STATE OF PUNJAB & ORS.versusM/S. SHREYANS INDUS LTD. ETC.

                            [2016] I S.C.R. 896



A                         STATE OF PUNJAB & ORS.
                                     v.
                   M/S. SHREYANS INDUS LTD. ETC.
                   (Civil Appeal Nos. 2506-25 I I of2016)
B                            MARCH 04, 20 I 6
    [T.S. THAKUR, CJI., A.K. SIKRI AND R. BANUMATHI, JJ.)
          Punjab General Sales Tax Act, 19./8: ss. 11 (3), 11 (8) - Power
    of Commissioner to extend time limit for passing order of assessment
    after the expiry of /imitation period - Held: When the period of
c
    limitation prescribed in the Act for passing the assessment order
    expires, the Commissioner is debarred from exercising his powers
    u/sub-section (1 OJ of s.11.
            Dismissing the appeals, the Court
D       HELD: 1. A mere reading of Section 11 would reflect that
  wherever return is filed by the assessee, assessment is to be
  made within a period of three years from the last date prescribed
  for furnishing the return in respect of such period. Though
  provisions of the Punjab Act are couched in different language
  from Karnataka Act or Gujarat Act, the essence of these
E
  provisions is same. Insofar as scheme of Punjab Act is concerned,
  the assessment order is to be normally passed within a period of
  three years. At the same time, power is given to the
  Commissioner under Section 11(10) of the Act to extend the said
  period of three years. Once such an extension is given, the order
F is passed even beyond the period of three years. Significantly,
  no upper limit is fixed while giving such extension which means
  that the power can be exercised for extending the period for any
  length of time, subject however to the condition that the
  Commissioner is bound to record the reasons justifying such an
  extension. Obviously, when the Commissioner passes such an
G order and give reasons, not only he would have to justify his action
  of extending time but also the period by which the time is
  extended. In the Karnataka Legislation, the power is of
  'deferment'. In that Legislation as well, the Assessment Order
  is to be passed within three years as sub-section (5) of Section
H
                                  896
       STATE OF PUNJAB & ORS. v. M/S. SHREYANS INDUS                    897
                      LTD. ETC.

12 of Karnataka Sales Tax Act stipulates that no assessment shall       A
be made after a period of three years from the date on which the
return under sub-section (1) of that order is submitted by a dealer
subject to two provisos mentioned therein. Sub-section (6) of
Section 12 mentions as to how the period of limitation is to be
computed. Clause (b) of sub-section (6) indicates that Joint
                                                                        B
Commissioner, in appropriate cases, may pass an order for
deferment of Assessment Order to be passed by the Assessing
Authority and once such an order is passed, that period has not
to be counted while computing the period of limitation.
Significantly, this provision also mandates the Joint Commissioner
to record reasons for deferring the orders of assessment. In            c
essence, therefore, the purport and objective behind the
provisions in Punjab Act as well as in Karnataka Act remains. the
same. By making any order of deferment under sub-section (6)
of Section 12 of Karnataka Sales Tax Act, the Joint Commissioner
is, in fact, achieving the same purpose of granting more time to
                                                                        D
the Assessing Officer to pass the Assessment Order. Same is
the purpose behind sub-section (11) of Section 10 of the Punjab
Act. In view thereof, it may not be appropriate to go into the
nuanced distinction between "deferment" and "extension" as
per the definitions contained Black's Law Dictionary in the given
situation, which is dealt with in the instant appeals. In the context   E
of the Punjab Act, it can be said that extension of time for
assessment has the effect of enlarging the period of limitation
and, therefore, once the period of limitation expires, the immunity
against being subject to assessment sets in and the right to make
assessment gets extinguished. Therefore, there would be no
                                                                        F
question of extending the time for assessment when the
assessment has already become time barred. A valuable right
has also accrued in favour of the assessee when the period of
limitation expires. [Paras 9, 20, 21, 24](903-C; 909-D-G;
910-B-E; _911-C-D]
      Bharat Heavy Electricals Ltd. v. Assistant Commissioner           G
      of Commercial Taxes (INT-1),;South Zone, Bangalore
      and Ors. (2006) 143 STC 10; ]aver Jivan Mehta v.
      Assistant Commissioner of Sales Tax (Appeal) (1998)
      111 STC 199; D. V. Paul v. Manisha Lalwani (2010) 8
      SCC 546; Commissioner of Income Tax, Jullundur v.                 H
898                  SUPREME COURT REPORTS                  [2016] I S.C.R.


