{"id":180154,"date":"2007-04-04T00:00:00","date_gmt":"2007-04-03T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-binani-industries-ltd-vs-assistant-commissioner-of-on-4-april-2007"},"modified":"2019-02-27T07:16:57","modified_gmt":"2019-02-27T01:46:57","slug":"ms-binani-industries-ltd-vs-assistant-commissioner-of-on-4-april-2007","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-binani-industries-ltd-vs-assistant-commissioner-of-on-4-april-2007","title":{"rendered":"M\/S Binani Industries Ltd., … vs Assistant Commissioner Of … on 4 April, 2007"},"content":{"rendered":"
Supreme Court of India<\/div>\n
M\/S Binani Industries Ltd., … vs Assistant Commissioner Of … on 4 April, 2007<\/div>\n
Author: . A Pasayat<\/div>\n
Bench: Dr. Arijit Pasayat, S.H. Kapadia<\/div>\n
           CASE NO.:\nAppeal (civil)  1784 of 2007\n\nPETITIONER:\nM\/s Binani Industries Ltd., Kerala\n\nRESPONDENT:\nAssistant Commissioner of Commercial Taxes, VI Circle, Bangalore and Ors\n\nDATE OF JUDGMENT: 04\/04\/2007\n\nBENCH:\nDr. ARIJIT PASAYAT & S.H. KAPADIA\n\nJUDGMENT:\n<\/pre>\n
J U D G M E N T
\nCIVIL APPEAL NOS.        1784                 OF 2007
\n(Arising out of SLP (C) Nos. 157-158 of  2006)
\nWITH
\n\t(Civil Appeal Nos. 1785     \/2007 @ SLP ) Nos. 1035-39\/2006
\n\tCivil Appeal Nos.  1786     \/2007@ SLP ) Nos. 1219-38\/2006
\n\tCivil Appeal Nos.  1787     \/2007@ SLP ) Nos. 1462-63\/2006
\n\tCivil Appeal Nos.  1788     \/2007@ SLP ) Nos. 1482-1501\/2006
\n\tCivil Appeal Nos.  1789     \/2007@ SLP ) Nos. 1506-09\/2006
\n\tCivil Appeal Nos.  1790     \/2007@ SLP ) No. 6197\/2006
\n\tCivil Appeal Nos.  1791     \/2007@ SLP ) Nos. 6733\/2006
\n\tCivil Appeal Nos.  1792     \/2007@ SLP ) Nos. 6884\/2006
\n\tCivil Appeal Nos.  1793     \/2007@ SLP ) Nos. 9232\/2006
\n\tCivil Appeal Nos.  1794     \/2007@ SLP ) Nos. 8862\/2006
\n\tCivil Appeal No. 1369 of 2006
\n\tCivil Appeal No. 1370 of 2006<\/p>\n
Dr. ARIJIT PASAYAT, J.\n<\/p>\n
\tLeave granted in special leave petitions.\n<\/p>\n
\tChallenge in these appeals is to the legality of the
\njudgment rendered by a Division Bench of the Karnataka High
\nCourt holding that the Circular dated 23.10.1999 (Circular
\nNo.31\/1999-2000)  is valid and Circular No.5\/1996-97 dated
\n12.4.1996 was inoperative.\n<\/p>\n
\tBackground facts in a nutshell are as follows:\n<\/p>\n
\tAppellants are dealers registered under the Karnataka
\nSales Tax Act, 1957 (in short the ‘Act’). Their business
\nactivities inter-alia include business of leasing machinery,
\nequipment and motor vehicles.\n<\/p>\n
\tSection 5-C of the Act deals with levy of tax on transfer of
\nthe right to use the goods which is treated as a transfer for the
\npurpose of levy of sales tax within the State.
\n\tOriginally the levy was on “taxable turnover”. An
\namendment was brought in 1992 to the said provision
\nsubstituting the expression “total turnover” for “taxable
\nturnover”. The same was questioned by several assessees. A
\nDivision Bench of the High Court by its judgment in Shetty
\nLeasing India Pvt. Ltd. vs. Union of India and Ors. (1996 (100)
\nSTC 533) struck down the provision. On 1.4.1986, Section 5-C
\nwas again amended with retrospective effect restoring the
\noriginal position i.e. substituting the expression “taxable
\nturnover” for “total turnover”. On 12.4.1996, a Circular was
\nissued in terms of Section 3-A of the Act providing that the
\ngoods which have suffered tax under Section 5 of the Act
\ncannot be again taxed in terms of Section 5-C. In other words,
\nwhere the goods have suffered tax on the actual sale cannot
\nattract levy of tax again. The circular,  as noted above, was
\nissued under Section 3-A of the Act read with Rule 6(4) of the
\nKarnataka Sales Tax Rules, 1957 (in short the ‘Rules’).
\nSubsequently, on 23.10.1999 another Circular was issued
\nstating that the earlier Circular did not reflect the actual
\nposition in law and, therefore, there was no bar on the
\ntransaction being taxed in terms of Sections 5 and 5-C.  On
\n1.4.2000 Section 5-C was amended by insertion of a proviso
\nwhich in essence re-iterated the view expressed in the Circular
\ndated 12.4.1996.\n<\/p>\n
\tKeeping in view the directions contained in the Circular
\nof 23.10.1999 re-assessment proceedings were initiated
\nand\/or action in terms of Section 21 for revision was initiated.
\nBoth these actions related to completed assessments.\n<\/p>\n
\tA learned Single Judge while dealing with challenge to
\nCircular dated 23.10.1999 held that the Circular of 12.4.1996
\ndid not  indicate the correct position in law and, therefore,
\nthere was no bar in the Circular dated 23.10.1999 clarifying
\nthe position and indicating the correct position. However, it
\nwas held that the revenue was bound by the incorrect
\nCircular. Therefore, for the assessment years 1996-97 to
\n1999-2000 till the date of the subsequent Circular, no action
\ncould be taken against the assessees. But the position prior to
\nthat i.e. from 1.4.1986 till 31.3.1996 the assessees were not
\nentitled to any relief. This view was taken primarily on the
\nground that even incorrect circular binds the revenue. The
\nDivision Bench held the incorrect circular does not bind the
\nrevenue and that the law declared by this Court has a binding
\neffect.\n<\/p>\n
\tLearned counsel for the appellants submitted that both
\nthe orders of the learned Single Judge and the judgment of the
\nDivision Bench do not take into effect of the proviso which is
\nin essence a legislative declaration of a clarificatory nature.
