GENERAL MOTORS INDIA PRIVATE LIMITED,HARYANA vs. CIRCLE-1(1), GURGAON

The identical submissions of the parties have been considered by us in the case of Teva Pharmaceutical & chemical Industries India Private Limited Vs. Assessment Unit, Income Tax Department/DCIT in vide order dated 19/01/2026. The Co- raised by the Revenue and also the request of the Department for deferring the hearing of the Appeal and decided the Appeal. Following the ratio laid down in the case of Teva Pharmaceutical & chemical Industries India Private Limited, we reject the preliminary objection raised by the Revenue and the request of the Department for deferring the hearing.

The Ld. Assessee's Representative filed date chart and contended that the outer statutory time limit for completion of assessment u/s 153(1) r.w.s 153(4) of the Act for Assessment Year 2017-18 expired on 30/09/2021 and the Final assessment order came to be passed u/s 143(3) r.w. Section 144C(13) on 26/07/2024, which is beyond the statutory limitation prescribed u/s 153 r.w. Section 144C of the Act.

For the sake of ready reference, date Chart filed by the Assessee is reproduced as under:

The Hon'ble High Court of Madras in the case of Roca Bathroom Products Pvt. Ltd (supra) held that, time limit prescribed u/s 153 of the Act has to be adhered to and that both Section 144C and 153 of the Act are mutually inclusive and interdependent. The presence of notwithstanding clause in Section 144C(13) of the Act would not exclude the operation of Section 153 of the Act. The relevant portion of the Judgment of Hon'ble High Court of Madras in the case of Roca Bathroom Products Pvt. Ltd (supra)is reproduced as under:-

Admittedly, the facts including the dates are not under dispute. As regards the appeal in W.A.No.1854 of 2021, even though the remand was on 24.01.2013 and the assessee had received the order on 08.02.2013, the first notice by the DRP was issued on 19.02.2014 and the first hearing in the Chennai office was on 10.03.2014. Therefore, it is lucid that the DRP had the knowledge of the order before 19.02.2014. The matter was heard on various dates in Chennai office and written submissions were also filed. Thereafter, the files have been transferred to Bengaluru by the CBDT notification dated 31.12.2014. The Learned Judge relying upon the findings in the batch of cases which was decided first and rendered additional findings, which have been extracted in paragraphs 10 and 11 above, has allowed the writ petitions holding that the time limit under Section 153 (2A) was not adhered to and in any case, the proceedings have not been concluded within a reasonable time.

As rightly contended by the learned senior counsels and affirmed by the Learned Judge, the DRP proceedings is a continuation of assessment proceedings. To put it further, it is a part of assessment proceedings, once the objections are filed and under section 144C (12) a period of 9 months is prescribed, within which, directions are to be issued by the DRP, failing which any directions are to be treated as otiose. As seen from the timeline discussed in the earlier paragraphs, the original assessment proceedings are to be completed within 21 months and the additional time of 12 months is granted when proceedings before TPO is pending. The TPO has to pass orders before 60 days prior 19 to the last date. Then 30 days time is given to the assessee to file their objection before the DRP and the DRP is given 9 months General Motors India (P.) Ltd. time and thereafter, within one month from the end of the month of receipt of directions from DRP, the final order is to be passed. This court is not in consonance with the contention of the learned senior panel counsel for the appellants/ revenue that the time period of 33 months, provided initially is for the draft order and not for the final order. A careful perusal of the timeline would indicate that the time limit is for the final assessment and not for the draft order. The anomaly in the argument is that in the present cases, no fresh draft order was passed, but the DRP had issued the notices. If the contention of the appellants / revenue was to hold some water, they must have passed the draft assessment order immediately on receipt of the order from the Tribunal, but instead, notice was issued by the DRP. In any case, it is a far cry for the revenue as because no order has been passed for more than 5 years.

