1997 (7) TMI 629 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of limitation provision under Section 12(5) of the Karnataka Sales Tax Act, 1957.
2. Whether the service of the assessment order within the limitation period is necessary for compliance.
3. Application of legal precedents in determining the validity of the assessment order.

Analysis:
The judgment pertains to a revision referred under Section 23(1) of the Karnataka Sales Tax Act, 1957 against an order remanding the matter for fresh assessment for the year 1991-92 due to the absence of a proper pre-assessment notice. The petitioner contended that since the assessment order was served after the limitation period, it should be considered time-barred and null in the eyes of the law. However, both the appellate authorities rejected this contention.

The key issue revolves around the interpretation of Section 12(5) of the Act, which sets a limitation period of three years from the date of submitting the return for making an assessment. The court emphasized that the limitation applies to the making of the assessment and not to the issuance or service of the assessment order. It clarified that the word "made" should not be equated with "issued" or "served," highlighting the legislative intent for timely completion of assessments.

In analyzing legal precedents, the court distinguished the Supreme Court judgment in State of Andhra Pradesh v. M. Ramakishtaiah & Co., where a delayed service of the assessment order led to the order being deemed not passed within the prescribed period. However, the court noted that this case did not support the petitioner's argument that both making and serving of the assessment order must occur within the limitation period.

Referring to the Kerala High Court's decision in Government Wood Works v. State of Kerala, the court rejected the extreme view that non-service of the assessment order within the prescribed period renders the proceedings time-barred. The court highlighted the importance of timely completion of assessments and noted that delays in service could be due to various reasons, including assessees' attempts to avoid tax payments.

Ultimately, the court dismissed the revision petition, finding no valid grounds to interfere with the Tribunal's order. The petitioner was ordered to pay costs assessed at Rs. 250. The judgment underscores the importance of adhering to statutory timelines for assessments and clarifies that the limitation period under Section 12(5) pertains to the making of assessments rather than the service of assessment orders.