1980 (1) TMI 192 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of reopening assessment under section 16 of the Tamil Nadu General Sales Tax Act.
2. Limitation period for reassessment under section 16.

Analysis:
The judgment by the Madras High Court dealt with two revision petitions challenging the Sales Tax Appellate Tribunal's order for the assessment years 1967-68 and 1968-69. The assessing authority sought to reopen the assessment based on a Supreme Court decision reversing a previous ruling. The assessee objected to the reopening under section 16 of the Act and raised a limitation point. The Appellate Assistant Commissioner and the Tribunal rejected the objections, leading to the revision petitions.

In the case of Yercaud Coffee Curing Works Ltd. v. State of Tamil Nadu, it was established that the assessing authority can reassess turnover omitted from earlier taxation or considered exempt by the authority itself. The court clarified that if turnover was wrongly exempted, it constitutes escaped turnover, allowing reassessment under section 16. The assessment process involves two possibilities: assessable turnover or exempt turnover. If turnover is wrongly exempted, it can be considered escaped turnover for reassessment.

Regarding the limitation period for reassessment under section 16, the court referred to a previous decision in State of Tamil Nadu v. K. O. Mohamed Sulaiman & Co. The court held that as long as proceedings were initiated and pending within the statutory period, there is no time limit for completing reassessment. Since the proceedings in the present case were initiated within the statutory period, the reassessment orders passed after the expiry dates were deemed valid.

Ultimately, the court dismissed both revision petitions, upholding the Tribunal's decision. The court found no grounds to support the objections raised by the assessee regarding the validity of reopening the assessment under section 16 and the limitation period for reassessment. The petitions were dismissed with no order as to costs.