Escaped assessment interpreted broadly, allowing reassessment where returned turnover was not properly taxed under the rule.

The expression "escaped assessment" was construed broadly to include turnover disclosed in a return that was not properly brought to tax. Rule 34(1) of the Mysore Sales Tax Rules, 1948 was held wide enough to permit assessment within the prescribed period even after a return had been filed, especially where the return was not accepted and tax was determined on a best-of-judgment basis. On that construction, the assessment was not barred by limitation under rule 34(1), and the contrary view of the tribunal was set aside.

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Issues: Whether the assessment for the relevant assessment year was barred by limitation under rule 34(1) of the Mysore Sales Tax Rules, 1948 on the ground that it was an escaped assessment.

Analysis: The challenge was confined to whether the impugned assessment could be treated as one in respect of turnover which had escaped assessment. The Court held that the expression "escaped assessment" is wide enough to cover cases where a return had been filed but the assessing authority failed to bring the assessable turnover to tax, and that the language of rule 34(1) was even wider than the corresponding provision considered by the Supreme Court. The assessment was not upheld on the footing of a voluntary return, because the return was not accepted and the tax was determined on a best of judgment basis.

Conclusion: The assessment was not barred by rule 34(1) and the revision on that point failed against the assessee.

Final Conclusion: The impugned assessment was sustained in law as an escaped-assessment proceeding within the scope of the rule, and the tribunal's contrary view was set aside.

Ratio Decidendi: The expression "escaped assessment" is construed broadly to include cases where turnover disclosed in a return is not properly brought to tax, and a provision framed in similar language authorises assessment within the prescribed period even after a return has been filed.

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