The Supreme Court held that Section 21 of the Assam General Sales Tax Act, 1993, which permits a four-year extension for assessment with the Commissioner’s sanction, applies only where no assessment was ever made within the original limitation period. It cannot be invoked to resurrect an assessment that was already completed and subsequently declared time-barred under Section 19. The Court emphasized a strict interpretation of fiscal statutes, ruling that the revenue cannot tax a subject by inference if the case falls outside the provision’s four corners.
Facts Of The Case:
The case involved M/s. Shiv Steel challenging reassessment orders for the financial years 2003-2004, 2004-2005, and 2005-2006 under the Assam General Sales Tax Act, 1993. The initial assessments for these years were completed by the tax authorities but were later declared time-barred, as they were not completed within the limitation period prescribed under Section 19 of the Act. Subsequently, the tax department sought to initiate a fresh reassessment process. To overcome the limitation hurdle, the department obtained sanction from the Commissioner and invoked Section 21 of the Act, which allows for assessment within four years from the expiry of the original limitation period, provided prior sanction from the Commissioner is secured. The appellant, M/s. Shiv Steel, contested this reassessment before the Gauhati High Court, arguing that the proceedings were invalid. The High Court, however, dismissed the writ petition, upholding the reassessment on the grounds that the Commissioner’s sanction legally extended the limitation period. Dissatisfied with this outcome, M/s. Shiv Steel appealed to the Supreme Court, contending that Section 21 could not be used to revive an assessment that had already been made and subsequently quashed as time-barred.
Procedural History:
The procedural history of this case began with the Assessing Officer passing reassessment orders against M/s. Shiv Steels for the assessment years 2003-2004 to 2005-2006. The appellant challenged these orders before the Gauhati High Court, contending they were time-barred under Section 19 of the Assam General Sales Tax Act, 1993. The High Court, in its common judgment dated September 21, 2012, dismissed the writ petition. It held that despite the initial assessments being invalid due to limitation, the department’s subsequent action of obtaining the Commissioner’s sanction under Section 21 of the Act rendered the fresh reassessment proceedings valid. The High Court remitted the matter to the Assessing Officer for a fresh assessment after hearing the appellant. Aggrieved by this decision, M/s. Shiv Steels filed the present civil appeal before the Supreme Court, which ultimately set aside the High Court’s judgment and allowed the appeals.
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Court Observation:
The Supreme Court made crucial observations on the interpretation of fiscal statutes, particularly Sections 19 and 21 of the Assam General Sales Tax Act, 1993. The Court held that Section 21, which allows for an extended period of four years for assessment with the prior sanction of the Commissioner, applies only in cases where no assessment whatsoever has been made within the original time limits specified under Section 19. It emphatically ruled that this provision cannot be invoked to resurrect a fresh reassessment proceeding after an initial assessment has already been undertaken and subsequently declared invalid for being time-barred. The Court underscored the fundamental principle of interpreting taxing statutes, stating that the liability of a subject to tax must be governed by the strict letter of the law. It concluded that if a case does not fall squarely within the four corners of the statutory provisions, no tax can be imposed by inference, analogy, or by probing the supposed intention of the legislature.
Final Decision & Judgement:
The Supreme Court allowed the appeals filed by M/s. Shiv Steels and set aside the common judgment and order of the Gauhati High Court. The Court held that the reassessment proceedings initiated by the revenue authorities after obtaining the Commissioner’s sanction under Section 21 of the Assam General Sales Tax Act, 1993, were invalid and without the authority of law. It ruled that Section 21, which provides an extended limitation period, is applicable only in a scenario where no assessment has been made at all within the original time limit prescribed under Section 19. Since assessments for the relevant years had already been undertaken and were subsequently held to be time-barred, the condition of “no assessment” for invoking Section 21 was not fulfilled. Consequently, the reassessment orders were quashed.
Case Details:
Case Title: M/S. SHIV STEELS vs. THE STATE OF ASSAM & ORS. Citation: 2025 INSC 1126 Appeal Number: Civil Appeal No. 4440 of 2014 Date of Judgement: 11th September, 2025 Judges/Justice Name: J.B. Pardiwala and Sandeep Mehta
Download The Judgement Here