1990 (11) TMI 360 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of section 12-A of the Karnataka Sales Tax Act, 1957 regarding the period of limitation for initiating proceedings to assess escaped turnovers.
2. Analysis of the immunity granted to the assessee against reopening assessments.
3. Application of legislative amendments to concluded assessments and immunity accrued by the assessee.
4. Comparison with a similar decision by the Andhra Pradesh High Court regarding the revival of rights under amended provisions.

Analysis:
The judgment by the Karnataka High Court dealt with the interpretation of section 12-A of the Karnataka Sales Tax Act, 1957, concerning the period of limitation for initiating proceedings to assess escaped turnovers. The petitioner, an assessee under the Act, was subject to an assessment concluded on 14th July, 1980. However, a notice was issued by the respondent on 25th May, 1987, invoking section 12-A, which empowers the assessing authority to initiate proceedings for escaped turnovers. The key contention raised was regarding the limitation period, which was initially 5 years but later extended to 10 years through legislative amendments. The petitioner argued that the limitation serves as a safeguard against the Revenue initiating fresh proceedings and reopening concluded assessments, thus protecting the assessee from unnecessary trouble.

The judgment emphasized the importance of finality in concluded matters and the immunity conferred on the assessee from being taxed again. It highlighted that the power to reopen assessments due to escaped turnovers is an exception to the immunity granted to the assessee and must be strictly construed. The court noted that once immunity has accrued to the assessee, legislative amendments cannot enable assessing authorities to reopen assessments that have become final. The judgment clarified that an enlarged limitation period applies to cases that have not attained finality and where the assessee has not obtained immunity through the lapse of time.

Furthermore, the judgment referenced a decision by the Andhra Pradesh High Court to support the principle that rights lost under the unamended law cannot be revived by amended provisions. The Andhra Pradesh High Court's decision emphasized that assessments finalized under the old provision cannot be reopened under new provisions if the right of the assessing authority to revise has been extinguished. The Karnataka High Court applied this principle to the case at hand, concluding that the notice issued to the petitioner was set aside, and the writ petition was allowed, thereby making the rule absolute.