1981 (3) TMI 233 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of reassessment order beyond the period of limitation under section 16.
2. Calculation of the period of five years under section 16(1).
3. Invocation of section 16 in case of deliberate omission in the original assessment order.

Analysis:

Issue 1: Validity of reassessment order beyond the period of limitation under section 16
The assessee contended that the reassessment order made on 18th November, 1975, was beyond the period of limitation prescribed under section 16. The argument was based on the timing of notices issued under section 16 and the subsequent reassessment order. However, the Court rejected this argument, emphasizing that the Tribunal's order retroactively nullified the rectification order, rendering the original assessment flawed. Therefore, the notice issued on 11th March, 1975, was valid, as it was within the jurisdiction of the assessing officer to initiate reassessment proceedings under section 16.

Issue 2: Calculation of the period of five years under section 16(1)
The contention that the limitation of five years should be calculated based on the reassessment order rather than the notice initiating the proceedings was addressed. The Court referred to previous judgments to establish that the word "determine" in section 16(4) signifies the initiation of proceedings to ascertain escaped turnover, not the final assessment order. It was clarified that section 16(4) is an independent provision not limiting the powers of section 16, and the limitation period is correctly calculated from the initiation of proceedings.

Issue 3: Invocation of section 16 in case of deliberate omission in the original assessment order
The assessee argued that section 16 could not be invoked due to a deliberate omission in the original assessment order regarding the turnover in question. However, the Court cited precedents to support the assessing authority's power to reassess omitted turnover, even if initially considered exempt. It was established that section 16 applies to turnovers omitted from taxation, regardless of the initial assessment decision.

In conclusion, the Court dismissed all three contentions raised by the assessee, affirming the validity of the reassessment order and the invoking of section 16. The revision petition was dismissed, and costs were awarded to the respondent.