The petitioner seeks to quash the recovery notice issued by the third respondent dated 28.08.1996 and further direct the respondents to give effect to the judgment of the Supreme Court in the case of Vikas Sales Corporation v. Commissioner of Commercial Taxes, (1996) 102 STC 106 with effect from 01.05.1996.
2. The petitioner is a manufacturer and exporter of leather and an assessee on the file of the third respondent. The petitioner's assessment for the assessment years 1989-90 to 1994-95 were finalised by the third respondent resulting in the balance of arrears of Rs.70,40,425/- due from it. Out of the above said arrears, the petitioner paid a sum of Rs.1,22,663/- towards tax involved of sales of other goods purchased from unregistered dealers and also sales of assets. The balance arrears amounting to Rs.69,17,861/- represented the premium received on the sale of REP licence as the petitioner failed to pay the arrears. The third respondent issued recovery notice, which is challenged in this writ petition.
3. It could be seen from the records that the arrears accrued on account of separate assessment/revision of assessment passed by the third respondent for each assessment year from 1989-90 to 1994-95. The said assessment or revision of assessment has not been challenged. However, on issuance of notice of recovery of arrears, this writ petition is filed on the ground that the issue of taxability of the transfer value of REP licence under the Tamil Nadu General Sales Tax Act, has been settled by the Supreme Court in Vikas Sales Corporation v. Commissioner of Commercial Taxes, (1996) 102 STC 106. So, that would be effective from 01.05.1996 only. A Division Bench of this Court in P.S. Apparels v. DCTO, 94 STC 139, upheld the levy of tax on premium received on the sale of REP licence. It is pertinent to note that the petitioner was a party to the said judgment as a petitioner in W.P. No.7436 of 1992. In that judgment, the Division Bench has held that the respective assessing authority shall be at liberty to proceed further in making assessment where the proceedings have not been finalised and where the assessment has already been completed, the assessee could avail all statutory remedies before the appellate or revisional authorities by counting the statutory period of limitation as commencing from the date of the judgment, i.e., 04.04.1994. The petitioner did not pursue such statutory remedies, but has filed the present writ petition. Yet another factor to be noted is that the petitioner approached Government of Tamil Nadu to permit it to pay the arrears in 12 monthly instalments and obtained an order to that effect in G.O. (D) No.507 CT Department dated 11.12.1997, but failed to pay even a single instalment. In the above said factual circumstances, the petitioner filed the writ petition against the recovery notice contending that the taxability of the value of the transfer of exim scrips should be considered on and from the date on which the Supreme Court confirmed the order of P.S. Apparels's case in Vikas Sales Corporation v. Commissioner of Commercial Taxes, (1996) 102 STC 106.
4. The crux of the contention in this case is that only on and from the date on which the judgment was rendered by the Supreme Court in Vikas Sales Corporation v. Commissioner of Commercial Taxes, (1996) 102 STC 106 levy can be made. The judgment of the Supreme Court is a retrospective judgment. I am not able to concur with the contention of the appellant as it is well settled that the decision of the Supreme Court being declaration of the true and correct position of law became applicable to all the transactions and proceedings which have not become final and concluded. The rendering of a judgment by the Supreme Court is not the same as enactment of a statute. A decision of the Supreme Court does not make the law, but merely explains and puts in proper perspective the true position and effect of the law. The true position of law so declared exists from the very date of making the law and not from the date of declaration by the Supreme Court. When a legislature enacts a statute, it creates rights and obligations and therefore its operation can be prospective or retrospective depending upon the provisions of the statute. But when the Supreme Court gives a decision declaring the law, it does not create rights and obligations, but merely identifies and declares the pre-existing rights or obligations and declares true or correct position of law. Thus, it is the cardinal principle of construction for every statute is presumed to be prospective unless it is expressly or by necessary implication made retrospective in operation and every decision of the Supreme Court declaring the law as retrospective unless it is expressly by necessary implication restricted to prospective operation. (vide Constitution Bench Judgment of the Supreme Court in the case of Sourabh Chaudri v. Union of India, 2004 (5) SCC 618.
5. In addition to that, the Division Bench while disposing of the P.S. Apparels case has given a categorical direction both to the assessing officer and to the assessee as stated supra. Indisputably, the petitioner has not availed the statutory remedy within the statutory period of limitation and has thus allowed the assessment to become final. In the said circumstances, the writ petition fails. The writ petition is dismissed as devoid of merits. No costs.
mf To
1. The Secretary to Government, State of Tamilnadu Commercial Taxes and Religious Endowments Department, Fort St. George, Chenna 9.
2. The Special Commissioner and Commissioner of Commercial Taxes, Chepauk, Chennai 5.
3. The Commercial Tax Officer, Perambur II Assessment Circle, Chennai 11