A          Ajanta Electricals (1994) 5 SCC 182; Hindustan
           Steelworks Construction Ltd. v. C. Rajasekhar Rao
           (1987) 4 SCC 93: 1987 (3) SCR 653 - referred to.
                              Case Law Reference
      (2006) 143 STC 10                     referred to.      Para7
B
      (1998) 111 STC 199                    referred to.      Para7
      (2010) s sec 546                      referred to.      Para 12
      (1994) s sec 182                      referred to.      Para 13
      1987 (3) SCR 653                      referred to.      Para 14
c
            CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2506-
      2511 of2016
            From the Judgment and Order dated 26.09.2008 of the High Court
      of Punjab & Haryana at Chandigarh in VATP Nos. 16/2008, 19/2008,
 D    20/2008,21/2008,22/2008 and25/2008
                                         WITH
            C.A. No. 2512 of2016
            C.A. No. 2513-2514 of2016
 E          C. A. No. 2515 of2016
            C.A. No. 2516-2517 of2016
            C. A. No. 2518-2519 of2016
            C. A. No. 2520 of 2016
 F          C. A. No. 2521 of2016
            A. K. Ganguli, Nikhil Nayyar, Kuldip Singh, Jagjit Singh Chhabra,
      Sandeep Goyal, Pawan ShreeAgrawal, Rishab Single, Jas Karan Singh
      (for Mis Suresh A. Shroff & Co.), Atishi Dipankar, Annam D. N. Rao,
      Annam Venkatesh, Sudipto Sircar, Ankita Chadha, M. P. Devanath and
 G    Abhishek Anand for the appearing parties.
            The Judgment of the Court was delivered by
            A.K. SIKRI, J. l. Leave granted.
            2. In these appeals, the judgment which is impugned is passed by
 H
         STATE OF PUNJAB & ORS. v. M/S. SHREYANS INDUS                           899
                  LTD. ETC. fA.K. SIKRI, J.l

 the High Court of Punjab & Haryana. The issue involved in these appeals         A
 is identical which pertains to the interpretation that is to be accorded to
 sub-section (10) of Section II of Punjab General Sales Tax Act, I948
 (hereinafter referred to as the "Act"). It is for this reason that all these
 appeals were heard together and can conveniently be disposed of by
·one common judgment. Since SLP (C) Nos. 21712-21717 of2009 was
                                                                                 B
 taken as the lead case, for understanding the nature of !is that is involved,
 the factual narration can be addressed from the said appeal.
        3. In these appeals, we are concerned with Assessment Years
 2000-01, 2001-02, 2002-03 and 2003-04. Obviously, assessment in
 respect of these Assessment Years was to be made under the said Act.
 The .assessee had filed quarterly returns in respect of the aforesaid           c
 Assessment Years. In terms of Section 11(3) of the Act, time-limit for
 completing the assessment provided therein is three years from the end
 of the year. Accordingly, assessments were to be made by 3O'h Apri 1,
 2004 for the Assessment Year 2000-01, 30'h April, 2005 for the
 Assessment Year 2001-02, 30"' April, 2006 for the Assessment Year               D
 2002-03 and 30"' April, 2007 for the Assessment Year 2003-04. It is an
 admitted case that no assessment was made in respect of any of these
 Assessment Years by the aforesaid stipulated dates.
        4. The Assessing Officer, however, sent notices to the respondent-
  assessee in Form ST-XIV for the aforesaid Assessment Years, i.e., after        E
  the expiry of three years. The assessee took an objection that. these
  notices were sent beyond the period of assessment and, therefore, it
  was Pot permissible for the Assessing Officer to issue notice after the
. expiry of three years and carry on with the assessment proceedings.
           5. We may point out that under Section 11(10) of the Act, the         F
  Commissioner is empowered to extend the period of three years for
  passing the order of assessment for such further period as he may deem
  fit, after recording in writing the reasons for extending such period. When
  the objection was taken by the assessee that the notices were time barred,
. the Excise and Taxation Commissioner, Patiala passed orders dated
  August 17, 2007 granting extension of time. Reason given for exteRsion         G
  of time was that the case of the assessee for the year 1999-2000 was
. pending with the Tribunal. This order of extension was challenged by
  the respondent along with the order ofassessment passed by the Assessing
  Officer. The Tribunal, however, dismissed the appeal of the assessee
  vide its orders September l 3, 2007 holding that since there was a power       H
900                    SUPREME COCRT REPORTS                       [2016] I S.C.R.


