1966 PLP 283 (PTD)

3. In their statement of the case the Tribunal explained "that from the reasoning adopted by their Lordships of the Supreme Court in‑ Nagina Silk Mill v. Income‑tax Officer (P. l. D 1963 S C 322) it is manifest that the word "year" in section 34, subsection (2) of the Income‑tax Act means a period of 365 days, is not the same thing as an assessment year nor the definition of year brought in by clause (17) to section 2 fitted in section 34 and some other sections like sections 33‑A and 35 and so on of that Act, which merely denote length of time". In fact their Lordships, in order to strengthen the view, they were taking, relied on the method of amending legislation followed in the Sales Tax Act and in that connection referred to the proviso to section 28 of that Act which alone validly enlarge the "period of limitation for the specified period of 1954‑55". On this parity of reasoning the Tribunal explained that "proviso to section 2 (20) of .the Sales Tax Act was also enacted for governmental accounting purposes in the same way as was found in clause (17) of the Income‑tax Act by the Supreme Court and did not affect the limitation period whenever provided in the Act. According to the Tribunal section 28 of the Sales Tax Act was analogous to section 34 of the Income‑tax Act and, therefore, section 2(20) of the Sales Tax Act adding a proviso to the definition of "year" was construed as clause (17) was done by the Supreme Court in the above‑noted case.

4. Section 28 of the Sales Tax Act, 1951 reads: - "If for any reason any tax payable under this Act has escaped assessment or has not been paid in any year the Sales -tax Officer may at any time within four years of the end of that year assess the tax payable after issuing notice to the assessee and making such inquiry as he considers necessary."

5. The learned counsel for the assessee has argued that in the case of the Sales Tax Act, the definition of the "year" should also be considered to have been incorporated into the Sales Tax Act for governmental accounting purposes and for this construction he relies on the following passage of the Supreme Court judgment at page 331 of P L D 1963 :‑ "Where the Legislature indeed contemplated the extension of a limitation period it apparently made an express enactment to that effect. Reference in this connection may be made to the following amendment effected in the Sales Tax Act of 1951 by section 5 of the newly inserted third Schedule to the Act, to section 28 of that Act . . . . . . Provided that for the purposes of making any assessment under this section for the year beginning on the first day of April 1954 and ending on the 31st day of March 1955, the period beginning on the first day of April 1958, and ending on the 30th day of June 1959,' shall be deemed to be one year." Here limitation seems to have been extended by three months but only in respect of one assessment year, viz., 1954‑55 for the purposes of that Act. If the Legislature had intended a similar extension as regards the period of limitation prescribed by sub section (2) of section 34 of the Act an identical devise could have been here adopted."

6. From the above observations it is quite apparent that provisions of subsection (2) of section 34 are not in pari materia with the provision of section 28 of the Sales Tax Act of 1951 Moreover, the word "year" was not defined. in the Income‑tax Act till the promulgation of the Finance Ordinance XXV of 1960 on the 30th of June 1960, which added a new clause after clause (16) of section 2 of that Act. Under the Sales Tax Act of 1931, the definition of the "year" was enacted right from its inception and under clause (20) of section 2 it has been defined to mean the financial year. Clause (19) of section 3 of General Clauses Act of 1897 defined financial year as the year commencing on the first day of April before its amendment. By General Clauses (Amendment) Ordinance, 1959, the definition of "year" given by clause (19) of section 3 of the General Clauses Act of 1897 was amended as follows: ‑ (a) As respects period before the first day of April 1959, the year commencing on the first day of April and ending on the 31st day of March, (b) as respects the period from the first day of April 1959, to the 30th day of June 1959' (both days inclusive), that period, and (c) thereafter the year commencing on the first day of July and ending on the 30th day of June." By Finance Ordinance of 1959, the following proviso was added to the definition of the "year" as given in clause (20) of section 2 of the Sales Tax Act of 1951 :‑ "Provided that as respects the period beginning on the first day of April 1959, and ending on the 30th day of June 1860, the said period shall be deemed to be a `financial year' and all the provisions of this Act shall be construed accordingly." It is thus apparent that there is a clear departure in the language of section 2 (17) of the Income‑tax Act and the_ proviso to clause (20) of section 2 of the Sales Tax Act of 1951, there fore, while reading the word "year" under section 28 or under any other section of the Sales Tax Act of 1951, it has to be construed subject to the definition clause while no such provision has been made for the definition of the "year" under the Income -tax Act of 1922. The Supreme Court in Nagina Silk Mill's case while interpreting the provision of section 34 (2) of the Income‑tax Act, held, "that the definition of the year was probably incorporated into the Act for governmental accounting purposes," but this argument will not be available to the assessee because under the Sales Tax Act the period commencing on the first day of April 1959, and ending on the 30th day of June 1960, which com prises of 15 months shall constitute one financial year whereas under the General Clauses Act the period from first day of April 1959 to 30th day of June 1959, comprising of three months only constitutes one financial year. The proviso to clause (20) of section 2 of the Sales Tax Act makes it clear that the definition of the "year" must yield to the context and on account of this expressed provision of the law the period of limitation mentioned in section 28 has to be construed accordingly. Their Lordships of the Supreme Court have remarked in Nagina Silk Mill's case that the limitation seems to have extended by three months but only in respect of one assessment year, i.e., 1954‑55 but the attention of the Supreme Court was not invited to the definition of the "year" as amended by Finance Ordinance of 1959 which governs the definition of the "year" in section 28 also, nor the definition of term "year" was subject‑matter of interpretation before their Lordships. The proviso to section 28 is not an independent provision but has to be read subject to the defini tion clause where the year beginning on the first day of April 1959, and ending on the 30th day of June 1960 has been defined as a financial year. No doubt the proviso to section 28 has extended the period of limitation by 3 months in respect of the assessment year 1954‑55 but a similar extension for subsequent year was not necessary because by virtue of the proviso to section 2(20) the financial year 1959‑60 ended on the 30th day of June 1960, instead of 30th day of March 1960. Therefore, the next financial year became the year beginning on the first day of July 1960, and ending on the 30th day of June 1961. In the case of the financial year 1959‑60 it will be deemed to have been extended to a year of 15 months ending on the 30th of June 1960. On a careful perusal of the two provisos, already referred to, we are of the opinion, that the Legislature has expressed in clear terms their intention that the year of 1959‑60 will be a year of 15 months. The "year" under section 28 of the Sales Tax Act on the simple construction of the language is "financial year". The limitation, therefore, stands automatically extended by three months and as such the assessment of the respondent for the charge year 1957‑58 made on the 11th of April 1962, was within the period of four years. We answer the question accordingly but in view of the complicated question of law we leave the parties to bear their own costs. S. .Q. Reference answered in the negative.