1989 (3) TMI 358 - HC - VAT and Sales Tax

Issues Involved:
1. Limitation period for issuing notices under Section 12(2) of the Rajasthan Sales Tax Act.
2. Applicability of the proviso to Section 12(2) in lifting the bar of limitation.
3. Validity of combined notices for multiple assessment years.
4. Jurisdiction and authority of the assessing authority and Tribunal in issuing and reviewing notices.
5. Legal consequences of escaped turnover and reassessment orders.

Detailed Analysis:

Limitation Period for Issuing Notices:
The primary issue in this case revolves around whether the notices issued under Section 12 of the Rajasthan Sales Tax Act for the biennial assessment years 1972-74 and 1974-76 were time-barred. The Tribunal held that these notices were issued beyond the statutory limitation period of 8 years, making them invalid. The limitation period is prescribed under Section 12(2) of the Act, which states that no notice shall be issued after the expiration of 8 years from the end of the relevant assessment year.

Applicability of the Proviso to Section 12(2):
The petitioner argued that the proviso to Section 12(2) lifts the bar of limitation in cases where reassessments are made to give effect to any finding or direction contained in an order under Sections 13, 14, or 15, or in an order of any competent court. The Tribunal, however, found that the proviso did not apply in this case because the learned single Member of the Board of Revenue had categorically directed that no notices should be issued if the assessments were time-barred. The Tribunal upheld this direction, stating that the assessing authority had exceeded its powers by issuing notices after the limitation period had expired.

Validity of Combined Notices:
The Tribunal also addressed the issue of combined notices for multiple assessment years. It was contended that combined notices are invalid if they include periods both within and beyond the limitation period. The Tribunal referenced the decision in Arbind & Company v. State of Rajasthan, which held that a composite notice for assessment years within and beyond the limitation period is bad in law. The Tribunal agreed that separate notices should be issued for each assessment year within the prescribed limitation period.

Jurisdiction and Authority:
The Tribunal examined the jurisdiction and authority of the assessing authority and the Tribunal in issuing and reviewing notices. It was noted that the learned single Member of the Revenue Board had the authority to direct the issuance of fresh notices within the limitation period. However, the Tribunal found that the assessing authority had acted beyond its jurisdiction by issuing notices after the limitation period had expired, contrary to the directions of the Revenue Board.

Legal Consequences of Escaped Turnover:
The petitioner argued that the liability to pay tax is independent of the limitation period and can be enforced at any time. However, the Tribunal held that while the liability to pay tax remains, it cannot be enforced after the limitation period has expired unless the bar of limitation is lifted by the proviso to Section 12(2). The Tribunal emphasized that the learned single Member of the Revenue Board had the discretion to pass a particular order and had chosen to direct that no notices be issued for time-barred assessments, even if it resulted in escaped turnover.

Conclusion:
The Tribunal concluded that the notices issued for the assessment years 1972-74 and 1974-76 were time-barred and not saved by the proviso to Section 12(2) of the Act. The Tribunal upheld the decision of the learned single Member of the Revenue Board, which directed that no notices be issued for periods beyond the limitation period. The Tribunal dismissed the petitions, finding no force in the arguments presented by the petitioner, and held that issuing fresh notices after 12 years would be unjust and unnecessary. The costs of the petitions were made easy.

← Previous Next →