Case Note

Title:

M/s Shiv Steels v. The State of Assam & Ors.
Civil Appeal Nos. 4440–4442 of 2014
Supreme Court of India (Order dated 11 September 2025)

Bench:

J.B. Pardiwala, J. and Sandeep Mehta, J.

Facts:

• The appellant, M/s Shiv Steels, challenged reassessment orders for the years 2003–2004, 2004–2005, and 2005–2006 under the Assam General Sales Tax Act, 1993.

• The original assessments were declared time-barred under Section 19 of the Act.

• Subsequently, the Revenue obtained the Commissioner’s sanction and invoked Section 21 of the Act to justify reassessment beyond the limitation prescribed in Section 19.

• The Gauhati High Court upheld the Revenue’s stand, holding that reassessment was valid since sanction under Section 21 was granted on 21.03.2011.

Issues:

1. Whether reassessments, once declared time-barred under Section 19, can be revived by invoking Section 21 with the Commissioner’s sanction.

2. Whether the High Court erred in construing the interplay between Sections 19 and 21 of the Act, 1993.

Arguments:

• Appellant (Shiv Steels):

  • Assessments were barred by limitation under Section 19.

  • Section 21 applies only when no assessment at all has been made, not when an assessment has already been undertaken and declared invalid.

• Respondent (State of Assam):

  • Section 21 provides an outer limit of seven years if Commissioner’s sanction is obtained.

  • Reassessment was therefore within time.

  • Earlier quashing of assessments did not prevent fresh reassessment once sanction was granted.

Supreme Court’s Findings:

1. Strict interpretation of taxing statutes: Tax liability cannot be extended by inference or intention; it must strictly conform to statutory provisions.

2. Scope of Section 21:

   • Section 21 applies only in cases where no assessment has been made within the time under Section 19.

   • Once an assessment is undertaken but held invalid for being time-barred under Section 19, Section 21 cannot be invoked to revive it.

3. The Gauhati High Court’s interpretation of Sections 19 and 21 was incorrect.

Decision:

• Appeals allowed.

• High Court judgment set aside.

• Reassessments held to be invalid as barred by limitation.

Legal Principle:

• In fiscal statutes, limitation provisions are mandatory. Revenue cannot resort to Section 21 to revive time-barred assessments that have already been attempted under Section 19.

• Taxing statutes must be construed strictly; no tax can be levied by analogy or intention.

Endnotes (Case Law References):

1. State of Punjab v. Bhatinda District Co-op. Milk Producers Union Ltd., (2007) 11 SCC 363 – Reassessment beyond limitation is invalid.

2. Sales Tax Officer v. Sudarsanam Iyengar & Sons, AIR 1970 SC 1453 – Limitation provisions in taxing statutes must be strictly followed.

3. Commissioner of Income Tax v. Anjum M.H. Ghaswala, (2002) 1 SCC 633 – Tax authorities bound by statutory limitations; equity has no role in tax law.

4. Union of India v. Popular Construction Co., (2001) 8 SCC 470 – Strict adherence to statutory limitation periods.

5. Govind Saran Ganga Saran v. Commissioner of Sales Tax, (1985) 155 ITR 144 (SC) – Components of tax liability must be expressly provided in law; no imposition by inference.

PDF of M/s Shiv Steels v. The State of Assam & Ors. MS. SHIV STEELS VERSUS THE STATE OF ASSAM (SUPREME COURT)