M/S. Naresh Kumar Gupta vs. The State Of Punjab

2025 INSC 719
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4033 OF 2025

M/s. NARESH KUMAR GUPTA APPELLANT

VERSUS

STATE OF PUNJAB & ANOTHER RESPONDENTS


WITH

CIVIL APPEAL NO.4034 OF 2025
CIVIL APPEAL NO.4035 OF 2025
CIVIL APPEAL NO.4036 OF 2025
CIVIL APPEAL NO.4037 OF 2025
CIVIL APPEAL NO.4038 OF 2025
CIVIL APPEAL NO.4039 OF 2025
CIVIL APPEAL NO.4040 OF 2025
CIVIL APPEAL NO.4041 OF 2025
CIVIL APPEAL NO.4042 OF 2025
CIVIL APPEAL NO.4043 OF 2025
CIVIL APPEAL NO.4044 OF 2025
CIVIL APPEAL NO.4045 OF 2025
CIVIL APPEAL NO.4046 OF 2025
CIVIL APPEAL NO.4048 OF 2025
Signature Not Verified
Digitally signed by
RADHA SHARMA
Date: 2025.05.17
10:02:39 IST
Reason:
CIVIL APPEAL NO.4049 OF 2025


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CIVIL APPEAL NO.4050 OF 2025
CIVIL APPEAL NO.4051 OF 2025
TRANSFERRED CASE(C) NO.41 OF 2023
TRANSFERRED CASE(C) NO.42 OF 2023
TRANSFERRED CASE(C) NO.43 OF 2023
TRANSFERRED CASE (C) NO.44 OF 2023
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

J U D G M E N T


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 &


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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withdrawn vide order of this Court dated 04.05.2016 in SLP (Civil)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:

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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


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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:



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“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
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


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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 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


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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) &


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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 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.



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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


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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 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.


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(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


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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.
(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


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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.


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(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.
(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.


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(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.



…………………………………………..J.
(B. V. NAGARATHNA)



…………………………………………..J.
(SATISH CHANDRA SHARMA)

NEW DELHI;
MAY 01, 2025


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