1996 (1) TMI 422 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge of assessment order under Karnataka Sales Tax Act, 1957.
2. Interpretation of limitation provisions under section 12(5) and (6) of the State Act.
3. Retrospective amendment affecting assessment proceedings.
4. Effect of legislative enlargement of limitation period on completed assessments.

Analysis:
The judgment pertains to a revision petition challenging an assessment order under the Karnataka Sales Tax Act, 1957. The petitioner, a manufacturer of automotive chains, contested the best judgment assessment order for the year 1982-83. The key contention raised was the bar on the assessment order due to time limitations prescribed under section 12(5) of the State Act.

The Court delved into the legislative amendments affecting the limitation for completion of assessments. Initially, the Karnataka Sales Tax (Amendment) Act, 1985 introduced sub-sections (5) and (6) to section 12, setting a three-year limitation period. Subsequently, Act No. 8 of 1989 retrospectively amended the provisos, extending the limitation to four years for assessments preceding the 1985 amendment.

The petitioner argued that the assessment proceedings were time-barred under the original limitation, rendering the subsequent extension ineffective. However, the Court emphasized the retrospective nature of the amendment, affirming that the extended period applied to concluded assessments as well.

Referring to legal precedents, the Court highlighted that statutory time limits are part of the assessment machinery and do not confer a vested right to avoid assessment post-limitation. Legislative competence to extend time limits, even after expiry, was underscored, emphasizing the flexibility of the legislature in enlarging limitation periods.

Ultimately, the Court dismissed the petition, holding that the retrospective legislative enlargement of the limitation period validated the assessment order completed within the extended timeframe. The judgment reaffirmed the legislative authority to modify time constraints for assessments, even after the original limitation period had lapsed, thereby upholding the validity of the impugned assessment order.