\nThe proviso in terms recognizes the correctness of the Circular
\ndated 12.4.1996. In any event, there could not have been any
\nre-opening of the assessment because of mere change in
\nopinion of the Commissioner. When two opinions were
\nexpressed in the two circulars it is nothing but a change in the
\nopinion and it is impermissible for the revenue to re-open the
\ncomplete assessment on the basis of the subsequent Circular.\n<\/p>\n
\tThe fact that the proviso was by way of a clarification is
\nclear from the fact that at the first instance only 12 days after
\nSection 5-C was amended, the Circular was issued. In
\nessence, the principle of contemporaneous expression applies
\nto the facts of the case.  The Circular dated 23.10.1999 is in
\nessence review of the earlier Circular which is impermissible in
\nlaw. The Circular itself states that those are “revised
\ninstructions” and, therefore, cannot have any retrospective
\nforce  and in any event cannot permit re-opening of complete
\nassessment either by way of re-assessment proceedings or by
\nexercise of revisional powers.\n<\/p>\n
\tIn response, learned counsel for the revenue submitted
\nthat the true nature of the proviso has been kept in view. The
\nHigh Court’s conclusions are irreversible. There is no question
\nof proviso being clarificatory in nature. According to him, the
\nproviso can be applicable with effect from the date of
\nintroduction because that would determine the taxable event
\nfor the assessment year in question and the subsequent
\nperiod.\n<\/p>\n
\tIt is stated that the Circular was not binding on the
\nassessing authorities and they could take their independent
\nview.\n<\/p>\n
\tAt this juncture, it would be necessary to take note of
\nSections 5-C, 12-A and 21. They read as follows:\n<\/p>\n
“5-C. Levy of tax on the transfer of the right
\nto use any goods: Notwithstanding anything
\ncontained in sub-section (1) or sub-section (3)
\nof Section 5, but subject to sub-sections (5)
\nand (6) of the said Section, every dealer shall
\npay for each year a tax under this Act on his
\n(taxable turnover in respect of the transfer of
\nthe right to use any goods mentioned in
\ncolumn (2) of the Seventh Schedule for any
\npurpose (whether or not for a specified period)
\nat the rates specified in the corresponding
\nentries in column (3) of the said Schedule.\n<\/p>\n
Provided that no tax shall be levied under
\nthis section if the goods in respect of which the
\nright to use is transferred, have been subjected
\nto tax under section 5.\n<\/p>\n
 12-A. Assessment of escaped turnover: -(1)
\nIf the assessing authority has reason to believe
\nthat the whole or any part of the turnover of a
\ndealer in respect of any period has escaped
\nassessment to tax or has been under-assessed
\nor has been assessed at a rate lower than the
\nrate at which it is assessable under this Act or
\nany deductions or exemptions have been
\nwrongly allowed in respect thereof, the
\nassessing authority may, notwithstanding the
\nfact that the whole or part of such escaped
\nturnover was already before the said authority
\nat the time of the original assessment or  re-
\nassessment but subject to the provisions of
\nsub-section (2), at any time within a period of
\neight years from the expiry of the year to which
\nthe tax relates, proceed to assess or re-assess
\nto the best of its judgment the tax payable by
\nthe dealer in respect of such turnover after
\nissuing a notice to the dealer and after making
\nsuch enquiry as it may consider necessary.\n<\/p>\n
(1-A) In making an assessment under sub-
\nsection (1) the assessing authority may, if it is
\nsatisfied that the escape from assessment is
\ndue to wilful non-disclosure of assessable
\nturnover by the dealer, direct the dealer to pay,
\nin addition to the tax assessed under sub
\nsection (1), a penalty not exceeding (an amount
\nequivalent to the tax due) the tax so assessed:\n<\/p>\n
Provided that no penalty under this sub-
\nsection shall be imposed unless the dealer
\naffected has had a reasonable opportunity of
\nshowing cause against such imposition.\n<\/p>\n
(2) In computing the period of limitation for
\nassessment of the escaped turnover under this
\nSection, the time during which an assessment
\nhas been deferred on account of any stay order
\ngranted by any Court or other authority in any
\ncase, or by reason of the fact that an appeal or
\nother proceeding is pending before the
\nAppellate Tribunal or the High Court or the
\nSupreme Court, shall be excluded:\n<\/p>\n
Provided that nothing contained in this
\nSection limiting the time within which any
\naction may be taken or any order, assessment
\nor re-assessment may be made, shall apply to
\nan assessment or re-assessment made on the
\nassessee or any person in consequence of, or
\nto give effect to, any finding, direction or order
\nmade under Sections 20, 21, 22, 22A, 23 or 24
\nor any judgment, or order made by the
\nSupreme Court,  the High Court, or any other
\nCourt.\n<\/p>\n
21. Revisional powers of Joint
\nCommissioners.:\n<\/p>\n
(1) The Deputy Commissioner may of his own
\nmotion call for and examine the record of any
\norder passed or proceeding recorded under the
\nprovisions of this Act by an Commercial Tax
\nOfficer subordinate to him for the purpose of
\nsatisfying himself as to the legality or propriety
\nof such order or as to the regularity of such
\nproceeding in so far as it is prejudicial to the
\ninterests of the revenue and may pass such
\norder with respect thereto as he thinks fit.\n<\/p>\n
 (2) the Joint Commissioner may of his own
\nmotion call for and examine the record of any
\norder passed or proceeding recorded under the
\nprovisions of this Act by any officer not above
\nthe rank of a Deputy Commissioner, for the
\npurpose of satisfying himself as to the legality
\nor propriety of such order or as to the
\nregularity of such proceeding in so far as it is
\nprejudicial to the interests of the revenue and
\npass such order with respect there to as he
\nthinks fit.\n<\/p>\n
(3) In relation to an order of assessment
\npassed under this Act, the power under sub–
\nsections (1) and (2) shall be exercisable only
\nwithin a period of four years from the date on
\nwhich the order was passed.\n<\/p>\n
(4) No order shall be passed under sub-section
\n(1) or sub-section (2) enhancing any
\nassessment, unless an opportunity has been
\ngiven to the assessee to show cause against
\nthe proposed enhancement.\n<\/p>\n
(5)\tThe power under this Section shall not be
\nexercisable in respect of matters subjected to
\nappeal under Section 20.\n<\/p>\n
(6) Every order passed in revision under this
\nSection shall subject to the provisions of
\nSections 22 to 24 and 25-A be final.\n<\/p>\n
Explanation: For the purposes of this section,
\n‘record’ shall include all records relating to any
\nproceedings under this Act available at the
\ntime of examination by the Joint
\nCommissioner.”\n<\/p>\n
\tA copy of the Budget speech introducing the amendment
\nwas placed on record by learned counsel for the parties. The
\nFinance Minister’s speech shows that the proviso was
\nintended to provide additional benefit or relief. The proviso
\nappears to have been introduced as a clarificatory measure.