As held above, the assessment has to be concluded within 21 months when there is no reference and when there is a reference, it has to be concluded within 33 months. In the additional 12 months, the draft order is to be passed, the objections have to be filed, the DRP has to issue the directions and the final order is to be passed. The provisions under section 144C and section 153 are not mutually exclusive as both contain provisions relating to Section 92CA and are inter-dependent and overlapping. On remand, prior to amendment as per Section 153 (2A), the Assessing officer is given 12 months to pass a fresh assessment order. Therefore, it is incumbent on him to do so, irrespective of the fact that DRP has completed the hearing and issued the directions or not. As rightly held by the learned judge, we are of the view that the DRP ought to have concluded the proceedings within 9 months from the date of receipt of the Tribunal’s order, when it had issued a notice on 19.02.2014 and conducted the hearing as early as on 10.03.2014 and on several dates. The DRP at Chennai, in fact ought to have passed orders before 19.11.2014, even if the date of receipt of the notice is taken as 19.02.2014. In that event, the assessing officer ought to have passed the order before 31.12.2014 or at the latest before 31.03.2015 considering that the order was received during the financial year 2013-14. The transfer of the files to Bengaluru, after the lapse of the time, will not indefinitely extend the time and can have no impact on the time lines. It is an inter-department arrangement and it cannot defeat the rights of the assessee.

Insofar as the non-obstante clause in Section 144C(13) is concerned, we concur with the view of the Learned Judge. The exclusion of applicability of Section 153 or Section 153 B is for a limited purpose to ensure that dehors larger time is available, an order based on the directions of the DRP has to be passed within 30 days from the end of the month of receipt of such directions. The section and the sub-section have to be read as a whole with connected provisions to decipher the meaning and intentions. At this juncture it would be useful to refer to the following decisions: (i) Sultana Begum v. Prem Chand Jain, (1997) 1 SCC 373 at page 381: 21 “11. The statute has to be read as a whole to find out the real intention of the legislature.

In Canada Sugar Refining Co. v. R. [1898 AC 735 : 67 LJPC 126] , Lord Davy observed: “Every clause of a statute should be construed with reference to the context and other clauses of the Act, so as, as far as possible, to make a consistent enactment of the whole statute or series of statutes relating to the subject- matter.” ……….

This rule of construction which is also spoken of as “ex visceribusactus” helps in avoiding any inconsistency either within a section or between two different sections or provisions of the same statute.

On a conspectus of the case-law indicated above, the following principles are clearly discernible: (1) It is the duty of the courts to avoid a head-on clash between two sections of the Act and to construe the provisions which appear to be in conflict with each other in such a manner as to harmonise them. (2) The provisions of one section of a statute cannot be used to defeat the other provisions unless the court, in spite of its efforts, finds it impossible to effect reconciliation between them.

The statute must be read as a whole and one provision of the Act should be construed with reference to other provisions in the same Act so as to make a consistent enactment of the whole statute.

The court must ascertain the intention of the legislature by directing its attention not merely to the clauses to be construed but to the entire statute; it must compare the clause with other parts of the law and the setting in which the clause to be 23 interpreted occurs. (See R.S. Raghunath v. State of Karnataka [(1992) 1 SCC 335 : 1992 SCC (L&S) 286 : (1992) 19 ATC 507 : AIR 1992 SC 81] .) Such a construction has the merit of avoiding any inconsistency or repugnancy either within a section or between two different sections or provisions of the same statute. It is the duty of the court to avoid a head-on clash between two sections of the same Act. (See Sultana Begum v. Prem Chand Jain [(1997) 1 SCC 373 : AIR 1997 SC 1006]).”

Further, similar non-obstante clause is also used in section 144C(4) with a same limited purpose to imply, even though there might be a larger time limit under Section 153, once the order of TPO is accepted or not objected to, causing a deeming fiction of acceptance, the final order is to be passed immediately. The object is to conclude the proceedings as expeditiously as possible and the authority need not wait for the last date to pass the orders. The limitation prescribed under the statute is for the assessing officer and therefore, it is his duty to pass order in time irrespective of whether the directions are received from DRP or not. As held by us above, the DRP will have no authority to issue directions after nine months and a further period of one month as per section 144C (13) and three months under section 153 (2A) is available, within which period no orders have been passed in the present cases. The General Motors India (P.) Ltd. reference made by the learned senior counsels on the judgments in Nokia India Private Ltd (supra) and Vedanta Ltd (Supra) is well founded. The timeline given under the Act is to be strictly followed.

In so far the show cause notice issued is concerned, though generally, the Court wit will be circumspect at the stage of show cause notice, the law on the point is well belled with exception carved in the following cases: a. when the nonce is without authority, b. when notion is without authority c. when notice is issued without following the procedures under the applicable Act of the rules framed there under and d. when the notice is issued with a prejudiced mind. The challenge must be available ex-facie leaving no room for the court to peruse or discuss intricate facts in the present case, the challenge is on the ground of limitation and hence, we hold that the proceedings under Article 226 of the constitution are maintainable.

