type of case, would
      impair existing rights and obligations. An accrued
      right to plead a time bar, which is acquired after
13 (2011i s sec 739
                                                                H
1056       SUPREME COURT REPORTS                   [2015] 9 S.C.R.


 A        the lapse of the statutory period, is nevertheless a
          right, even though it arises under an Act which is
          procedural and a right which is not to be taken away
          pleading retrospective operation unless a contrary
          intention is discernible from the statute. Therefore,
 B        unless the language clearly manifests in express
          terms or by necessary implication, a contrary
          intention a statute divesting vested rights is to be
          construed as prospective."

 c       19. Keeping in view the aforesaid enunciation of law, it is
   to be seen whether the amendment and introduction of the
   words "six years from the end of such year or March 31, 2002
   whichever is later" either expressly or by necessary implication
   can be regarded as retrospective. The cardinal principle which
 D is accepted is that law in force in the assessment year is to be
   applied unless there is an amendment which comes into force
   having retrospective operation. In the instant case, the
   Legislature has brought the amendment by reducing the period
   from eight years to six years. The language employed in the
 E proviso has to be carefully scrutinised and appreciated. In
   Jyoti Traders (supra), the Court was dealing with the
   amendment where the words that were brought in "eight years
   from the end of such year" and the Court interpreted the
 F legislative intent and opined that to give full effect to the
   intention, it has to date back to the previous assessment of
   eight years. In the present amendment, the words thathave
   been substituted are "six years from the end of such year or
   March 31, 2002 whichever is later". We have already stated
 G the period of six years has to be given full effect. There can be
   no trace of doubt in the same. The words "or March 31, 2002
   whichever is later" are of immense significance. It is extremely
   important to understand the intent of the legislature, for
   specifying this date when the limitation period was reduced
 H from eight years to six years. It is the submission of the learned
  COMMERCIAL MOTORS LTD. v. COMMISSIONER OF                           1057
    TRADE TAX U.P., LUCKNOW [DIPAK MISRA, J.]

counsel for the revenue that the amended proviso does not             A
place any embargo on the Commissioner of Sales Tax to
 reopen an assessment even if the limitation has expired before
the proviso came into operation under the pre or post
amendment period of eight or six years and the High Court is
justified in holding that the assessment or reassessment could        B
be done either within six years from the end of the assessment
year in question or till 31.3.2002 whichever is later. On a first
blush, the interpretation placed by the High Court, which has
been assiduously supported by the learned counsel for the
State may look attractive, but on a closer scrutiny, the fallacy in   C
the interpretation becomes clear. As far as six years is
concerned, as stated earlier, there can be no difficulty. The
State legislature has intentionally reduced the period from eight
years to six years. Such reduction of period is definitely
                                                                      0
beneficial for the assessee. It is worth noting the period was
reduced to six years, however, in the language used, the outer
limit has been fixed either six years or March 31, 2002 and,
therefore, the latter part of the proviso also specifying the date
31•1 March, 2002 has to be appositely interpreted. The                E
amendment, as we perceive, 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 was eight years under         f
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 has been specified to complete the assessment         G
or reassessment by 31.3.2002. The making of assessment
is .an extremely material facet. 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 limitation period would             H
1058          SUPREME COURT REPORTS                  [2015] 9 S.C.R.


 A 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 a
   determinative date, a peculiar situation is created. The
 B 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 is to be accepted,
   then the effect ·of 2001 amendment would empower and
   authorise reopening of cases without reference to the financial
 C ye_ar, provided the assessment order was made on or before
   31.3.2002. Such an interpretation would be contrary to the
   legislative intendment for the reason, the same amendment
   has reduced the limitation period from eight years to six years.
   The logical corollary is that the legislative intent was not to do
 0
   away and erase the limitation period, but the date "March 31,
   2002" was incorporated only to protect the cases which could
   be earlier governed by a limitation period of eight years. Thus, ·
   2001 amendment is not fully retrospective, but it is partly
 E retrospective. If reduces the limitation period from eight years
   to six years and simultaneously protects and safeguards the
   interest of the revenue in respect of cases within eight years
   and six years provided the reassessments are completed by
   31•t March, 2002. Hence, we are of the considered opinion
 F that the decision in Jyoti Traders (supra) is distinguishable,
   regard being had to the nature of the amendment that has been
   brought in and consequently, the interpretation placed by the.
   High Court on the amended provision is incorrect.

 G          20. In view of tile foregoing analysis, the appeals are
       allowed and the judgment and order passed by the High Court
       are set aside. Resultantly, the initiation of the re-assessment
       proceeding is set aside being barred by limitation. There shall
       be no order as to costs.
 H     Devika Gujral                                   Appeals allowed.