Limitation for penalty proceedings followed assessment limitation, making the sales tax penalty time-barred under the statute.

Penalty proceedings under the A.P. General Sales Tax Act were treated as ancillary to assessment, so the limitation governing assessment under section 14(1) applied equally to penalty under section 14(2). Because the assessment period had expired, the later penalty order could not survive on a supposedly independent footing. The High Court distinguished the Revenue's reliance on Supreme Court authority, noting that it concerned limitation by analogy in a different statutory context and did not displace the governing principle here. The penalty order dated 7 November 1975 was therefore barred by limitation.

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Issues: Whether the penalty imposed under section 14 of the A.P. General Sales Tax Act was barred by limitation.

Analysis: The relevant assessment year was 1964-65. The penalty was first levied, set aside in appeal, restored in revisional proceedings, remanded, and finally imposed again in 1975. The question was whether the period prescribed for making an assessment under section 14(1) could be applied to penalty proceedings under section 14(2). The Court followed its earlier view that penalty proceedings are not independent of the assessment process but are ancillary to it, and that when assessment itself is barred, the levy of penalty cannot survive on a higher footing. The Court also distinguished the Supreme Court decision relied upon by the Revenue, holding that it dealt with inferring limitation by analogy in a different statutory setting and did not displace the principle applicable here.

Conclusion: The penalty order dated 7 November 1975 was held to be barred by limitation and the revision failed.

Ratio Decidendi: Where penalty proceedings are ancillary to assessment proceedings, the limitation applicable to the assessment governs the penalty as well, and a period of limitation cannot be inferred or denied by treating the penalty as wholly independent of the assessment.

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