\nThere is no mention as to the date after which benefit can be
\ngranted in respect of the goods which have suffered tax.
\nTherefore, the assessment period concerned as sought to be
\nintroduced by the revenue has no foundation. The proviso
\nclearly states that once the goods have suffered the tax they
\nwould not be subject to tax again. As observed by this Court in
\nZile Singh v. State of Haryana and Ors.<\/a> (2004 (8) SCC 1) for
\nthe purpose of determining that the proviso is clarificatory or
\nnot, the date when it is introduced is relevant. Paras 11 to 21
\nof the judgment are relevant and they read as follows:\n<\/p>\n
11. According to the appellant, the disqualification
\nimposed by Section 13-A(l)(c) of the First
\nAmendment remained in operation only for a period
\nof one year and would have in ordinary course
\nceased to operate on the  expiry of the period of one
\nyear from 5-4-1994. The citizens were justified in
\narranging their affairs including the enlargement of
\ntheir families keeping in view the provision of law as
\nit stood. However, the Second Amendment Act
\neffective from 4-10-1994 made a difference. On that
\nday, the legislature specifically provided that a
\nperson having more than two children on or after
\nthe expiry of one year shall stand disqualified. This
\nperiod of one year, in the  submission of the
\nappellant, should be calculated from 4-10-1994 and
\nnot 5-4-1994 and if that be done the birth of the
\nchild on 13-8-1995 would not attract the
\ndisqualification.\n<\/p>\n
12. This plea of the appellant raises a few
\ninteresting questions, such as, the nature of the
\namendment i.e. whether it is at all retrospective in
\noperation, and if not, whether the provision as
\namended by the Second Amendment applies to the
\nappellant.\n<\/p>\n
13. It is a cardinal principle of construction that
\nevery statute is prima facie prospective unless it is
\nexpressly or by necessary implication made to have
\na retrospective operation. But the rule in general is
\napplicable where the object of the statute is to affect
\nvested rights or to impose new burdens or to impair
\nexisting obligations. Unless there are words in the
\nstatute sufficient to show the intention of the
\nlegislature to affect existing rights, it is deemed to
\nbe prospective only – “nova constitutio futuris
\nformani imponere debet non praeteritis”  a new
\nlaw ought to regulate what is to follow, not the past.
\n(See Principles of Statutory Interpretation by Justice
\nG.P. Singh, 9th Edn., 2004 at p. 438.) It is not
\nnecessary that an express provision be made to
\nmake a statute retrospective and the presumption
\nagainst retrospectivity may be rebutted by
\nnecessary implication especially in a case where the
\nnew law is made to cure an acknowledged evil for
\nthe benefit of the community as a whole (ibid., p.\n<\/p>\n
440).\n<\/p>\n
14. The presumption against retrospective operation
\nis not applicable to declaratory statutes. In
\ndetermining, therefore, the nature of the Act, regard
\nmust be had to the substance rather than to the
\nform. If a new Act is “to explain” an earlier Act, it
\nwould be without object unless construed
\nretrospectively. An explanatory Act is generally
\npassed to supply an obvious omission or to clear up
\ndoubts as to the meaning of the previous Act. It is
\nwell settled that if a statute is curative or merely
\ndeclaratory of the previous law retrospective
\noperation is generally intended…. An amending Act
\nmay be purely declaratory to clear a meaning of a
\nprovision of the principal Act which was already
\nimplicit. A clarificatory amendment of this nature
\nwill  have retrospective effect (ibid., pp. 468-69).\n<\/p>\n
15. Though retrospectivity is not to be presumed
\nand rather there is presumption against
\nretrospectivity, according to Craies (Statute Law,
\n7th Edn.), it is open for the legislature to enact laws
\nhaving retrospective operation. This can be achieved
\nby express enactment or by necessary implication
\nfrom the language employed. If it is a necessary
\nimplication from  the language employed that the
\nlegislature intended a particular section to have a
\nretrospective operation, the courts will give it such
\nan operation. In the absence of a retrospective
\noperation having been expressly given, the courts
\nmay be called upon to construe the provisions and
\nanswer the question whether the legislature had
\nsufficiently expressed that intention giving the
\nstatute retrospectivity. Four factors are suggested
\nas relevant: (i) general scope and purview of the
\nstatute; (ii) the remedy sought to be applied; (iii) the
\nformer state of the law; and (iv) what it was the
\nlegislature contemplated. (p. 388) The rule against
\nretrospectivity does not extend to protect from the
\neffect of a repeal, a privilege which did not amount
\nto accrued right. (p. 392)<\/p>\n
16. Where a statute is passed for the purpose of
\nsupplying an obvious omission in a former statute
\nor to “explain a former statute, the subsequent
\nstatute has relation back to the time when the prior
\nAct was passed. The rule against retrospectivity is
\ninapplicable to such legislations as are explanatory
\nand declaratory in nature. A classic illustration is
\nthe case of Attorney General v. Pougett (Price at p.\n<\/p>\n
392). By a Customs Act of 1873 (53 Geo. 3, c. 33) a
\nduty was imposed upon hides of 9s 4d, but the Act
\nomitted to state that it was to be 9s 4d per cwt., and
\nto remedy this omission another Customs Act (53
\nGeo. 3, c. 105) was passed later in the same year.
