Escaped assessment limitation runs from end of assessment year, and Rule 17 remains within delegated power.

Rule 17 of the Madras General Sales Tax Rules, 1939 permits assessment of escaped turnover within three years next succeeding the year to which the tax relates, so the limitation runs from the end of the assessment year, not from its commencement. The rule was also held to be within the rule-making power under section 19(2)(f) of the Madras General Sales Tax Act, 1939, because it stays within the statutory maximum of three years and does not enlarge the prescribed period. The rule was therefore treated as valid and consistent with the enabling Act.

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Issues: (i) Whether, for escaped assessment under rule 17 of the Madras General Sales Tax Rules, 1939, the three-year limitation period begins from the commencement of the assessment year or from its end; (ii) whether rule 17 is beyond the rule-making power conferred by section 19(2)(f) of the Madras General Sales Tax Act, 1939.

Issue (i): Whether, for escaped assessment under rule 17 of the Madras General Sales Tax Rules, 1939, the three-year limitation period begins from the commencement of the assessment year or from its end.

Analysis: The language of rule 17 states that assessment of escaped turnover may be made within three years next succeeding the year to which the tax relates. The limitation is therefore linked to the point of time when the assessment could have been made, and not to the beginning of the assessment year. Since the assessment for the relevant year could have been made up to the close of that year, the period of three years runs from the end of the assessment year.

Conclusion: The limitation period begins from the end of the assessment year, not from its commencement.

Issue (ii): Whether rule 17 is beyond the rule-making power conferred by section 19(2)(f) of the Madras General Sales Tax Act, 1939.

Analysis: Section 19 empowers the State Government to make rules for assessment of escaped turnover and to prescribe the period within which such assessment may be made, subject to a maximum of three years. Rule 17 conforms to that statutory delegation because it fixes a three-year period from the time when assessment could lawfully be made. It does not enlarge the period beyond the statutory limit and is not repugnant to the Act.

Conclusion: Rule 17 is within the rule-making power under section 19(2)(f) and is valid.

Final Conclusion: The revision failed on both grounds, and the assessment rule was upheld.

Ratio Decidendi: Where a taxing rule authorises escaped assessment within a specified period, the limitation runs from the last point when the assessment could have been made during the assessment year, and a rule fixing a period within the statutory maximum is intra vires the enabling provision.

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