M/S NARESH KUMAR GUPTAversusSTATE OF PUNJAB & ANOTHER

                  [2025] 5 S.C.R. 718 : 2025 INSC 719

                        M/s Naresh Kumar Gupta
                                    v.
                        State of Punjab & Another
                       (Civil Appeal No. 4033 of 2025)
                                  01 May 2025
       [B.V. Nagarathna* and Satish Chandra Sharma, JJ.]


                            Issue for Consideration
       Whether the amendment to s.29 of the Punjab Value Added Tax
       Act, 2005 (PVAT Act) by the Punjab Value Added Tax Act, 2013
       is constitutionally valid or not.

                                   Headnotes†
       Punjab Value Added Tax Act, 2005 – Amendment to s.29 –
       Punjab Value Added Tax Act, 2013 – Constitutional validity of
       amendment to s.29 of Punjab Value Added Tax Act, 2005 by
       the Punjab Value Added Tax Act, 2013 – High Court held that
       the amendment cannot be declared as invalid:
       Held: On a perusal of the un-amended s.29 of the Act and its amended
       version, it is evident that under the un-amended provision, the initial
       limitation period of three years could be extended to six years by
       the Commissioner by an order in writing where circumstances so
       warranted – The order of the Commissioner extending the limitation
       period to six years had been a subject matter of litigation before the
       High Court in several cases, which had resulted in huge revenue
       loss – It was to obviate such consequences that the Legislature of
       the State of Punjab thought it fit to amend s.29 of the PVAT Act –
       The High Court, vide impugned judgment found this amendment as
       not so unreasonable or excessive as to warrant it being declared
       invalid – It held that the proviso itself establishes that the opening
       part of the amended s.29(4) is retrospective and that to construe
       the opening part of s.29(4) as being prospective would render the
       proviso and Explanation (1) thereto otiose – It noted that legislature
       has the power to enact the laws, including laws dealing with taxation,
       with retrospective effect – Further, the legislature giving its own
       meaning or interpretation to a provision through a legislative fiat


* Author
[2025] 5 S.C.R.                                                             719

         M/s Naresh Kumar Gupta v. State of Punjab & Another


     does not encroach upon the Courts’ domain to interpret the laws
     enacted by it – That the legislature could have done so originally or
     subsequently by an amendment which could be both prospective
     and retrospective – It held that sub-section (10A) to s.29 of the
     PVAT Act must be read along with the rest of the Section and if read
     so, it would be clear that the defect in the actions i.e. the manner
     in which the proviso to the unamended s.29(4) was implemented
     is removed – The High Court also observed that the clarification
     provided in Explanation 2 to the amended s.29 of the PVAT Act does
     not amount to a declaration that the judgments passed by it based
     on the unamended s.29 of the aforesaid Act were wrong – It held
     that the legislature has simply removed the basis on which those
     judgments were rendered and that the legislature was well within its
     powers to do so – To the question whether by an amendment the
     Legislature could extend the period for assessment even though
     the original period for assessment had expired, the High Court
     relied on the judgment of this Court in Additional Commissioner
     (Legal) & Another v. Jyoti Traders & Another, to answer in the
     affirmative – There is no reason to interfere with the judgment of
     the High Court. [Paras 9, 10, 11, 12]

     Precedent – Binding effect of the judgment in State of Punjab v.
     Nokia India Pvt. Ltd. (Nokia):
     Held: For the sake of clarity, this Court observes that since the
     judgment of this Court in Nokia is now being restricted to the Act
     applicable in State of Punjab and the Act applicable in the Union
     of Territory of Chandigarh, the said judgment may not be a binding
     precedent insofar as other States’ enactments are concerned – In
     other words, liberty is reserved to any aggrieved party to contend
     that the judgment of this Court in Nokia is not applicable and
     therefore could be distinguished. [Para 17(c)]

                              Case Law Cited
     Additional Commissioner (Legal) & Another v. Jyoti Traders &
     Another [1998] 3 Suppl. SCR 67 : (1999) 2 SCC 77 – referred to.
     State of Punjab v. Nokia India Pvt. Ltd. [2014] 11 SCR 331 : (2014)
     16 SCC 410 – clarified.
     Amrit Banaspati Company Ltd. v. State of Punjab & Others, Civil
     Writ Petition No. 21811 of 2014 decided by the High Court
720                                                          [2025] 5 S.C.R.