\nBetween the passing of these two Acts some hides
\nwere exported, and it was contended that they were
\nnot liable to pay the duty of 9s 4d per cwt., but
\nThomson, C.B., in giving judgment for the Attorney
\nGeneral, said: (ER p. 134)<\/p>\n
“The duty in this instance was, in fact,
\nimposed by the first Act; but the gross
\nmistake of the omission of the weight, for
\nwhich the sum expressed was to have
\nbeen payable. occasioned the amendment
\nmade by the subsequent Act: but that
\nhad reference to the former statute as
\nsoon as it passed, and they must be
\ntaken together as if they were one and the
\nsame Act:” (Price at p. 392)<\/p>\n
17. Maxwell states in his work on Interpretation of
\nStatutes (12th Edn.) that the rule against
\nretrospective operation is a presumption only, and
\nas such it “may be overcome, not only by express
\nwords in the Act but also by circumstances
\nsufficiently strong to displace it” (p. 225), if the
\ndominant intention of the legislature can be clearly
\nand doubtlessly spelt out, the inhibition contained
\nin the rule against perpetuity becomes of doubtful
\napplicability as the “inhibition of the rule” is a
\nmatter of degree which would “vary secundum
\nmateriam” (p. 226). Sometimes, where the sense of
\nthe statute demands it or where there has been an
\nobvious mistake in drafting, a court will be prepared
\nto substitute another word or phrase for that which
\nactually appears in the text of the Act (p. 231).\n<\/p>\n
18. In a recent decision of this Court in National
\nAgricultural Coop. Marketing Federation of India
\nLtd. v. Union of India<\/a> (2003 (5) SCC 23)  it has been
\nheld:\n<\/p>\n
“that there is no fixed formula for the
\nexpression of legislative intent to give
\nretrospectivity to an enactment. Every
\nlegislation whether prospective or
\nretrospective has to he subjected to the
\nquestion of legislative competence. The
\nretrospectivity is liable to be decided on a
\nfew touchstones such as: (i) the words
\nused must expressly provide or clearly
\nimply retrospective operation; (ii) the
\nretrospectivity must be reasonable and
\nnot excessive or harsh, otherwise it runs
\nthe risk of being struck down as
\nunconstitutional: (iii) where the
\nlegislation is introduced to overcome a
\njudicial decision, the power cannot be
\nused to subvert the decision without
\nremoving the statutory basis of the
\ndecision. There is no fixed formula for the
\nexpression of legislative intent to give
\nretrospectivity to an enactment. A
\nvalidating clause coupled with a
\nsubstantive statutory change is only one
\nof the methods to leave actions
\nunsustainable under the un-amended
\nstatute, undisturbed. Consequently, the
\nabsence of a validating clause would not
\nby itself affect the retrospective operation
\nof the statutory provision, if such
\nretrospectivity is otherwise apparent”.\n<\/p>\n
19. The Constitution Bench in Shyam Sunder v.
\nRam Kumar<\/a> (2001 (8) SCC 24)  has held: (SCC p.
\n49, para 39)-\n<\/p>\n
“Ordinarily when an enactment declares
\nthe previous law, it requires to be given
\nretroactive effect. The function of a
\ndeclaratory statute is to supply an
\nomission or to explain a previous
\nstatute and when such an Act is passed,
\nit comes into effect when the previous
\nenactment was passed. The legislative
\npower to enact law includes the power
\nto declare what was the previous law
\nand when such a declaratory Act is
\npassed, invariably it has been held to be
\nretrospective. Mere absence of use of the
\nword ‘declaration’ in an Act explaining
\nwhat was the law before may not appear
\nto be a declaratory Act but if the court
\nfinds an Act as declaratory or
\nexplanatory, it has to be construed as
\nretrospective.” (p. 2487).\n<\/p>\n
20. In Bengal Immunity Co. Ltd. v. State of Bihar<\/a>
\n(1955 (2 SCR 603), Heydon case was cited with
\napproval. Their Lordships have said: (SCR pp. 632-\n<\/p>\n
33)<\/p>\n
“It is a sound rule of construction of a
\nstatute firmly established in England as
\nfar back as 1584 when Heydon case was
\ndecided that-\n<\/p>\n
‘.for the sure and true
\ninterpretation of all statutes in
\ngeneral (be they penal or
\nbeneficial, restrictive or enlarging
\nof the common law) four things
\nare to be discerned and
\nconsidered-\n<\/p>\n
 1st. What was the common law
\nbefore the making of the Act.\n<\/p>\n
2nd. What was the mischief and
\ndefect for which the common law did
\nnot provide.\n<\/p>\n
3rd. What remedy Parliament hath
\nresolved and appointed to cure the
\ndisease of the Commonwealth, and<\/p>\n
4th. The true reason of the remedy;\n<\/p>\n
and then the office of all the judges
\nis always to make such construction
\nas shall suppress the mischief, and
\nadvance the remedy, and to
\nsuppress subtle inventions and
\nevasions for continuance of the
\nmischief, and pro privato commodo
\nand to add force and life to the cure
\nand remedy, according to the true
\nintent of the makers of the Act, pro
\nbono publico’.”\n<\/p>\n
21. In Allied Motors (P) Ltd. v. CIT<\/a> (1997 (3) SCC\n<\/p>\n
472) certain unintended consequences flowed from
\na provision enacted by Parliament. There was an
\nobvious omission. In order to cure the defect, a
\nproviso was sought to be introduced  through an
\namendment. The Court held that literal
\nconstruction was liable to be avoided if it defeated
\nthe manifest object and purpose of the Act. The rule
\nof reasonable interpretation should apply.
\n“A proviso which is inserted to remedy
\nunintended consequences and to make
\nthe provision workable, a proviso which
\nsupplies an obvious omission in the
\nsection and is required to be read into the
\nsection to give the section a reasonable
\ninterpretation, requires to be treated as
\nretrospective in operation so that a
\nreasonable interpretation can be given to
\nthe section as a whole.” (SCC pp. 479-80,
\npara 13)<\/p>\n
\tThe Budget Speech speaks of the goods “already been
\nsubjected to tax under the Act” and does not even by
\nimplication state that in order to be entitled to the benefit the
\ngoods ought to have been taxed after a particular date. It is
\npurely on the event of goods having suffered tax once or in
\nother words the taxable event having taken place once.\n<\/p>\n
The normal function of a proviso is to except something
\nout of the enactment or to qualify something enacted therein
\nwhich but for the proviso would be within the purview of the
\nenactment. As was stated in Mullins v. Treasurer of Survey
\n[1880 (5) QBD 170, (referred to in Shah Bhojraj Kuverji Oil
\nMills and Ginning Factory v. Subhash Chandra Yograj Sinha
\n(AIR<\/a> 1961 SC 1596) and Calcutta Tramways Co. Ltd. v.
\nCorporation of Calcutta (AIR<\/a> 1965 SC 1728); when one finds a
\nproviso to a section the natural presumption is that, but for
\nthe proviso, the enacting part of the section would have
\nincluded the subject matter of the proviso. The proper function
\nof a proviso is to except and to deal with a case which would
\notherwise fall within the general language of the main
\nenactment and its effect is confined to that case. It is a
\nqualification of the preceding enactment which is expressed in
\nterms too general to be quite accurate. As a general rule, a
\nproviso is added to an enactment to qualify or create an
\nexception to what is in the enactment and ordinarily, a proviso
\nis not interpreted as stating a general rule. “If the language of
\nthe enacting part of the statute does not contain the
\nprovisions which are said to occur in it you cannot derive
\nthese provisions by implication from a proviso.” Said Lord
\nWatson in West Derby Union v. Metropolitan Life Assurance
\nCo. (1897 AC 647)(HL). Normally, a proviso does not travel
\nbeyond the provision to which it is a proviso. It carves out an
\nexception to the main provision to which it has been enacted
\nas a proviso and to no other. (See A.N. Sehgal and Ors. v. Raje
\nRam Sheoram and Ors. (AIR<\/a> 1991 SC 1406), Tribhovandas
\nHaribhai Tamboli v. Gujarat Revenue Tribunal and Ors. (AIR<\/a>
\n1991 SC 1538) and Kerala State Housing Board and Ors. v.