As regards the relief sought in other appeals viz., W.A.No. 1517/2021 etc. batch, the findings rendered above are equally applicable. In these cases, for the assessment year 2009-10, the order of remand to the Assessing officer was passed on 18.12.2015 and insofar as the assessment year 2010-11 is concerned for one issue, it was passed on 18.12.2015 and for other two issues, it was passed on 23.09.2016 after the amendment, by which time, the time limit was brought down to 9 months. As such, fresh orders ought to have been passed before 31.03.2017 for the assessment year 2009- 10 and for one issue relating to the assessment year 2010-11 reckoning the 12 months from the financial year 2015-16 and on or before 31.12.2017 reckoning 9 months from the financial year 2016- 17. Therefore, the Assessing officer ought to have passed a draft assessment order immediately and asked the assessee to file their objections with the DRP. For the mistake and the lapse of the Assessing officer, the vested right of the Assessee cannot be taken away.

We are not oblivious of the fact that any finding on the aspect of reasonableness in time in passing orders when no time is provided would be superfluous in view of our decision in earlier paragraphs. It is necessary to decide on the issue as in this case, the revenue has General Motors India (P.) Ltd. taken more than 5 years in one appeal and 4 years in other appeals, which is unacceptable as rightly held by the learned judge. We are not alone on this issue and are fortified by the following judgments of the Hon'ble Supreme Court in this regard. (i) Bharat Steel Tubes Ltd. v. State of Haryana, [(1988) 3 SCC 478: 1988 SCC (Tax) 409 at page 4871 15. Before we part with the case, we would like to indicate that assessment of tax should be completed with expedition. It involves the revenue to the State. In the case of a registered dealer who collects sales tax on behalf of the State, there is no justification for him to withhold the payment of the tax so collected. If a timely assessment is completed, the dues of the State can be conveniently ascertained and collected. Delay in completion of assessment often creates problems. The assessee would be required to keep up all the evidence in support of his transactions. Where evidence is necessary, with the lapse of time, there is scope for its being lost. Oral evidence as and when required to be produced by the assessing authority may not be available if a long period intervenes between the transactions and the consideration of the matter by the assessing authority Long delay thus is not in the interest of either the assessee or the State. In view of the fact that a period of limitation has been prescribed for bringing the escaped turnover into the net of taxation, such an eventuality cannot be grappled with appropriately unless timely assessment is completed. In several taxing statutes, even in a situation like this, where assessment under Section 11(3) or 28(3) of the respective Acts is contemplated, a period of limitation is provided. Until by statute, such a limitation is provided, it is proper for the State Governments to require, by statutory rules or appropriate instructions, to ensure completion of assessments with expedition and reasonable haste but subject to rules of natural justice" (ii) Govt. of India v. Citedal Fine Pharmaceuticals, [(1989) 3 SCC 483 1989 SCC (Tax) 464 at page 487] 6. Learned counsel appearing for the respondents urged that Rule 12 is unreasonable and violative of Article of for the recovery of duty. He urged that in the absence of any prescribed period for recovery of the duty as contemplated by Rule 12. the officer may act General Motors India (P.) Ltd. arbitrarily in recovering the amount after lapse of long period of time. We find no substance in the submission While it is true that Rule 12 does not but that by itself does not render the rule unreasonable or violative of Article 14 of the Constitution prescribed any period within which recovery of any duty as contemplated by the rule is to be made. in the absence of any period of limitation it is settled that every authority is to exercise the power within a reasonable period What would be reasonable period, would depend upon the facts of each case Whenever a question regarding the inordinate delay in issuance of notice of demand is raised, it would be open to the assessee to contend that it is bad on the ground of delay and it will be for the relevant officer to consider the question whether in the facts and circumstances of the case notice of demand for recovery was made within reasonable period. No hard and fast rules can be laid down in this regard as the determination of the question will depend upon the facts of each case (iii) (State of Punjab v. Bhatinda District Coop. Milk Producers Union Ltd., [(2007) 11 SCC 363: 2007SCC OnLine SC 1254 at page 367] 17. A bare reading of Section 21 of the Act would reveal that although no period of limitation has been prescribed therefor the same would not mean that the suomotu power can be exercised at any time 18. It is trite that if no period of limitation has been prescribed, statutory authority must exercise its jurisdiction within a reasonable period What, however, shall be the reasonable period would depend upon the nature of the statute, rights and liabilities thereunder and other relevant factors.