A of extension conferred upon the Commissioner under Section 11 (I 0) of
      the Act, the Commissioner was within his powers to extend the period.
      The contention of the assessee was that though there was a power of
      extension, such a power could be exercised only within the limitation
      prescribed. In other words. it was contended that when the normal
      period oflimitation for passing assessment order by the Assessing Officer
B
      was three years, as per Section 11 (3) of the Act, the power to extend
      the period could be exercised within the said period of three years and
      not after the expiry of limitation period. This plea of the assessee was
      rejected by the Tribunal.
             6. The assessee took up the matter further by filing appeals before
c     the High Court. Here, the assessee has succeeded in its submission as
      the High Court of Punjab and Haryana vide impugned judgment dated
      September 26, 2008 has held that once the period of limitation expires,
      the immunity from subjecting itself to the assessment sets in and the
      right to make assessment gets extinguished. Therefore, when the period
D     of limitation prescribed in the Act for passing the assessment order
      expires, thereafter, the Commissioner is debarred from exercising his
      powers under sub-section (I 0) of Section I I of the Act and cannot extend
      the period of limitation for the purposes of assessment. This order is
      assailed by the Revenue in the instant appeals before us.

 E           7. It would also be pertinent to note, at this stage, that while arriving
      at the aforesaid conclusion, the Punjab and Haryana High Court has
      placed heavy reliance upon the view taken by a Division Bench of
      Karnataka High Court in Bharat Heavy Electricals Ltd. v. Assist<mt
      Commissioner ofCommercial Taxes (INT-I), South Zone, Bangalore
      and others' which judgment of Karnataka High Court, in turn, refers to
 F    similar view taken by Gujarat High Court in Javer Jivan Mehta v.
      Assistant Commissioner of Sales Tax (Appeal)'. Thus, three High
      Courts have taken identical view, namely, though power to extend time
      of three years for a further period of passing the assessment is there
      with the Commissioner, the same has to be exercised before the expiry
 G    of normal period of three years and not subsequent there to.
            8. As the submissions of the parties on either side would be better
      understood once the relevant statutory provision is noted, it would be

      '(2006) 143 STC 10
 H    '(1998) 111STC199
        STATE OF PUNJAB & ORS. v. MIS. SHREYANS INDUS                            901
                 LTD. ETC. rA.K. SIKRI, J.l

apposite to reproduce the provisions of Section 11 of the Act, which are         A
as follows:
      "I I .Assessment oftax. - (I) Ifthe Assessing Authority is satisfied
      without requiring the presence of dealer or the production by him
      of any evidence that the returns furnished in respect of any period·
      are correct and complete, he shall pass an order of assessment             B
      on the basis of such returns within a period of three years
      from the last date prescribed for furnished the last return
      in respect of such period.
       (2) If the Assessing Authority is not satisfied without requiring the
       presence of dealer who furnished the returns or production of             c
      ·evidence that the returns furnished in respect of any period are
       correct and c·omplete, he shall serve on such dealer a notice in the
       prescribed manner requiring him, on a date and at place specified
       therein, either to attend in person or to produce or to cause to be
       produced any evidence on which such dealer may rely in support
       of such returns.                                                          D

      (3) On the day specified in the notice or as soon afterwards as
      may be, the Assessing Authority shall, after hearing such evidence
      as the dealer may produce, and such other evidence as the
      Assessing Authority may require on specified points, [pass an
      order of assessment within a period of three years from                    E
      the last date prescribed for furnishing the last return in
      respect of nay period.]
                                '
       (4) If a dealer having furnished returns in respect of a period, fails
       to comply with the terms of notice issued under sub-section (2),
       the Assessing Authority shall, [within a period of three years from       F
       the l •date prescribed for furnishing the last return in respect of
     . such period, pass an order of assessment to the best of his
       judgment.]
       (5) If a dealer does not furnish returns in respect of any period by
       the last date prescribed the •:.sessing authority shall within a period   G
       of five years from the last date prescribed for furnishing the return
       in respect of such period and after giving the dealer a reasonable
       opportunity of being heard, pass an order of assessment to the
       best of his judgment.
                                                                                 H
902             SUPREME COURT REPORTS                    [2016] 1 S.C.R.