\nRamapriya Hotels (P)Ltd. and Ors.<\/a> (1994 (5) SCC 672).\n<\/p>\n
“This word (proviso) hath divers operations.  Sometime it
\nworketh a qualification or limitation; sometime a condition;
\nand sometime a covenant” (Coke upon Littleton 18th Edition,\n<\/p>\n
146)<\/p>\n
\t“If in a deed an earlier clause is followed by a later clause
\nwhich destroys altogether the obligation created by the earlier
\nclause, the later clause is to be rejected as repugnant, and the
\nearlier clause prevails….But if the later clause does not
\ndestroy but only qualifies the earlier, then the two are to be
\nread together and effect is to be given to the intention of the
\nparties as disclosed by the deed as a whole” (Per Lord
\nWrenbury in Forbes v. Git [1922] 1 A.C. 256).\n<\/p>\n
\tA statutory proviso “is something engrafted on a
\npreceding enactment” (R. v. Taunton, St James, 9 B. & C.\n<\/p>\n
836).\n<\/p>\n
\t“The ordinary and proper function of a proviso coming
\nafter a general enactment is to limit that general enactment in
\ncertain instances” (per Lord Esher in Re Barker, 25 Q.B.D.\n<\/p>\n
285).\n<\/p>\n
\tA proviso to a section cannot be used to import into the
\nenacting part something which is not there, but where the
\nenacting part is susceptible to several possible meanings it
\nmay be controlled by the proviso (See Jennings v. Kelly [1940]
\nA.C. 206).\n<\/p>\n
The above position was highlighted in Ali M.K. & Ors. v.
\nState of Kerala and Ors. (2003 (11) SCC 632) and Union of
\nIndia v. Sanjay Kumar Jain<\/a> (2004 (6) SCC 708)  <\/p>\n
\tThe stand of the revenue does not appear to be very
\nconsistent. Though in the counter affidavit before the High
\nCourt it was stated that the Circular is not binding on the
\nauthorities, it is conceded by learned counsel for the State
\nGovernment that it is in fact binding on the department
\nofficials.  The Circulars read as follows:\n<\/p>\n
“COMMISSIONER OF COMMERCIAL TAXES
\nCIRCULAR No. 5\/96-97 dated 12.4.1996<\/p>\n
Sub: Salient features of the Amendments effective
\nfrom 1.4.1996- reg.\n<\/p>\n
Ref:- 1.\tGovt. Notification No. DPAL 15 LGN 96,
\nDated 21.3.1996 published in Karnataka Gazatte
\nExtraordinary Part IV Section 2B, dated 21.3.1996.\n<\/p>\n
2. Govt. Notifications No. FD35 CSL 96 (1 to 25)
\ndated 30.03.96<\/p>\n
3. Govt. Notifications No. FD 85 CET 96 (1 to 3)
\ndated 30.03.96.\n<\/p>\n
4. Govt. Notifications No. FD 4 CRC 96 dated
\n30.03.96<\/p>\n
As per the Karnataka Taxation laws (Second
\nAmendment) Act, 1996, amendments are effected to
\nprovisions of the below mentioned Acts;\n<\/p>\n
i) Karnataka Tax on Luxuries Act, 1979.\n<\/p>\n
ii) Karnataka Tax on Professions, Trades,
\nCallings and Employments Act, 1976.\n<\/p>\n
iii) Karnataka Entertainments Tax Act, 1958.\n<\/p>\n
iv) Karnataka Agricultural Income Tax Act,
\n1957.\n<\/p>\n
v) Karnataka Sales Tax Act, 1957.\n<\/p>\n
2. Salient features of the amendments are explained
\nhereunder for guidance and compliance.  (Specific
\nmention is made about the amendments which are
\nintroduced with retrospective effect and in all other
\ncases, the amendments take prospective effect, i.e.,
\nw.e.f. 1.4.1996):\n<\/p>\n
\t\txx\t\txx\t\txx\t\txx<\/p>\n
Amendment of Section 5-C- Levy of tax on the
\ntransfer of the right to use any goods.\n<\/p>\n
16. Section 5-C in force prior to this amendment
\nprescribed ‘total turnover” as the basis for levy of
\ntax. The High Court of Karnataka in the judgment
\nrendered in the case of M\/s Shetty Leasing (India)
\nLtd. Vs. Union of India 100 STC 533, had struck
\ndown Section 5-C as beyond the competence of
\nState Legislature. The amendment now introduced
\nsubstitutes the whole of Section 5-C with
\nretrospective effect from 01.4.86 so as to overcome
\nthe aforesaid judgment. The newly substituted
\nsection prescribes ”taxable turnover’ as the basis for
\nlevy of tax.  Assessments, if any, completed
\nadopting the basis of ‘taxable turnover’ for levy of
\ntax, stand automatically validated by the validation
\nClause at Section 7 of the Amendment Act. In all
\nsuch cases, it would be in order for the assessing
\nauthorities to pursue action for realization of the
\ntaxes levied by issuance of simple notices, without
\ngoing in for rectifications, re-assessments or
\nrevisions.\n<\/p>\n
17. Computation of taxable turnover for the
\npurposes of Section 5-C now substituted, would
\nhave to be in accordance with the provisions of Rule
\n6(4) of KST Rules, 1957. Accordingly, among other
\nthings, where goods e.g. motor vehicles, machinery,
\netc. specified in Second Schedule are purchased
\nfrom registered dealers in Karnataka and are given
\non lease, such lease involving transfer of the right to
\nuse the KST suffered goods would be eligible for
\nexemption in terms of clause (i) of sub rule (4) of
\nRule 6.\n<\/p>\n
18. All the 15 categories of goods specified in the
\nSeventh Schedule are made liable to tax at the
\nuniform rate of 4%”.\n<\/p>\n
“No. RFD. CR.53\/97-98
\n\t\t\t\t\tOffice of the Commissioner of
\nCommercial Taxes in Karnataka,
\nBangalore  560 009
\ndated 23.10.1999<\/p>\n
COMMISSIONER OF COMMERCIAL TAXES
\nCIRCULAR No. 31\/99-2000<\/p>\n
Sub: KST Act, 1957  Amendment of Section 5-C
\nby Karnataka Taxation Laws (Amendment Act 1996)\n<\/p>\n
– certain instructions -reg.\n<\/p>\n
Ref: Commissioner of Commercial Taxes Circular
\nNo. 5 of 1996-97 dated April 1996.\n<\/p>\n
In Commissioner of Commercial Taxes Circular
\nNo. 5 of 1996-97, dated 12 April, 1996, while
\nexplaining the salient features of the amendments
\neffected to the provisions of Karnataka Sales Tax
\nAct, 1957 by Karnataka Taxation laws (Second
\nAmendment) Act, 1996 at paras 16 and 17, the
\nposition of law relating to Section 5-C of the
\nKarnataka Sales Tax Act, 1957 as amended by the
\nsaid Amendment Act was stated to be as follows:\n<\/p>\n
“16. Section 5-C in force prior to this
\namendment prescribed “total turnover” as
\nthe basis for levy of tax. The Hon’ble High
\nCourt of Karnataka in the judgment
\nrendered in the case of M\/s Shetty
\nLeasing (India) Ltd. Vs. Union of India
\n100 STC 533 had struck down Section 5-
\nC as beyond the competence of State
\nlegislature. The amendment now
\nintroduced substitutes the whole of
\nSection 5-C with retrospective effect from
\n01.4.1986 so as to overcome the
\naforesaid judgment. The newly
\nsubstituted section prescribes ‘taxable
\nturnover’ as the basis for levy of tax.