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       of Punjab & Haryana; M/s. Samsung (India) Electronics Pvt.
       Ltd. v. Commissioner of Commercial Tax, UP, STRP NO. 479/2017
       decided by the Allahabad High Court; State of Karnataka &
       Another v. Intex Technologies India Ltd., STRP NO.8/2022 decided
       by the Karnataka High Court – referred to.

                                 List of Acts
       Punjab Value Added Tax Act, 2005; Punjab Value Added Tax Act,
       2013.

                              List of Keywords
       Constitutional validity; Amendment to section 29 of the Punjab
       Value Added Tax Act, 2005; Prospective; Retrospective operation;
       Principles of natural justice; Extend the period of reassessment;
       Bar of limitation.

                             Case Arising From
       CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4033 of 2025

       From the Judgment and Order dated 07.08.2015 of the High Court
       of Punjab & Haryana at Chandigarh in CWP No. 938 of 2015

       With

       Civil Appeal Nos. 4034, 4035, 4036, 4037, 4038, 4039, 4040,
       4041, 4042, 4043, 4044, 4045, 4046, 4048, 4049, 4050 and 4051
       of 2025, Transferred Case (C) Nos. 41, 42, 43, and 44 of 2023,
       Transferred Case (C) Nos. 7, 8, 9 and 37 of 2024

                           Appearances for Parties
       By Courts Motion.
       Advs. for the Appellant:
       Sujit Ghosh, Arvind Datar, Sujit Ghosh, Sr. Advs., Ms. Manju
       Jetley, Sanchar Anand, Dr. Sushil Balwada, Aman Kumar Thakur,
       Abhishek Bhardwaj, Aman Bhardwaj, Sandeep Goyal, Pawanshree
       Agrawal, Ms. Aakriti Gupta, Nitin Bansal, Ms. Akriti Goel, Ms.
       Aakriti Goel, Puneet Agarwal, Ms. Mansi Khurana, Chetan Shukla,
       Santosh Kumar, Ms. Mannat Waraich, Ashray Behura, Ms. Ananya
       Goswami, Ms. Arya Mittal.
[2025] 5 S.C.R.                                                        721

         M/s Naresh Kumar Gupta v. State of Punjab & Another


     Advs. for the Respondents:
     Archana Pathak Dave, A.S.G., Shadan Farasat, AAG/Sr. Adv.,
     Talha Abdul Rehman, D.A.G., Ajay Pal, Varun Chugh, Krishna
     Kant Dubey, Bhuvan Kapoor, Shreekant Neelappa Terdal, Sahil
     Bhalaik, Tushar Giri, Siddharth Anil Khanna, Ritik Arora, Shivam
     Mishra, Gouttam Polanki, Gowtham Polanki, Sewa Singh, Ms.
     Nupur Kumar, Aman Naqvi.

                Judgment / Order of the Supreme Court

                               Judgment

     Nagarathna, J.

     CIVIL APPEAL NO.4033/2025, CIVIL APPEAL NO.4035/2025,
     CIVIL APPEAL NO.4037/2025, CIVIL APPEAL NO.4039/2025,
     CIVIL APPEAL NO.4034/2025, CIVIL APPEAL NO.4038/2025,
     CIVIL APPEAL NO.4036/2025, CIVIL APPEAL NO.4045/2025,
     CIVIL APPEAL NO.4043/2025, CIVIL APPEAL NO.4040/2025,
     CIVIL APPEAL NO.4041/2025, CIVIL APPEAL NO.4042/2025,
     CIVIL APPEAL NO.4046/2025, CIVIL APPEAL NO.4048/2025,
     CIVIL APPEAL NO.4049/2025, CIVIL APPEAL NO.4050/2025,
     CIVIL APPEAL NO.4051/2025:

1.   The above appeals are disposed of in terms of the following common
     judgment.
2.   All the impugned orders in these Civil Appeals followed the result
     in Amrit Banaspati Company Ltd. vs. State of Punjab & Others,
     Civil Writ Petition No.21811 of 2014 (“Amrit Banaspati”) which
     was disposed of by a separate order and judgment dated 07.08.2015
     by the High Court of Punjab & Haryana at Chandigarh. An appeal
     against the above judgment before this Court by the aforesaid
     assessee was dismissed as withdrawn vide order of this Court dated
     04.05.2016 in SLP (Civil) No.26731 of 2015.
3.   The common question of law arising in these appeals is whether the
     amendment to section 29 of the Punjab Value Added Tax Act, 2005
     [henceforth “PVAT Act”] by the Punjab Value Added Tax Act, 2013
     is constitutionally valid or not. For the sake of immediate reference,
     Section 29 of the PVAT Act, before and after it was amended, is
     extracted herewith:
722                                                                    [2025] 5 S.C.R.

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              Section 29(4) [before the                 Section 29(4) [after the
             amendment on 15.11.2013]                  amendment on 15.11.2013]
       29. Assessment of tax.                    29. Assessment of tax.
       ***                                       ***
       (4) An assessment under sub section       (4) An assessment under subsection
       (2) or sub-section (3) may be made        (2) or sub-section (3), may be made
       within three years, after the date when   within six years after the date when
       the annual statement was filed or due     the annual statement was filed or due
       to be filed whichever is later.           to be filed whichever is later.
        Provided that where circumstances        Provided that the assessment under
       so warrant, the Commissioner may by       sub section (2) or sub-section (3), in
       an order in writing, allow assessment     respect of which annual statement
       of a taxable person or a registered       for the assessment year 2006-07 has
       person after three years, but not later   already been filed, can be made till the
       than six years, from the date, when       20th day of November, 2014.
       annual statement was filed or due to
                                                 Explanations:
       be filed by such person, whichever
       is later.                                 (1) The limitation period of six years
                                                 for an assessment under sub-section
                                                 (2) or sub-section (3), shall also apply
                                                 to those cases in which the aforesaid
                                                 period of six years has yet not expired.
                                                 (2 ) I t i s cl ari fi ed that pri or to
                                                 commencement of the Punjab Value
                                                 Added Tax (Second Amendment)
                                                 Act, 2013, the Commissioner was not
                                                 required to issue any notice to the
                                                 concerned person before extending
                                                 the limitation period of assessment.
                                                 29(10A)
                                                 Notwithstanding anything to the
                                                 contrary contained in any judgment,
                                                 decree or order of any Court, tribunal
                                                 or other authority, an order passed by
                                                 the Commissioner under subsection
                                                 (4) prior to commencement of the
                                                 Punjab Value Added Tax (Second
                                                 Amendment) Act, 2013, shall not be
                                                 invalid on the ground of prior service
                                                 of notice or communication of such
                                                 order to the concerned person.
[2025] 5 S.C.R.                                                           723

         M/s Naresh Kumar Gupta v. State of Punjab & Another


4.   The aforesaid amendments to Section 29 of PVAT Act were
     challenged by the appellants herein before the Punjab and Haryana
     High Court on the grounds that i) they were prospective; and if not,
     then ii) they reverse/over-rule several judgments of the High Court;
     iii) Explanation (2) is contrary to principles of natural justice; iv) they
     violate Articles 14 and 19 of the Constitution; v) they extend the period
     of reassessment even where the original period for assessment has
     expired; and vi) the proviso to the amended section 29(4) is contrary
     to the main section.
5.   The High Court, vide the judgment dated 07.08.2015 in Amrit
     Banaspati, observed that the amendment cannot by any stretch of
     imagination be held to be so unreasonable or excessive as to warrant
     it being declared invalid. On a survey of cases, it highlighted that
     the principle was that the proceedings which have attained finality
     under the existing law due to a bar of limitation cannot be held to
     be open for revival unless the amended provision is clearly given
     a retrospective operation so as to allow unsettling of proceedings,
     which had already been concluded and attained finality. That the
     purpose and effect of the entire amendment was to obviate the
     consequences of the proviso to the unamended section. Following
     the above judgment, the High Court dismissed the writ petitions filed
     by the appellants herein.
6.   Aggrieved by the impugned orders of the High Court, the appellants
     have approached this Court by preferring these appeals.
7.   We have heard learned senior counsel for the appellants and learned
     counsel for the State, learned senior counsel and learned counsel
     for the respective appellants and learned A.A.G. for the respondent-
     State and perused the material on record.
8.   The statement of objects and reasons for bringing forth an amendment
     to section 29 of the PVAT Act, 2005 by the Punjab Value Added Tax
     Act, 2013 is extracted as follows:
           “Amendment in Section 29 of the Punjab VAT Act, 2005:
           Due to the provision of self-assessment in Punjab
           Value Added Tax Act, 2005, cases are selected by the
           Departmental Officers for the assessment on the basis of
           certain risk parameters or in which revenue is involved.
           According to Section 29(4), the assessment of a case has
724                                                           [2025] 5 S.C.R.