A     (6) IF upon information which has come into his possession, the
      Assessing Authority is satisfied that any dealer has been liable to
      pay tax under this Act in respect of any period but has failed to
      apply for registration, the Assessing Authority shall, within five
      years after the expiry of such period, after giving the dealer a
      reasonable opportunity of being heard, proceed to access, to the
B
      best of his judgmentthe amount of tax, ifany, due from the dealer
      in respect of such period and all subsequent periods and in case
      where such dealer has willfully failed to apply for registration, the
      Assessing Authority may direct that the dealer shall pay by way
      of penalty, in addition to the amount so assessed, in addition to the
 c    amount so assessed, a sum not exceeding one and a half times
      that amount.
       (7) The amount ofany tax, penalty or interest payavble under this
       Act shall be paid by the dealer in the manner prescribed, by such
       date as may be specified in the notice issued by the Assessing
 D     Authority for the purpose and the date so specified shall not be
       less than fifteen days and not more than thirty days from the date
       of service of such notice:
       Provided that the Assessing Authority may, with the prior approval
       of the Assistant Excise and Taxation Commissioner, Incharge of
 E     the District extend the date of such payment or allow payment by
       instalments against an adequate security or bank guarantee.
        (8) If the tax assessed under this Act or any instalment thereof is
        not paid b y any dealer within the time specified thereof in the
        notice of assessment or in the order permitting payment in
 F      installments, the Commissioner or any other person appointed to
        assist him under s9b-section ( 1) of Section 3 may, after giving
      . such dealer an opportunity of being heard, impose on him a penalty
        not exceeding in amount the sum due from him.
        (9) Any assessment made under this section shall be without
 G    . prejudice to any penalty imposed under th is Act.
       (10) The Commissioner, may fqr reasons to be recorded in
       writing, extends the period of thfee years, for passing the
       order of assessment for such further period as he may deem
       fit.
 H
        STATE OF PUNJAB & ORS. v. MIS. SHREYANS INDUS                           903
                 LTD. ETC. fA.K. SIKRI, J.]

      (I I) Where the proceedings of assessment are stayed by an order          A
      of any court, the period for which such stay remains in force,
      shall not count towards computing the period of three years
      specified under this section for passing the order of assessment.
      (12) The assessing authority may on his own motion, review any
      assessment order passed by him and such review shall be                   B
      completed within a period of one year from the date of order
      under review."
                                                    (emphasis supplied)
       9. A mere reading of the aforesaid provision would reflect that
wherever return is filed by the assessee, assessment is to be made within       c
a period of three years from the last date prescribed for furnishing the
return in respect of such period. On the othe.r hand, in those cases where
return is not filed or any dealer, who is liable to pay the tax under the
Act, does not get himself registered therein, the period of assessment
prescribed is five years. We are not concerned with the alternate situation     D
as in the instant appeals not only the assessees are registered dealers,
they had also filed their returns regularly within the prescribed period
and, therefore, assessments were to be completed within a period of
three years from the last date prescribed for furnishing the returns, which
is the normal period prescribed. At the same time, sub-section (I 0) of
Section 11 gives power to the Commissioner to extend a period of three          E
years. Interestingly, there is no upper limit prescribed for which the
period can be extended, meaning thereby such an extension can be given,
theoretically, for any length oftime. This discretion is, however, controlled
by obligating the Commissioner to give his reasons for extension, and
such reasons are to be recorded i.n writing. Obviously, the purpose of          F
giving reasons in writing is to ensure that the power to extend the period
oflimitation is exercised for valid reasons based on material considerations
and that power is not abused by exercising it without any application of
mind, or ma/a fide or on irrelevant considerJ!tions or for extraneous
purposes. Such an order of extension of time, naturally, is open. to judicial
review, albeit within the conL1es of law on the basis of which such             G
judicial review is permissible.
      I 0. Be that as it may, the question before us is as to whether the
power to extend time is to be necessarily exercised before the normal
expiry of the said period of three years run out.
                                                                                H
904                   SUPREME COURT REPORTS                      [2016] 1 S.C.R.



