Best judgment and escaped-assessment limits under sales tax law: six-year limitation also governs ancillary penalty proceedings.

Where no return is filed under the Andhra Pradesh General Sales Tax Act, best judgment assessment falls under the non-filing provision, while escaped turnover may still be assessed under the escaped-assessment provision because the two operate in different fields. The limitation for escaped-assessment proceedings is six years, not four years, and that period governs the associated penalty proceedings as well. The penalty power is ancillary to the escaped-assessment process, so it cannot be exercised later on an open-ended basis. The amended penalty provision applicable when the proceedings were initiated governed the matter, and the penalty challenge failed.

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Issues: (i) Whether, in a case where no return is filed, the assessment is governed by section 14(3) of the Andhra Pradesh General Sales Tax Act, 1957 or by section 14(4), and whether the period of limitation is four years or six years. (ii) Whether the penalty proceedings under section 14(4) are governed by the same six-year period of limitation and whether the amended penalty provision applies.

Issue (i): Whether, in a case where no return is filed, the assessment is governed by section 14(3) of the Andhra Pradesh General Sales Tax Act, 1957 or by section 14(4), and whether the period of limitation is four years or six years.

Analysis: Section 14(3) specifically deals with cases where no return is submitted and authorises best judgment assessment within four years from the expiry of the assessment year. Section 14(4) deals with a different field, namely escaped assessment, under-assessment, or assessment at a rate lower than the correct rate. The two provisions operate in different legislative spheres and do not conflict. A construction that makes section 14(3) redundant is impermissible. The special provision must prevail over the general provision only where both govern the same subject-matter, which is not the position here. The authority therefore retained power under section 14(4) where turnover had escaped assessment, even though no return had been filed.

Conclusion: In a case of non-filing of return, section 14(3) governs the primary best judgment assessment, but section 14(4) remains available where there is escaped assessment; the six-year period applies to proceedings under section 14(4).

Issue (ii): Whether the penalty proceedings under section 14(4) are governed by the same six-year period of limitation and whether the amended penalty provision applies.

Analysis: The power to levy penalty under section 14(4) is ancillary to the power to assess escaped turnover and is exercised as part of the same statutory scheme. If the assessment itself can be initiated only within six years, it would be inconsistent to permit penalty proceedings at an indefinite later stage. The limitation applicable to the escaped-assessment proceeding therefore extends to the penalty proceeding as well. The amended penalty rate in force when the assessment and penalty proceedings were initiated governs the matter.

Conclusion: The penalty proceedings were within time and the amended penalty provision applied; the challenge to penalty failed.

Final Conclusion: The writ petitions failed because the impugned assessment and penalty proceedings were initiated within the permissible period under the escaped-assessment provision, and no jurisdictional error was shown.

Ratio Decidendi: Where a sales tax statute separately provides for best judgment assessment for non-filing of returns and for escaped assessment, the escaped-assessment provision may still be invoked if turnover has escaped assessment, and the limitation attached to that provision governs both assessment and the ancillary penalty arising from it.

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