                           Supreme Court Reports


            to be framed within 3 years of filing the Annual Statement.
            It is pertinent to mention here that due to heavy work
            load and shortage of staff in the Department, by the time
            the Designated Officer detects a tax due in a particular
            case, the limitation period of 3 years is near to end.
            The Commissioner has the power to extend the period
            of assessment upto 6 years. By exercising this power,
            limitation periods were extended by the Commissioner
            in respect of various years which led to a lot of litigation.
            The Hon’ble High Court and the Hon’ble VAT Tribunal
            have quashed many such extension orders on technical
            ground of no prior service of notice to the concerned person
            before passing an order of such extension of limitation
            period and not passing individual orders, resulting in a
            huge revenue loss. Therefore, in order to safeguard the
            Revenue on account of cases becoming time barred and
            to undo the effect of the judgment dated 01.09.2009 of
            the Hon’ble High Court in case of A.B. Sugars Ltd. it has
            become necessary and expedient to amend sub-Section
            4 of Section 29 and insert sub section (10-A) in Section
            29 of the Punjab VAT Act, 2005.”
9.     On a perusal of the un-amended Section 29 of the Act and its amended
       version, it is evident that under the un-amended provision, the initial
       limitation period of three years could be extended to six years by
       the Commissioner by an order in writing where circumstances so
       warranted. According to the legislature, as expressed in the Statement
       of Objects and Reasons, firstly, by the time a Designated Officer
       detected a tax due in a particular case, the limitation period of three
       years would near its end. Secondly, the order of the Commissioner
       extending the limitation period to six years had been a subject matter
       of litigation before the High Court in several cases, which had resulted
       in huge revenue loss. It was to obviate such consequences that the
       Legislature of the State of Punjab thought it fit to amend Section 29
       of the PVAT Act.
10. The High Court, vide impugned judgment dated 07.08.2015, found
    this amendment as not so unreasonable or excessive as to warrant
    it being declared invalid. It held that the proviso itself establishes
    that the opening part of the amended Section 29(4) is retrospective
    and that to construe the opening part of Section 29(4) as being
[2025] 5 S.C.R.                                                      725

         M/s Naresh Kumar Gupta v. State of Punjab & Another


     prospective would render the proviso and Explanation (1) thereto
     otiose. It noted that a legislature has the power to enact the laws,
     including laws dealing with taxation, with retrospective effect.
11. Further, the High Court held that the legislature giving its own
    meaning or interpretation to a provision through a legislative fiat
    does not encroach upon the Courts’ domain to interpret the laws
    enacted by it. That the legislature could have done so originally or
    subsequently by an amendment which could be both prospective
    and retrospective. It held that sub-section (10A) to Section 29 of
    the PVAT Act must be read along with the rest of the Section and
    if read so, it would be clear that the defect in the actions i.e. the
    manner in which the proviso to the unamended Section 29(4) was
    implemented is removed.
12. The High Court also observed that the clarification provided in
    Explanation 2 to the amended Section 29 of the PVAT Act does not
    amount to a declaration that the judgments passed by it based on
    the unamended Section 29 of the aforesaid Act were wrong. It held
    that the legislature has simply removed the basis on which those
    judgments were rendered and that the legislature was well within
    its powers to do so.
13. To the question whether by an amendment the Legislature could
    extend the period for assessment even though the original period for
    assessment had expired, the High Court relied on the judgment of
    this Court in Additional Commissioner (Legal) & Another v. Jyoti
    Traders & Another, (1999) 2 SCC 77, to answer in the affirmative.
    In that case, the impugned provision before amendment provided
    for a limitation of four years and the amended provision increased
    the same to eight years. The assessment year in that case was
    1985-86 and the amendment came into force in 1991. Hence, the
    four-year period originally prescribed would have expired prior to the
    date of the amendment. Despite the same, this Court held that the
    amendment was applicable to the assessees.
14. For the above reasons, we hence do not find any reason to interfere
    with the impugned orders of the High Court. In the circumstance,
    the Civil Appeals stand dismissed. We reiterate the liberty reserved
    by the High Courts in Amrit Banaspati.
15. However, liberty is reserved to the appellant/assessee(s) to avail
    the appellate remedy if so advised within a period of three months
726                                                         [2025] 5 S.C.R.

