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TMI Blog1987 (7) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... lso, and exhibit P1 detailed notice dated 16th March, 1978 under rule 6(7) of the C.S.T. (Kerala) Rules, was served on the petitioner. The proposal was to bring to tax a turnover of over Rs. 1,00,00,000 which had allegedly escaped assessment, and to levy tax at the rate of 10 per cent, as the transactions were not covered by C forms. 2.. The petitioner filed exhibit P2 objections on 18th May, 1978 and on 6th December, 1978 another notice (exhibit P3) was served on the firm requiring it to produce the books of accounts for the year 1973-74, in order to verify the facts and circumstances relied on in exhibit P2. According to the petitioner, the books were so produced on 23rd December, 1978 and was later returned to it. The firm was thereaft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year. We shall hence thank you to kindly let us know the provision of law under which you have proposed to reopen the assessment. Please note that you have no jurisdiction to revise the assessment for 1973-74 at this stage. In this connection, we may mention that we had produced our accounts for the year 1973-74 before you as early as December, 1978 and the accounts had been examined for about 15 days continuously and you had closed the proceedings oil the ground that there is no basis for reopening the assessment. In these circumstances, the present notice is wholly without jurisdiction. We shall proceed further in this matter after receipt of your reply." The department was not impressed by this new approach, and it furnished exhibit P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates, proceed to determine to the best of his judgment the turnover which has escaped assessment and assess the tax payable on such turnover after issuing a notice to the dealer and after making such enquiries as he considers necessary." The provision is somewhat similar to the one contained in section 35 of the Agricultural Income-tax Act, 1950 but with a difference. Subsection (1) of section 35 empowers the assessing authority to assess agricultural income that has escaped assessment, within five years of the year in question, after issuing an appropriate notice to the party; and subsection (2) provides that no assessment or reassessment under sub-section (1) shall be made after the expiry of five years from that year. The first proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icultural Income-tax Act, for revising/correcting this mistake. The Commissioner declined to interfere, and it was this decision of the Commissioner which was being challenged before this Court. Isaac, J., noticed that the Commissioner was not right in rejecting the revision merely on the ground of "difficulties"; but the learned Judge found, on a thorough examination of the matter, that the assessee had not raised the question at the appropriate stage, that he had not furnished relevant data, and that it would have been impossible for the Commissioner, even if he were so minded, to accept the assessee's contention. The writ petition was therefore dismissed, but it was also observed that the Commissioner could have dismissed the assessee's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, when he is in default of payment of the tax assessed; and no time-limit is fixed for such imposition. Sub-section (4) provides that proceedings for recovery of tax will stand barred after 3 years from the date specified for payment in the demand notice. And the question before the court was whether the assessing authority could impose penalty in a case where the tax imposed had itself become irrecoverable for long. After examining the facts and circumstances of the case, where the assessment was in 1960 and the penalty was imposed in 1976, the court held that in the absence of any explanation as to the long lapse of time, the penalty imposed had to be set aside. Poti, J. (as he then was), adverted to the Supreme Court's observatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s fixed not only for commencement of proceedings, but also for their completion. Where the legislature or the rule-making authority has addressed itself to the question of limitation, and where it has chosen to fix a time-limit for commencement of proceedings, but not for completing it, can a court insist that the proceedings should be completed within such time as it considers reasonable? Assuming that it can, is there scope for holding that the time-lag of five years between exhibits P3 and P4 was "inordinate" or unreasonable? Admittedly, exhibit P1 was issued in time, and it cannot be treated as illegal because there was delay in what followed. (It has to be remembered that in the cases cited, this Court had not interfered with the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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