A             11. Mr. Ganguli, submitted that there is no such embargo or
      impediment provided in sub-section ( 10) of Section 11 mandating the
      Commissioner to pass an order of extension necessarily within the normal
      period of three years. He submitted that the word used in the aforesaid
      provision 'extension' of time is in contradistinction to the word 'deferment'
      which appears in the Kamataka Legislation. On that basis, he argued
B
      that it was inappropriate on the part of the High Court to refer to and
      rely upon the judgment ofKamataka High Court inasmuch as provision
      of law contained in the Karnataka Sales Tax Act is entirely different.
      He further submitted that since in Punjab Legislation, the expression
      used is 'extension of time', the Court was required to construe the
 c    provision keeping in mind the said language. Mr. Ganguli argued that a
      reading of meaning of expression 'deferment' and 'extension' of time as
      contained in Black's Law Dictionary will clearly bring out the difference.
             · "defer, vb. 1. To postpone; to delay <to defer taxes to another
             year>"
D            · "deferment, n. 1. The act of delaying; postponement <deferment
             of a judicial decision>"
              It was submitted that the expressions 'defer' and 'deferment'
      as can be seen from the above definitions, clearly contemplate
      postponement, which presupposes that the time period originally fixed is
 E    not extinguished. In other words, an action, which is deferred, (i.e. an
      action which is required to be completed within a specified time frame)
      can only be deferred of which the time so fixed has not expired.
              It was submitted that; in contrast, Black's Law Dictionary defines
      the expression 'extension' as follows:
 F
               "Extension, n. 3. Tax.Aperiodofadditional time to file an income-
             tax return beyond its due date. 4. A period of additional time to
             take an action, make a decision, accept an offer, or complete a
             task"
               It was argued that the word 'extension has' varied meanings,
 G
      dependent on the context in which it is used. The expression 'extension'
      in the context of surveillance orders, has been interpreted in the following
      manner:
             "Where surveillance pursuant to order issued under Title Ill of
             Omnibu·s Cfime Control and Safe Streets Act is of same premises,
 H
         STATE OE PUNJAB & ORS. v. M/S. SHREYANS !NOUS                          905
                  LTD. ETC. rA.K. SIKRI, J.l

       involves substantially same persons, and is part of same-' A
       investigation, second Title III surveillance order issued after
       expiration offirst order is 'extension' offirst order for purposes
       of requirement of sealing of recordings, even if there is gap of
       time in between expiration of first order and entry of second."
                                                  (Emphasis supplied)
                                                                          B
       12. Mr. Ganguli also referred to the concept of extension as
incorporated in Section 148 of the Code of Civil Procedure, 1908. He
relied upon the judgment of this Court in D. V. Paulv. Manislw Lalwanf'.
This Court in paragraph 26 of the said judgment held as under:
        "26. Insofar as the first aspect i~ concerned Section 148 CPC, in       c
        our opinion, clearly reserves in favour of the court the power to
        enlarge the time required for doing an act prescribed or allowed
        by the Code of Civil Procedure. Section 148 of the Code may at
        this stage be extrncted.
              "148. Enlargement of time.- Where any period is fixed             D
              or granted by the court for the doing of any act prescribed
              or allowed by this Code, the court may, it its discretion,
              from time to time, enlarge such period not exceeding thirty
              days in total, even though the period originallv fixed or
              granted may have expired."
                                                                                E
        A plain reading of the above would show that when any period or
        time is granted by the court for doing any act, the court has the
        discretion from time to time to enlarge such period even if the
        time originally fixed or granted by the court has expired. It is
        evident from the language employed in the provision that the power
        given to the court is discretionary and intended to be exercised        F
        only to meet the ends of justice."
        13. Mr. Ganguli further submitted that even in the context oftaxation
law, a similar reasoning has been adopted by the Court in Commissioner
of Income Tax, Jullundur v. Ajanta Electricals'. While interpreting
Section 139(2) of the Income Tax Ac~ which empowered the Assessing              G
Officer to grant an extension of time for filing of the return of income,
upholding the power of the Income Tax Officer to extend the time for

, (20 IOJ s sec 546
4
    (1994)5SCCI82                                                               H
906                  SUPREME COURT REPORTS                     [2016] I S.C.R.



