1996 (2) TMI 528 - AT - VAT and Sales Tax

Summary

Issues:
1. Jurisdiction of the assessing authority under section 12 of the old Act.
2. Limitation period for issuing notice under section 12 of the old Act.
3. Effect of notice under section 17 on limitation under section 12.
4. Compliance with procedural requirements for issuing notices under sections 12 and 17.
5. Applicability of the limitation period prevailing at the time of notice issuance.

Analysis:
The judgment pertains to a revision petition filed against the order of the Rajasthan Tax Board confirming a reassessment order under section 12 of the old Act for the assessment year 1986-87. The petitioner, engaged in selling medicines and sanitary napkins, contested the reassessment based on the limitation period for issuing the notice. The petitioner argued that the notice under section 12 was beyond the five-year limitation period prescribed by the Act, rendering the reassessment invalid.

The assessing authority and the Deputy Commissioner rejected the objection regarding limitation, leading to the petition before the Tax Board. The petitioner contended that section 12 dealt with reassessment of incorrectly assessed tax, while section 17 pertained to rectification of mistakes in orders. The petitioner highlighted the specific limitation periods under these sections, emphasizing the importance of adhering to the statutory timelines for issuing notices.

In response, the respondents argued that the objection of limitation was not raised before the Tax Board, and the authorities had not erred in confirming the reassessment order. However, the judgment emphasized the critical nature of the limitation period for exercising jurisdiction under section 12. It cited a precedent to illustrate the significance of complying with the prescribed time limits for issuing notices under the Act.

The judgment clarified that the notice under section 17 did not save the limitation for issuing notice under section 12. It underscored the procedural disparities between the forms of notices required under these sections, emphasizing that mere service of a notice under section 17 did not fulfill the requirements of section 12(2) regarding limitation.

Ultimately, the judgment concluded that since no notice under section 12 was issued within the five-year limitation period for the assessment year 1986-87, the reassessment order was invalid. It highlighted the importance of applying the prevailing limitation period at the time of notice issuance, rather than the period in force at the end of the assessment year. Consequently, the revision petition was allowed, setting aside the reassessment order and related decisions.

In summary, the judgment focused on the jurisdictional limitations of the assessing authority under section 12 of the old Act, emphasizing the strict adherence to statutory timelines for issuing notices and the procedural requirements for rectification and reassessment.