\nAssessments, if any, completed adopting
\nthe basis of ‘taxable turnover’ for levy of
\ntax, stand automatically validated by the
\nvalidation clause at section 7 of the
\nAmendment Act. In all such cases, it
\nwould be in order for the assessing
\nauthorities to pursue action for
\nrealization of the taxes levied by issuance
\nof simple notices, without going in for
\nrectification, re-assessments or revisions.\n<\/p>\n
17. Computation of taxable turnover for
\nthe purpose of Section 5-C now
\nsubstituted, would have to be in
\naccordance with the provisions of Rule
\n6(4) of Karnataka Sales Tax, 1957.\n<\/p>\n
Accordingly, among other things, where
\ngoods e.g. motor vehicles, machinery etc.,
\nspecified in second schedule are
\npurchased from registered dealers in
\nKarnataka and are given on lease, such
\nlease involving transfer of the right to use
\nthe KST suffered goods would be eligible
\nfor exemption in terms of clause (i) of
\nsub-rule (4) of Rule 6.”\n<\/p>\n
2. On a review of the said circular, it is noticed that
\nthe position or law explained therein in respect of
\nsection 5-C does not state the correct position of law
\nfor the following reasons:\n<\/p>\n
(i)\tThere is a distinction between a
\ncontract of sale as defined in section 4 of
\nthe Sale of Goods Act, 1930 and a
\ntransfer of the right to use goods for any
\npurposes. While in a transaction of ‘sale’
\nas defined under Sale of Goods Act, there
\nis transfer of ownership in goods and in a
\ntransaction involving transfer of the right
\nto use goods, there is no such transfer of
\nownership in goods. Consequent to
\ninsertion of clause 29-A (d) to Article 366
\nof the Constitution of India by 46th
\nAmendment to the Constitution,
\nKarnataka Sales Tax Act, 1957 was
\namended w.e.f. 01.4.1996 to treat the
\ntransfer of the right to use goods as
\ndeemed sale for the purposes of levy of
\ntax on such transaction.\n<\/p>\n
(ii)\t Section 5-C of the Karnataka Sales
\nTax Act, 1957 is an independent charging
\nsection. Section 5-C contemplates levy of
\ntax on taxable turnover in respect of
\ntransfer of the right to use any goods
\nspecified in Seventh Schedule of the Act
\nfor any purposes (whether or not for
\nspecified period). There is nothing in
\nSection 5-C to indicate that the goods
\nwhich are subject to tax on their transfer
\nof the right to use (lease) cannot be
\nsubject to tax under section 5-C when
\nright to use such goods are again
\ntransferred after the expiry of the
\nspecified period for which it was hired
\nearlier. Therefore, the levy under the said
\nprovision is multipoint in nature. The
\nvery goods when leased out more than
\nonce, such transaction attract levy every
\ntime they are leased out.\n<\/p>\n
(iii)\t As the Section 5-C starts with non-
\nobstante clause namely “notwithstanding
\nanything contained in sub section 91 or
\nsub-section (3) of Section 5”, the goods,
\nin respect of which right to use goods is
\ntransferred, even though have been
\nsubjected to tax under the said sub-
\nsections of Section  5, they shall be liable
\nto tax under Section 5-C. In other words,
\nthe goods which have suffered tax under
\nSection 5 are not excluded from the
\npurview of Section 5-C when right to use
\nof such goods are transferred.\n<\/p>\n
In view of the above, the following revised
\ninstructions are issued:\n<\/p>\n
(i) Section 5-C was substituted
\nretrospectively w.e.f. 01.4.1986 by
\namending Karnataka Taxation Laws
\n(Second Amendment) Act, 1996. The
\nnewly substituted section 5-C provides
\nfor levy of tax on the ‘taxable turnover’ in
\nrespect of transfer of the right to use any
\ngoods specified in seventh schedule to the
\nAct for any purposes (whether or not for
\nspecified period).\n<\/p>\n
(ii) The tax under section 5-C shall be
\nlevied on taxable turnover in respect of
\ntransfer of right to use any goods
\nspecified in the schedule notwithstanding
\nthat such goods have already been
\nsubjected to tax under any of the
\nprovisions of the Act including section 5-
\nC.\n<\/p>\n
(iii)\tIn determining the taxable turnover
\nfor the purposes of section 5-C the
\namounts for which the goods whose right
\nto use in transferred has been purchased
\nfrom another registered dealer liable to
\npay tax under sub-section 91 or sub-
\nsection (3) of Section 5, shall not be
\ndeducted from the total turnover
\ndetermined.\n<\/p>\n
(iv) Assessments, if any completed before
\n01.4.1996 adopting the basis of ‘taxable
\nturnover’ for levy of tax stand
\nautomatically validated by the validation
\nclause at section 7 of the Amendment
\nAct.\n<\/p>\n
(v) Assessments if any completed by
\nallowing the deductions of the amounts
\nrelatable to goods purchased from
\nanother registered dealer liable to tax,
\nsuch assessments shall be referred to the
\nconcerned Joint -Commissioner of
\nCommercial Taxes (Admn.),  immediately
\nfor initiating action section 21 to revise
\nthe assessment order in accordance with
\nthese instructions.\n<\/p>\n
(vi) Where any order passed under
\nSection 21 or appeal order under Section
\n20 is contrary to instructions issued in
\nthis circular, such orders shall be
\nreferred to the Commissioner immediately
\nfor initiating action under section 22-A.\n<\/p>\n
\t\t\t\t\t\t\tSd\/-\n<\/p>\n
\t\t\t\t\t\t(V. MADHU)
\n Commissioner of Commercial Taxes”.\n<\/p>\n
  \tA bare reading of the Circular dated 23.10.1999 shows
\nthat it was a review of the earlier Circular and that the
\nCommissioner was of the view that the position of law
\nexplained in the earlier Circular did not state the correct
\nposition in law and, therefore, the revised instructions were
\nissued. There was a direction to the concerned Joint
\nCommissioner to immediately initiate action under Section 21
\nto revise the assessment orders. It was further stated that if
\nany order passed under Section 21 or appeal order under
\nSection 20 was contrary to the instructions issued, the same