A     filing of the Income Tax return by the assessee even after the expiry of
      the time originally granted, this Court held as follows:"
            "9. In this context, the question whether a belated application
            could be regarded as valid ornot has to be considered. As rightly
            pointed out by the Punjab and Haryana High Court while deciding
 B          these cases under Section 256(2) and by the Calcutta High Court
            in Sunderdas Thackersay & Bros.(137 !TR 646), there are no
            words oflimitation in Section 139(2) to the effect that no application
            could be filed after the period allowed had expired. As we have
            stated earlier, it was a procedural provision. The limit of thirty
            days was not intended to be final as discretion was given to the
 c                                        •
            ITO to extend that date. The ITO could have been called upon to
            exercise that discretion for proper reasons. No fetters were placed
            upon the discretion of the ITO as regards the number of times he
            could extend the date or the period for which he could extend it. !!
            is conceded that repeated applications could be made within the
 D          time allowed, in view of the clear indication to that effect in Form
            No. 6, by the use of words "it has not been possible". If it was
            intended that the application for extension of time under Section
             139(2) was to be made within the time allowed originally or within
            the extended time then the words "it has not been possible" were
            not at all necessai:y and the words "it is not possible" would have
 E          been sufficient. Though the rule cannot affect, control or derogate
            from the section of the Act, so long as it does not have that effect,
             it has to be regarded as having the same force as the section of
            the Act. If Section 139(2) is read along with Rule 13 and Form
            No. 6 it becomes clear that an application for extension could be
 F          made even after the period allowed originally or as a result of
             extension granted had expired. Keeping in mind the object of giving
            discretion to the ITO and the consequences that were to follow
             from not filing the return within time, we see no justification for
             reading into the section any limitation to the effect that no
             application could be made after the time allowed had expired. We
 G           see no good reason to construe the section so narrowly."
                                                          (emphasis supplied)
             In that judgment, applying the principles contained in Section
      148, CPC, it was remarked as under:
 H
       STATE OF PUNJAB & ORS. v. MIS. SHREYANS INDUS                       907
                LTD. ETC. [A.K. SIKRl, J.l

      "10. We cannot accept the contention raised on behalf of the A
      Revenue that the word 'extend' in the proviso to Section 139(2)
      implies that at the time of making the application the time allowed
      should not have expired. Though the Civil Procedure Code by
      itself does not apply to the proceedings under the Income Tax
      Act, we see no reason why a principle of procedure evolved for
                                                                            B
      doingjustice to a party to the proceeding cannot be called in aid to
      while interpreting a procedural provision contained in the Act.
      Section 148 of the Code provides that where any period is fixed
      or granted by the court for the doing of any act prescribed or
      allowed by the Code, the court may, in its discretion, from time to
      time, enlarge such period, even though the period originally fixed c
      or granted may have expired. Various situations can be envisaged
      where a party to the proceeding is prevented by circumstances
      beyond his control from doing the required act within the fixed
      period. The assessee may be able to point out that because of a
      sudden death in the family or because of his sudden illness of a
                                                                           .D
      serious nature or because he had to leave for an outside place all
      of a sudden or because he could not return from outside in spite
      of his best efforts, or for other good reasons, as the case may be,
      he was not able to file the return within time ............"
                                              [Emphasis supplied]
                                                                           E
       14. Mr. Ganguli also drew sustenance from the Arbitration Act,
1940 which gave power to the Court to extend time. It was submitted
that this Court has held in the matter of Hindustan Steelworks
Construction Ltd. v. C. Rajasekhar Rao' that the Court has got the
power to extend time even after the award has been given or after the
expiry of the period prescribed from the award.                            F
        15. Mr. Ganguli re-emphasised that reliance upon the decision of
Gujarat High Court in the impugned judgment was untenable as the
provisions ofKarnataka Sales Tax Act are totally different inasmuch as
Section 12(6) of the Karnataka Act provided only 'deferment'. He
submitted that even the judgment of Gujarat High Court in J11ver Jiv11n    G
Meht112 case was distinguishable since that was also a case of exclusion
of a period and the issue therein was the computation of period of
limitation.

'(1987) 4 sec 93                                                           H
908                   SUPREME COURT REPORTS                      [2016) J S.C.R.


