Escaped assessment limitation: a composite sales tax notice covering time-barred and valid periods was held invalid and quashed.

A notice under section 10(2) of the Rajasthan Sales Tax Act, 1954 could be issued only where a return had been filed under section 7(1). If no return was filed and no assessment had been made, the turnover was treated as escaped assessment, so section 12(1) applied and the eight-year bar in section 12(2) governed the notice period. The court also treated escaped assessment as covering cases where no assessment proceedings were ever initiated. A composite notice covering both time-barred years and years still within limitation was therefore invalid and was quashed, while fresh notice for periods within limitation remained permissible.

---

---

Issues: Whether a notice issued under section 10(2) of the Rajasthan Sales Tax Act, 1954 could validly cover a period for which no return had been filed and no assessment made, and whether such a composite notice including years beyond the eight-year limitation was sustainable.

Analysis: A notice under section 10(2) could be issued only where a return had been filed under section 7(1). Where no return was filed and no assessment had been made, the turnover was treated as having escaped assessment, attracting section 12(1). Section 12(2) barred issuance of notice under section 12(1) after eight years from the end of the relevant assessment year. The Court held that escaped assessment includes cases where no assessment proceedings were initiated at all, and therefore the limitation under section 12(2) applied. Since the notice covered both time-barred years and years within limitation, it could not stand as a composite notice.

Conclusion: The composite notice was invalid and was quashed. The matter was decided in favour of the assessee, though liberty was left to the assessing authority to issue a fresh notice for periods within limitation.

Final Conclusion: The writ petition succeeded because the assessment notice could not lawfully include periods beyond the statutory limitation for escaped turnover.

Ratio Decidendi: Where no return has been filed and no assessment has been made, the case is one of escaped assessment governed by the limitation for escaped turnover notices, and a composite notice covering both time-barred and permissible periods is invalid.

---