\nwere to be referred to him for initiating action under Section
\n22-A of the Act. This leaves no manner of doubt that the
\nsubordinate officers had no option but to comply with the
\ndirections given.\n<\/p>\n
\tThe notices issued under Section 12-A of the Act
\ninitiating the assessment proceedings clearly show that they
\nwere on the basis of the instructions issued.\n<\/p>\n
\tAs observed by this Court in Commissioner of Trade Tax,
\nU.P. and Anr. v. Kajaria Ceramics Ltd.<\/a> (2005 (11) SCC 149)
\nthere are various Circulars, some are binding and some are
\nnot binding. Though strong reliance was placed by learned
\ncounsel for the revenue on Addl. Commissioner (Legal) and
\nAnr. v. Jyoti Traders and Anr.<\/a> (1999 (2) SCC 77) a close
\nreading of the decision shows that it does not support the
\nstand of the revenue and on the contrary support the stand of
\nthe appellants.\n<\/p>\n
\tParticular reference may be made to paragraphs 22 and
\n25 which read as follows:\n<\/p>\n
“22. In Ahmedabad Manufacturing & Calico Printing
\nCo. Ltd. v. S.G. Mehta, ITO (AIR 1963 SC 1436) in
\nits assessment to income tax for the year 1952-53,
\nthe appellant, a company had been granted under
\nthe provisions of the finance Act, 1952, a rebate on
\na portion of its profits of the previous year, that is,
\n1951 which it had not distributed as dividends to
\nits shareholders. In the next assessment year 1953-
\n54, the appellant used a part of the aforesaid
\nundistributed profits for declaring dividends. As the
\nlaw then stood, nothing could be done by the
\nRevenue Authorities to withdraw the rebate earlier
\ngranted on the ground of the profits being utilized in
\ndeclaring dividends in a later year. From 1.4.1956,
\nhowever, there was a change in the law as sub-
\nsection (10) of section 35 of the Income Tax Act,
\n1922 was brought into force then. By an order made
\non 27-3-1958, under the sub-section, the aforesaid
\nrebate was withdrawn and the appellant was called
\nupon to refund it. The appellant then applied to the
\nHigh Court at Bombay for a writ to quash the order
\nof 27-3-1958 on the ground that sub-section (10)
\nwas not applicable to the facts of this case. That
\napplication was dismissed by the High Court. The
\nappeal in the Supreme Court was against this
\ndecision of the High Court at Bombay dismissing
\nthe application. Now sub-section (10) of Section 35
\nof the Income Tax Act was enacted by the Finance
\nAct of 1956. That sub-section, insofar as it is
\nnecessary to state for the purpose of this case,
\nprovided that where in any of the Assessment Years
\n1948-49 to 1955-56, a rebate of income tax was
\nallowed to a company under the Finance Act
\nprevailing in that year on a part of its total income<\/p>\n
“and subsequently the amount on which
\nthe rebate of income tax was allowed as
\naforesaid is availed of by the company,
\nwholly or partly, for declaring dividends
\nin any year … the Income Tax Officer
\nshall re-compute the tax payable by the
\ncompany by reducing the rebate
\noriginally allowed”.\n<\/p>\n
The sub-section in substance permits a rebate duly
\nallowed in any year before it came into force to be
\nwithdrawn if “subsequently” the amount on which
\nthe rebate was allowed “is availed of'” for declaring
\ndividends in any year. The appellant contended that
\nthe sub-section did not apply unless the amount on
\nwhich the rebate was granted was availed of for
\ndeclaring dividends after the sub-section had come
\ninto force, that is, after 1-4-1956 and, therefore, it
\ndid not apply to the present case. It was said that if
\nit were not so, the sub-section would be given a
\nretrospective operation and the rule was that it was
\nto be presumed that a statute dealing with
\nsubstantive rights was not to have operation. This
\nCourt, per majority (3:2), held that sub-section (10)
\nof Section 35 was intended to have a retrospective
\noperation and was applicable to the present case.
\nSarkar, J. who was in majority, in his concurring
\njudgment, observed as under:\n<\/p>\n
“There is no dispute that by sub-section
\n(10) the legislature intended to penalise a
\ncase where subsequent to its enactment,
\nthe amount on which rebate had been
\ngranted was utilised in declaration of
\ndividends. Now is there any reason to
\nthink that the legislature did not want to
\nimpose the penalty also on those who had
\nearlier utilised the amount in declaration
\nof dividends? There was no special merit
\nin these    latter cases. And I also think
\nthat they formed the majority of the
\ncases. The grant of rebate having been
\nstopped after March 31, 1956, there was
\nno occasion to provide for cases of such
\ngrant thereafter. All these circumstances
\nlead me to the view that the intention of
\nthe legislature was to penalise the cases
\nof utilisation of amounts on which rebate
\nhad been granted in payment of
\ndividends which had happened before the
\nsub-section came into force. The remedy
\nwhich the sub-section provided would
\nlargely fail in any other view. The general
\nscope and purview of the sub-section and
\na consideration of the evil which it was
\nintended to remedy lead me to the
\nopinion that the intention of the
\nlegislature clearly was that the sub-
\nsection should apply to the facts that we
\nhave in this case”.\n<\/p>\n
25. The two decisions in the cases of Ahmedabad
\nManufacturing & Calico Printing Co. Ltd. and
\nBiswanath Jhunjhunwalla are more closer to the
\nissue involved in the present case before us. They
\nlaid down that it is the language of the provision
\nthat matters and when the meaning is clear, it has
\nto be given full effect. In both these cases, this
\nCourt held that the proviso which amended the
\nexisting provision gave it retrospectivity. When the
\nprovision of law is explicit, it has to operate fully
\nand there could not be any limits to its operation.