A             16. The aforesaid contentions were refuted by the learned counsel
      who appeared for assessees in these appeals. It was submitted that
      sub-section (10) of Section 11 states, in no uncertain term, that the
      assessment order is to be passed 'within a period of three years ..... .'. It
      was emphasised that the word 'within' was of significance. It was
B     pointed out that before the year 1998, no period of limitation was
      prescribed and such a provision came to be inserted by way of amendment
      vide Act No. 12 of 1998 dated April 20, 1998 . It was further argued
      that sub-section (10) of Section 11 obligates the Commissioner to record
      reasons in writing while extending the period. It was submitted that this
      requirement of recording of reasons came up for consideration before
C     Punjab & Hatyana High Court and in a series of judgments, it is held
      that such an order of extension of time can be passed only after giving
      an opportunity of hearing to the assessee. The learned counsel referred
      to the followingjudgments of the High Court:
             (i) State of Punjab, Tllrougll Assistant Excise and Taxation
D            Commissioner, Bat/1inda v. Mis. Olam Agro India Ltd.
             (formerly Olam Export India Ltd); decided by the Punjab &
             Haryana High Court on August 20, 2013.
             (ii) State ofPunjab v. Mis. Olam Agro India Ltd.; Daily Order;
             Dismissed by the Supreme Courtvide Oder dated May 08, 2015.
 E            (iii) A.B. Sugars Limited v. Tiie State of Punjab and otllers;
             Decided by the Punjab & Haryana High Court on September 01,
             2009.
             17. It was also argued that corweptually there was no difference
      between 'deferment' and 'extension' insofar as it related to the issue at
 F    hand which is concerned with the point of time at which Commissioner
      is to exercise his powers. For that, the reasons given by Kamataka
      High Court as well as Gujarat High Court holding that such a power gets
      extinguished with the expiry of normal period of limitation prescrib"ed
      and, therefore, cannot be exercised after the limitati-On period were
 G    germane and relevant while construing the provisions of sub-section ( 10)
      of Section 11 of the Act as well and, therefore, those cases were rightly
      relied upon by the High Court in the impugned judgment.
             18. In rejoinder, Mr. Ganguli refuted the aforesaid submissions of
      the learned counsel for the assessees. The arguments advanced by him
      was that the submission of the assessees that the Commissioner has to
 H
        STATE OF PUNJAB & ORS. v. M/S. SHREYANS INDUS                          909
                 LTD. ETC. fA.K. SIKRI, J.l

afford an opportunity of hearing to the dealer before extending the period     A
of limitation do~s not arise in the present case as this was not the issue
raised in tl\e Courts below. He argued that the question to be decided in
these appeals was as to whether the power under sub-section (I 0) of
Section 11 of the Act could be exercised on the expiry of the period of
three years and this question is not answered in the judgments referred
                                                                               B
to by the opposite party. He further submitted that it is a question of fact
to be decided in each case as to whether assessee was entitled to such
a right of hearing and, therefore, this issue could not be taken up for the
first time in these appeals.
     19. We have bestowed our serious considerations to the
submissions made by the counsel who argued the matter.                         c
        20. We may say at the outset that though provisions of the Punjab
Act are couched in different language from Karnataka Act or Gujarat
Act, the essence of these provisions is same. As noticed above, insofar
as scheme of Punjab Act is concerned, the assessment order is to be
normally passed within a period o(three years. At the same time, power         D
is given to the Commissioner under Section 11 (I 0) of the Act to extend
the· said period of three years. Once such an extension is given, the
order is passed even beyond the period of three years. Significantly, no
upper limit is fixed while giving such extension which means that the
power can be exercised for extending the period for any length of time,        E
subject however to the condition that the Commissioner is bound to record
the reasons justifying such an extension. Obviously, when the
Commissioner passes such an order and give reasons, not only he would
have to justify his action of extending time but also the period by which
the time is extended. In the Karnataka Legislation, the power is of
 'deferment'. In that Legislation as well, the Assessment Order is- to be      F
passed within three years as sub-section (5) of Section 12 ofKarnataka
Sales Tax Act stipulates that no assessment shall be made after a period
of three years from the date on which the return under sub-section ( 1)
of that order is submitted by a dealer subject to two provisos mentioned
 therein. Sub-section (6) of Section 12 mentions as to how the period of       G
limitation is to be computed and reads as under: ·
       "(6) In computing the period of limitation for assessment under
       this Section,-
       (a) the time during which the proceedings for assessment in
                                                                               H
910                   SUPREME COURT REPORTS                   [2016) 1 S.C.R.


