Limitation under sales tax assessment starts with the Form XII notice, not earlier internal steps or preliminary inquiry.

Under section 11(5) of the C.P. and Berar Sales Tax Act, assessment proceedings begin only when the Commissioner issues the statutory show-cause notice in Form XII after being satisfied that the dealer wilfully failed to apply for registration and after giving a reasonable opportunity of hearing. Preliminary internal steps taken before that notice do not start the assessment process. The three-year limitation is therefore counted from the expiry of the relevant period by reference to the notice date, and any assessment covering periods more than three years before the Form XII notice is outside the statutory limit.

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Issues: Whether, for assessment under section 11(5) of the C.P. and Berar Sales Tax Act, 1947, the three-year limitation period runs from the date on which the Commissioner first takes internal steps to examine accounts or from the date on which the show-cause notice in Form XII is issued.

Analysis: Section 11(5) requires the Commissioner to be satisfied that a dealer has wilfully failed to apply for registration and, before proceeding to assess, to give the dealer a reasonable opportunity of being heard. The provision therefore contemplates the issuance of a notice to show cause before assessment proceedings can be said to have commenced. Earlier steps taken before the notice do not amount to proceeding to assess. Since the statutory period of three years is to be counted from the expiry of the relevant period, assessment cannot be made for any period that expired more than three years before the notice in Form XII was issued.

Conclusion: The limitation period begins from the date of the Form XII notice, not from earlier preliminary action, and the assessment could not validly extend to periods outside three years from that date.

Final Conclusion: The impugned assessment was restricted to the period falling within the statutory limitation computed from the notice date, and the petitioner succeeded in obtaining relief against assessment beyond that limit.

Ratio Decidendi: Under section 11(5), assessment proceedings commence only upon issuance of the statutory show-cause notice after affording a reasonable opportunity of being heard, and limitation is computed from that notice date.

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