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M/S Shiv Steels vs. The State of Assam & Ors.

Not available · 2025 INSC 1126Decided 11 Sept 2025
Not available
Justice J.B. Pardiwala · Justice Sandeep Mehta

Background

The appellant, a steel trading firm, had its sales tax assessments for the years 2003-2006 initially declared time-barred by the tax authority itself under Section 19 of the Assam General Sales Tax Act, 1993. The department then obtained the Commissioner's sanction and invoked Section 21 of the Act (which allows a longer, seven-year outer limit for reassessment with such sanction) to conduct a fresh assessment. The appellant challenged this fresh assessment before the Gauhati High Court, which upheld the department's approach, holding the reassessment was validly within time once the Commissioner's sanction was granted, though it directed that the appellant be given a proper hearing.

Decision Breakdown

The Supreme Court held that in construing tax statutes, courts must go strictly by the letter of the law. If the revenue's case falls squarely within the statute's provisions, tax can be levied; if not, no tax can be imposed merely by inference, analogy, or guessing at legislative intent. Applying this strict approach, the Court found the High Court's reasoning "completely incorrect" and allowed the appeal, along with two connected appeals, setting aside the High Court's judgment.

Lesson Learnt

Tax liability and reassessment powers must be traced to the exact letter of the taxing statute. Courts will not stretch or infer authority to reassess or tax a person beyond what the law explicitly permits, even where the revenue's procedural steps (like obtaining sanction) appear to have been followed.

Official source (sci.gov.in)View Judgment (PDF)

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