\nThis Court in Biswanath Jhunjhunwalla case said
\nthat if the language expressly so states or clearly
\nimplies, retrospectivity must be given to the
\nprovision. Under Section 34 of the Income Tax Act,
\n1922, it is the service of the notice which is the sine
\nqua non, an indispensable requisite, for the
\ninitiation of assessment or reassessment
\nproceedings where income had escaped assessment.
\nThat is not so in the present case. Under sub-
\nsection (1) of Section 21 of the Act before its
\namendment, the assessing authority may, after
\nissuing notice to the dealer and making such
\ninquiry as it may consider necessary, assess or
\nreassess the dealer according to law. Sub-section (2)
\nprovided that except as otherwise provided in this
\nsection, no order for any assessment year shall be
\nmade after the expiry of 4 years from the end of
\nsuch year. However, after the amendment, a proviso
\nwas added to sub-section (2) under which the
\nCommissioner of Sales Tax authorises the assessing
\nauthority to make assessment or reassessment
\nbefore the expiration of 8 years from the end of such
\nyear notwithstanding that such assessment or
\nreassessment may involve a change of opinion. The
\nproviso came into force w.e.f. 19-2-1991. We do not
\nthink that sub-section (2) and the proviso added to
\nit leave anyone in doubt that as on the date when
\nthe proviso came into force, the Commissioner of
\nSales Tax could authorise making of assessment or
\nreassessment before the expiration of 8 years from
\nthe end of that particular assessment year. It is
\nimmaterial if a period for assessment or
\nreassessment under sub-section (2) of Section 21
\nbefore the addition of the said proviso had expired.
\nHere, it is the completion of assessment or
\nreassessment under Section 21 which is to be done
\nbefore the expiration of 8 years of that particular
\nassessment year. Read as it is, these provisions
\nwould mean that the assessment for the year 1985-
\n86 could be reopened up to 31-3-1994.
\nAuthorisation by the Commissioner of Sales Tax
\nand completion of assessment or reassessment
\nunder sub-section (1) of Section 21 have to be
\ncompleted within 8 years of the particular
\nassessment year. Notice to the assessee follows the
\nauthorisation by the Commissioner of Sales Tax, its
\nservice on the assessee is not a condition precedent
\nto reopen the assessment. It is not disputed that a
\nfiscal statute can have retrospective operation. If we
\naccept the interpretation given by the respondents,
\nthe proviso added to sub section (2) of Section 21 of
\nthe Act becomes redundant. Commencement of the
\nAct can be different than the operation of the Act
\nthough sometimes, both may be the same. The
\nproviso now added to sub-section (2) of Section 21
\nof the Act does not put any embargo on the
\nCommissioner of Sales Tax not to reopen the
\nassessment if the period, as prescribed earlier, had
\nexpired  before the proviso came into operation. One
\nhas to see the language of the provision. If it is
\nclear, it has to be given its full effect. To reassure
\noneself, one may go into the intention of the
\nlegislature in enacting such provision. The date of
\ncommencement of the proviso to Section 21(2) of the
\nAct does not control its retrospective operation.
\nEarlier the assessment\/reassessment could have
\nbeen completed within four years of that particular
\nassessment year  and now by the amendment
\nadding the proviso to Section 21 (2) of the Act it is
\neight years. The only safeguard being that it is after
\nthe satisfaction of the Commissioner of Sales Tax.
\nThe proviso is operative from 19-2-1991 and a bare
\nreading of the proviso shows that the operation of
\nthis proviso relates and encompasses back to the
\nprevious eight assessment years. We need not refer
\nto the provisions of the Income Tax Act to interpret
\nthe proviso to Section 21(2) the language of which is
\nclear and unambiguous and so is the intention of
\nthe legislature. We are, thus, of the view that the
\nHigh Court was not right in quashing the sanction
\ngiven by the Commissioner of Sales Tax and notices
\nissued by the assessing authority in pursuance
\nthereof.”\n<\/p>\n
\tThe issues can be looked at from a different angle.
\nUndisputedly, the 1996 Circular was binding on the revenue
\nauthorities as is spelt out in the case of 12.4.1996 and
\n23.10.1999 Circulars. The assessments were completed on the
\nbasis of 12th April, 1996 Circular.  Merely because the
\nCommissioner changes his view\/opinion and according to him
\nit was review of the earlier decision that cannot have any effect
\non any assessment which has been completed on the basis of
\nthe 1996 Circular.\n<\/p>\n
\tThat being so, the question of re-opening the assessment
\nby mere change of opinion is entirely impermissible.\n<\/p>\n
Though these aspects need not be taken note of in view of
\nthe conclusion that the proviso was clarificatory in nature and
\noperated with effect from the date Section 5-C was amended
\ni.e. 1.4.1986 yet this is an additional factor to set aside the
\nHigh Court’s judgment.\n<\/p>\n
\tIt is stated by a long line of decisions that reopening of
\nassessment is not permissible by mere change of the opinion
\nin the assessing officer.  Here it has not been disputed that the
\nCircular dated 23.10.1999 was on account of change of
\nopinion of the Commissioner that too while reviewing the
\nearlier Circular. It could not be brought to our notice as to
\nwhich provision permitted the review.\n<\/p>\n
\tLearned counsel for the State submitted that the power is
\ninherent because the authority can correct his own mistaken
\nimpression about the interpretation. Prima facie, the plea is
\nwithout substance and can not be accepted. That question is
\nof academic interest in view of what has been stated above.
\nThe judgments of the learned Single Judge as affirmed by the
\nDivision Bench are indefensible, need to be set aside which we
\ndirect. The appeals are allowed. Costs made easy.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India M\/S Binani Industries Ltd., … vs Assistant Commissioner Of … on 4 April, 2007 Author: . A Pasayat Bench: Dr. Arijit Pasayat, S.H. Kapadia CASE NO.: Appeal (civil) 1784 of 2007 PETITIONER: M\/s Binani Industries Ltd., Kerala RESPONDENT: Assistant Commissioner of Commercial Taxes, VI Circle, Bangalore and Ors DATE OF JUDGMENT: […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-180154","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nM\/S Binani Industries Ltd., ... vs Assistant Commissioner Of ... on 4 April, 2007 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ms-binani-industries-ltd-vs-assistant-commissioner-of-on-4-april-2007\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"M\/S Binani Industries Ltd., ... vs Assistant Commissioner Of ... on 4 April, 2007 - 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