Revisional jurisdiction, in our opinion, should ordinanly be exercised within a period of three years having regard to the purport in terms of the said Act. In any event, the same should not exceed the period of five years. The view of the High Court, thus, cannot be said to be unreasonable. Reasonable period, keeping in view the discussions made hereinbefore, must be found out from the statutory scheme. As indicated hereinbefore, maximum period of limitation provided for in sub-section (6) of Section 11 of the Act is five years.

In SB Gurbaksh Singh v. Union of India ((1976) 2 SCC 181 1976 SCC (Tax) 177: (1976) 37 STC 425] Untwalia, J., speaking for the Bench, opined (SCC p. 188, para 15) 15. Apropos the fourth and the last submission of the appellant, suffice it to say that even assuming that the revisional power cannot be exercised suomotu after an unduly long delay, on the facts of this case it is plain that it was not so done. Within a few months of the passing of the appellate order by the Assistant Commissioner, the Commissioner proceeded to revise and revised the said order. There was no undue or unreasonable delay made by the Commissioner. It may be stated here that an appeal has to be filed by an assessee within the prescribed time and so also a time- limit has been prescribed for the assessee to move in revision. The appellate or the revisional powers in an appeal or revision filed by an assessee can be exercised in due course. No time-limit has been prescribed for it. It may well be that for an exercise of the suomotu power of revision also the revisional authority has to initiate the proceeding within a reasonable time. Any unreasonable delay in exercise may affect its validity. What is a reasonable time, however, will depend upon the facts of each case"

The question at would be the reasonable period did not fall for consideration there The binding precedent of this Court, some of which had been referred to us heretobefore had not The counsel appearing for the parties were remissin bringing the same to the notice of the Court Furthermore from a perusal of the impugned notice dated 4-9-2006 is Apparent that the resvisional authority did not assign any reason as to why such a notice was being issued considered after a period of 53% years" Generally no hard and fast rule can be laid down to indicate what a reasonable time is. It though depends upon the facts of the each case drawing a clue from Article 113 of the Limitation Act the residual entry, it would be reasonable to conclude that in such cases, action is to be concluded within 3 years Needless to say if the statute prescribes shorter period, the doctrine of reasonable time will not be applicable and the timeline under the statute is to be strictly followed 27. For the reasons set out before, we conclude as under:-

Further the Co-ordinate Bench of the Tribunal in the case of Teva Pharmaceutical & chemical Industries India Private Limited Vs.

In view of the ratio laid down by the Hon'ble High Court of Madras in the case of Roca Bathroom Products Pvt. Ltd (supra), also relying on the plethora of orders passed by the Co-ordinate Bench of the Tribunal of Hyderabad Bench (supra) and the decision of the Co- ordinate Bench of the Tribunal in the case of Teva Pharmaceutical & chemical Industries India Private Limited Vs. Assessment Unit, Income Tax Department/DCIT(supra), in order to follow the principals of Tribunal will not serve any purpose, by respectfully following those binding precedents, we hold that the impugned Final Assessment Order passed u/s 143(3) r.w.s. 144C(13) of the Act dated 28/02/2022 pertaining to Assessment Year 2017-18 is barred by limitation as per Section 153 r.w. Section 144C of the Act. Accordingly, the impugned Final Assessment Order is hereby quashed.

Since above issue of Limitation is pending adjudication before the Hon'ble Supreme Court in case of Shelf Drilling Ron Tappmeyer Ltd. (supra) and to be reached finality by the Larger Bench of the Hon'ble Supreme Court, we grant liberty to the parties to get the present Appeal revived for adjudication of the other issues on merits if the decision of the Hon'ble Supreme Court on this issue necessitates modification of this order. Accordingly, we dispose-off the captioned appeal on the limited legal issue of limitation with liberty as mentioned above to the parties and keep open other issues raised by the Assessee on merits, subject to the outcome of the Judgment of the larger bench of the Hon’ble Supreme Court in the case of Shelf Drilling Ron Tappmeyer Ltd. (supra).

In the result, appeal of the Assessee is allowed.