                           Supreme Court Reports


       from today. If such an appellate remedy is availed by the appellants
       herein, the State as well as the Appellate Authorities shall not raise
       the issue of limitation. It is needless to observe that the appeals so
       filed shall be disposed of in accordance with law.

       CIVIL APPEAL NO.4044 OF 2025, TRANSFERRED CASE (C) NO.7
       OF 2024, TRANSFERRED CASE (C) NO.8 OF 2024, TRANSFERRED
       CASE (C) NO.9 OF 2024, TRANSFERRED CASE (C) NO.37 OF
       2024, TRANSFERRED CASE (C) NO.41 OF 2023, TRANSFERRED
       CASE (C) NO.42 OF 2023, TRANSFERRED CASE (C) NO.43 OF
       2023, AND, TRANSFERRED CASE (C) NO.44 OF 2023:
16. We have heard the arguments advanced at the bar by learned
    senior counsel for the appellant-assessee(s) and learned senior
    counsel and learned A.A.G. appearing for the State of Punjab and
    learned counsel for Union Territory of Chandigarh at length. Bearing
    in mind the controversy in these cases arising from State of Punjab
    and Union Territory of Chandigarh only are concerned, we find
    that the judgment of this Court in State of Punjab vs. Nokia India
    Pvt. Ltd., (2014) 16 SCC 410 (“Nokia”), is heavily relied upon by
    the learned Additional Advocate General (AAG) appearing for the
    State of Punjab and learned ASG appearing for Union Territory of
    Chandigarh. However, learned senior counsel appearing for the
    appellants have sought to distinguish the ratio of the said judgment
    of this Court in Nokia, insofar as the matters pending before this
    Court are concerned, by placing reliance on the judgment of the
    Allahabad High Court in M/s. Samsung (India) Electronics Pvt.
    Ltd. vs. Commissioner of Commercial Tax, UP bearing STRP
    NO. 479/2017 and connected matters disposed of on 18.01.2018,
    which judgment we have affirmed by our order dated 20.02.2025, as
    well as the judgment passed by Karnataka High Court in State of
    Karnataka & Another vs. Intex Technologies India Ltd. bearing
    STRP NO.8/2022 disposed of on 10.02.2023.
17. We, hence, propose to make the following order in these cases:
       (a)   Insofar as the State of Punjab as well as the Union Territory of
             Chandigarh are concerned, the judgment of this Court in Nokia
             is in favour of the Revenue and bearing in mind the quantum
             of taxes that have to be paid by the appellant-assessee(s),
             we do not intend to consider the correctness, or otherwise of
[2025] 5 S.C.R.                                                           727

