Pending sales tax assessment proceedings are not time-barred by best judgment limitation when a return has already been filed.

A return filed by a registered dealer commences pending sales tax assessment proceedings, and a notice under section 11(2) of the Punjab General Sales Tax Act, 1948, may be issued without any prescribed limitation period. The Court held that the limitation applicable to best judgment or escaped assessment provisions could not be imported into assessments under section 11(1) to section 11(3), and a merely reasonable-time requirement could not invalidate the notice. The earlier Full Bench view treating section 11(3) as subject to the best judgment limitation was overruled as inconsistent with binding precedent. The assessment proceedings were therefore not time-barred.

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Issues: (i) Whether a notice under section 11(2) of the Punjab General Sales Tax Act, 1948, and the completion of assessment under section 11(3) were barred by limitation after the expiry of five years from the end of the relevant quarter or year. (ii) Whether the earlier Full Bench view that assessment under section 11(3) must be completed within the limitation period applicable to best judgment assessments remained good law.

Issue (i): Whether a notice under section 11(2) of the Punjab General Sales Tax Act, 1948, and the completion of assessment under section 11(3) were barred by limitation after the expiry of five years from the end of the relevant quarter or year.

Analysis: The filing of a return by a registered dealer commences assessment proceedings. Section 11(1) permits assessment on the basis of the return. A notice under section 11(2) is only a step in a pending proceeding and may be issued at any time after the return is filed. The statute fixed a period of limitation for best judgment action under section 11(4), section 11(5), and section 11(6), but no limitation period was prescribed for action under section 11(1), section 11(2), or section 11(3). The Court also held that a requirement to act within a merely reasonable time could not be imported so as to nullify a notice under section 11(2).

Conclusion: No limitation barred the issuance of notice under section 11(2) or the continuation of assessment proceedings under section 11(3) in the facts of the case.

Issue (ii): Whether the earlier Full Bench view that assessment under section 11(3) must be completed within the limitation period applicable to best judgment assessments remained good law.

Analysis: The Court examined earlier authorities and held that the Full Bench decision which treated section 11(2) as a fresh proceeding and imported the limitation applicable to section 11(4), section 11(5), and section 11(6) into section 11(3) was inconsistent with binding precedent. The Court reaffirmed that pending assessment proceedings are governed differently from escaped assessment proceedings, and that the limitation governing best judgment assessments does not control proceedings where a return has already been filed.

Conclusion: The earlier Full Bench view was overruled and rejected as incorrect.

Final Conclusion: The appeals failed because the assessment proceedings were not time-barred, and the revenue authorities were entitled to proceed with assessment in accordance with the Act.

Ratio Decidendi: In a pending sales tax assessment proceeding commenced by the filing of a return, a notice under section 11(2) may be issued without a prescribed limitation period, and the absence of a limitation for section 11(2) and section 11(3) cannot be cured by importing the limitation applicable only to best judgment or escaped assessment provisions.

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