A           question have been deferred on account of any stay order granted
            by any Court or any other authority shall be excluded;
            (b) the time during which the assessment has been deferred in
            any case or class of cases by the Joint Commissioner for reasons
            to be recorded in writing shall be excluded."
B            21. Clause (b) of sub-section (6) indicates thatJoint Commissioner,
      in appropriate cases, may pass an order for deferment of Assessment
      Order to be passed by the Assessing Authority and once such an order
      is passed, that period has not to be counted while computing the period
      of limitation. Significantly, this provision also mandates the Joint
c     Commissioner to record reasons for deferring the orders of assessment.
      In essence, therefore, the purport and objective behind the provisions in
      Punjab Act as well as in Karnataka Act remains the same. By making
      any order of deferment under sub-section (6) of Section 12 ofKarnataka
      Sales Tax Act, the Joint Commissioner is, in fact, achieving the same
      purpose of granting more time to the Assessing Officer to pass the
D     Assessment Order. Same is the purpose behind sub-section (11) of
      Section 10 of the Punjab Act. In view thereof, it may not be appropriate
      to go into the nuanced distinction between "deferment" and "extension"
      as per the definitions contained Black's Law Dictionary in the given
      situation, which is dealt with in the instant appeals.
 E           22. Even otherwise, it is important to understand the ratio laid
      down in the judgment of Karnataka High Court in Bharat Heavy
      Electricals Ltd. (supra). The issue in the said case before the Karnataka
      High Court was as to whether the power to pass a deferment order is to
      be exercised even after the expiry of the period of limitation which was
 F    answered in the negative. The reasons given in support of this conclusion
      are as follows:
            " ... Deferment ofassessment has the effect of enlarging the period
            oflimitation which did not expire by the time the deferment order
            is contemplated to be passed. When once the period oflimitation
 G          expires, the immunity against being subject to assessment sets in
            and the right to make assessment gets extinguished. Resort to
            deferment provisions does not retrieve the situation. There is no
            question of deferring assessment which has already become time-
            barred. The provision for exclusion of time in computing the period
            oflimitation of deferment of assessment is meantto prevent further
 H
        STATE OF PU,NJAB & ORS. v. MIS. SHREYANS INDUS                      911
                 LTD. ETC. fA.K. SIKRI, 1.1

      running of time against the Revenue if the limitation had not         A
      expired."
                                                  (emphasis supplied)
       23. It was also observed that upon the lapse of the period of
limitation prescribed, the right of the Department to assess an assessee
gets extinguished and this extension confers a very valuable right on the   B
assessee.
        24. If one is to go by the aforesaid dicta, with which we entirely
agree, the same shall apply in the instant cases as .well. In the context of
the Punjab Act, it can be said that extension of time for assessment has
the effect of enlarging the period of limitation and, therefore, once the c
period of limitation expires, the immunity against being subject to
assessment sets in and the right to make assessment gets extinguished.
Therefore, there would be no question of extending the time for
assessment when the assessment has already become time barred. A
valuable right has also accrued in favour of the assessee when the period D
of limitation expires. If the Commissioner is permitted to grant the
extension even after the exp ii)' of original period oflimitation prescribed
under the Act, it will give him right to exercise such a power at any time
 even much after the last date of assessment. In the instant appeals
 itself, when the last dates of assessment were 30'" April, .2004, 30''
 April, 2005, 30'' April, 2006 and 30'' April, 2007, order extending the E
 time under Section 11(10) of the Act were passed on August 17, 2007,
 August 17, 2007,August 17, 2007 and May25, 2007 respectively. Thus,
 for the Assessment Year 2000-200 I, order of extension is passed more
 than three years after the last date and for the Assessment Year 2001-
 2002, it is more than two years after the last date. Such a situation F
  cannot be countenanced as rightly held by the High Court. When the
  last date of assessment in respect of these Assessment Years expired, it
  vested a valuable right in the assessee which cannot be lightly taken
  away. As a consequence, sub-section ( 11) of Section I 0 has to be
  interpreted in the manner which is equitable to both the parties. Therefore,
  the only way to interpret the same is that by holding that power to extend G
  the time is to be exercised before the normal period of assessment expires.
  On the aforesaid interpretation, other arguments of Mr. Ganguli lose all
  significance. Argument of learned senior counsel for the appellants based
   on Section 148 of the CPC would be of no consequence. This Section
   categorically states that power to enlarge the period can be exercised H
912                   SUPREME COURT REPORTS                   [2016] 1 S.C.R.


A     even when period originally fixed has expired. Likewise, reliance upon
      Section 139(2) of the Income Tax Act is misconceived. That provision
      is made for the benefit of the assessee which empowers the Assessing
      Officer to grant an extension oftime for filing of the return of income
      and, therefore, obviously will have no bearing on the issue at hand.
      Moreover, this Court in Ajantlia E/ectricals's case (supra), which is
B
      relied upon by the learned counsel for the appeJ.lant, held that the time
      can be extended even after the time allowed originally has expired on
      the interpretation of the words ..it has not been possible" occurring in
      Section 133(2) of the Act. The Court, thus, opined that the aforesaid
      expression would mean that the time can be extended even after original
c     time prescribed in the said provision has expired. Same is our answer to
      the argument of Mr. Ganguli predicated on Section 28 of the Arbitration
      Act, 1940 as that provision was in altogether different context.
            25. We, thus, do not find any error in the impugned judgments of
      Punjab and Haryana High Court and as a consequence, ·dismiss all these
D     appeals. Parties are, however, left to bear their own cost.


      Devika Gujral                                           Appeals dismissed.