           M/s Naresh Kumar Gupta v. State of Punjab & Another


            the said judgment of this Court as sought to be persuaded by
            learned senior counsel Sri Datar appearing for the appellants.
            This is for the pertinent reason that the period under controversy
            is related to only the Assessment Years from 2005-2006 to
            2011-2012 insofar as the State of Punjab is concerned and
            Assessment Years from 2009-2010 to 2015-2016 insofar as
            the Union Territory of Chandigarh is concerned.
     (b)    Since we are not going into the correctness or otherwise of
            the judgment of this Court in Nokia, we direct the appellants
            herein to pay the outstanding tax dues. The said payment shall
            be restricted only to the principal amount of tax dues and shall
            not include interest and penalty therein insofar as these cases
            are concerned.
     (c)    For the sake of clarity, we observe that since the judgment of this
            Court in Nokia is now being restricted to the Act applicable in
            State of Punjab and the Act applicable in the Union of Territory of
            Chandigarh, the said judgment may not be a binding precedent
            insofar as other States’ enactments are concerned. In other
            words, liberty is reserved to any aggrieved party to contend
            that the judgment of this Court in Nokia is not applicable and
            therefore could be distinguished.
            The aforesaid directions have been issued bearing in mind the
            fact that from the year 2013 onwards, in the State of Punjab
            there have been amendments made to the State Acts.
     (d)    Consequently, the Civil Appeal and the Transferred Cases filed
            by the assessees as against the State of Punjab and the Union
            Territory of Chandigarh are disposed of in the aforesaid terms,
            and only the principal amount of outstanding tax dues shall be
            paid by the appellant-assessee(s) on or before 30.06.2025.
     (e)    Insofar as the matters which have been disposed of by this
            Court and also in the cases which are pending before the
            Punjab and Haryana High Court or before any other appellate
            or Assessing Authority insofar as the State of Punjab and Union
            Territory of Chandigarh are concerned, the aforesaid order is
            also subject to the result of the cases pending consideration
            in Civil Appeal No.4033 of 2025 and connected cases which
            are pending before this Court.
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       (f)   Insofar as the transferred cases arising from State of Andhra
             Pradesh are concerned, since the provision to be considered
             may be distinguished and the judgment of this Court in Nokia
             may not be applicable, we reserve liberty to the appellants to
             contend that the judgment of this Court in Nokia may not be
             applicable to their cases by placing reliance on the judgments
             of the Allahabad High Court as well as the judgment of the
             Karnataka High Court referred to above, as affirmed by this
             Court, and bearing in mind the provisions to be considered
             under the applicable Acts and Rules of general interpretation,
             if applicable, in the State of Andhra Pradesh, and to raise any
             other contention that is available to the parties, in accordance
             with law.
       (g)   Insofar as the Transferred Cases arising from the High Court
             of Andhra Pradesh at Amravati are concerned, those cases
             are re-transferred and restored on the file of the High Court
             for being considered and disposed of in accordance with law
             including remanding the matters to the concerned Revenue
             officers or reserving liberty to the appellants herein to avail the
             appellate remedy.
       (h)   Alternatively, the Andhra Pradesh High Court may hear the
             matters on the issues which are raised by the assessees bearing
             in mind the observations made above. In case any aggrieved
             party before the High Court intends to avail the appellate remedy
             (alternate remedy), the issue of limitation shall not be raised by
             the appellate authority or by the respondent-State subject to
             the further orders to be passed by the said High Court.
       (i)   We again reiterate that we have made the aforesaid order
             having regard to the fact that we have restricted the ramification
             and implication of the judgment of this Court in Nokia to the
             relevant assessment years in the State of Punjab and Union
             Territory of Chandigarh only.
       (j)   Consequently, the binding effect of the said dictum insofar
             as other States’ enactments are concerned may not arise,
             particularly if the provisions are different from those under the
             Punjab Act and the Act applicable in the Union Territory of
             Chandigarh.
[2025] 5 S.C.R.                                                            729

            M/s Naresh Kumar Gupta v. State of Punjab & Another


     (k)     It is needless to observe that liberty is reserved to any aggrieved
             party to contend that the judgment passed by this Court in
             Nokia is not applicable and is distinguishable in any other State.
             Insofar as the cases arising from Andhra Pradesh are concerned,
             liberty is reserved to the State/Revenue to place reliance on
             the judgment of this Court in Nokia.
     (l)     The aforesaid appeal and the transferred cases are disposed
             of in the aforesaid terms.
     (m) The Registry of this Court is directed to intimate this order to the
         Registry of the High Court of Andhra Pradesh and also to take
         steps for smooth transfer of these cases so as to be restored
         on the file of the Andhra Pradesh High Court as expeditiously
         as possible.
     (n)     Having regard to the long pendency of the matters before the
             High Court and the subsequent restoration of the cases before
             the High Court of Andhra Pradesh, we request the High Court
             to expedite the hearing and disposal of these cases.
             Pending application(s), if any, shall stand disposed of.

     Result of the case: Appeals and Transferred cases disposed of.




     †
         Headnotes prepared by: Ankit Gyan