Vested right of person cannot be affected by retrospective legislation: Bombay HC

Senapati Santaji Ghorpade Sugar Factory Ltd. Vs ACIT (Bombay High Court)

Bombay High Court held that retrospective legislation cannot deprive a person of an accrued right vested in him under a statute or under the Constitution. Thus, the notification dated 28^th September 2021 making only those assessees eligible to file application before the Settlement Commission who were eligible as on 31^st January 2021 is invalid.

Facts- Petitioner is a company engaged in the business of manufacturing and trading in sugar, ethanol, power, etc. Petitioner received a notice dated 16^th September 2021 from Assistant Commissioner of Income Tax, Central Circle 1(1), Pune, who is respondent no.1, stating that a valid application for Assessment Years 2014-15 to 2020-21 has not been filed by petitioner before the Settlement Commission. It is this notice alongwith a condition in a Press Release dated 7^th September 2021 in so far as it seeks to make only those assessees eligible to file application before the Settlement Commission who were eligible as on 31^st January 2021 which was challenged in the petition. Subsequently, upon leave being granted, the petition was amended to also impugn a notification dated 28^th September 2021 in so far as it sought to make only those assessees eligible to file applications before the Interim Board Settlement Commission (IBSC), respondent no.3, who are eligible as on 31^st January 2021.

Conclusion- When the Board itself feels that the date as prescribed in Section 245C(5) of the Act is required to be extended, there is no doubt that the provisions of Section 245C(5) of the Act are required to be read down. With respect to the impugned notification, the question in the present case is not of reading down of the notification, but the question is whether the notification goes beyond the provisions of the Act. If the notification goes beyond the provisions of the Act, then to that extent, the notification is clearly invalid and liable to be quashed.

Retrospective legislation cannot affect the vested rights. When the Department has extended the last date from 1^st February 2021 to 30^th September 2021, it can only extend the deadline but cannot introduce a new concept of eligibility as on 1^st February 2021 which is not there in the Act itself. Though the CBDT relaxed the rigours of the provisions of the Act for the benefit of assessees, it is not open to the CBDT to put in new rigours or impediments to the rights of an assessee in a Press Release or a notification which is contrary to the provisions of the Act. Though the legislature has the power to make laws with retrospective effect, that power cannot be used to deprive a person of an accrued right vested in him under a statute or under the Constitution.

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