1983 (7) TMI 282 - HC - VAT and Sales Tax

Limitation period for tax reassessment starts from original assessment, not reassessment. Court quashes reassessment notice.

The Court held that the reassessment notice issued after the expiration of five years from the original assessment was without jurisdiction. The Court ... - Issues: Jurisdiction to issue reassessment notice after the expiry of five years from the date of original assessment.Analysis:The case involved a petition under article 226 of the Constitution of India regarding reassessment by the assessing authority under the M.P. General Sales Tax Act, 1958. The petitioner, a partnership firm, challenged the jurisdiction of the respondent to issue a reassessment notice after the expiry of five years from the original assessment. The respondent had issued a notice for reassessment after restoring the original assessment order dated 13th February, 1975. The petitioner contended that the notice issued in December 1981 was beyond the limitation period. The respondent argued that the period of limitation should commence from the date of the order restoring the original assessment, i.e., 3rd May, 1977. The petitioner relied on a previous court decision to support their argument.The Court considered the arguments presented by both parties and focused on the interpretation of the term 'order of assessment' in section 19(1) of the Act. The Court referred to a previous decision and agreed that the term does not include a reassessment order. The Court distinguished another case cited by the respondent, where the issue of reassessment and limitation did not directly arise. The Court held that for initiating reassessment proceedings, the time should start from the date of the original assessment order, not the date of reassessment. Therefore, the Court concluded that the reassessment proceedings initiated by the notice in December 1981 were without jurisdiction.Consequently, the Court allowed the petition, quashed the notice dated 26th December, 1981, along with the reassessment proceedings and order. The parties were directed to bear their own costs, and any security amount was to be refunded to the petitioner.