Reassessment for wrongly allowed exemption and amended limitation rules were treated as procedural machinery under sales tax law.

Section 14(4) of the Andhra Pradesh General Sales Tax Act, as amended, empowered the assessing authority to reopen an assessment where an exemption had been wrongly allowed and to correct the tax liability directly. The amendment inserting clause (cc) was treated as enabling reassessment for such errors, rather than confining correction to revisional powers. Section 14(4-A), as substituted, prescribed a four-year limitation from service of the assessment order and was regarded as a procedural, machinery-oriented provision applicable to pending periods if the reassessment right had not already become time-barred. On that basis, reopening for the 1974-75 assessment was within jurisdiction and within time.

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Issues: (i) Whether the assessing authority had jurisdiction to reopen the assessment for the year 1974-75 on account of a wrongly allowed exemption. (ii) Whether the reassessment was barred by limitation and whether the amendment to section 14(4-A) operated retrospectively.

Issue (i): Whether the assessing authority had jurisdiction to reopen the assessment for the year 1974-75 on account of a wrongly allowed exemption.

Analysis: Under section 14(4) of the Andhra Pradesh General Sales Tax Act, 1957, as amended, the assessing authority was empowered to assess the correct amount of tax where a deduction or exemption had been wrongly allowed. The amendment inserted clause (cc) specifically authorising reopening in such cases. The assessment machinery under the Act was designed to quantify the tax liability created by the charging provision, and the amended provision enabled the assessing authority itself to correct an erroneous exemption instead of leaving the matter only to revisional powers.

Conclusion: The assessing authority had jurisdiction to reopen the assessment and withdraw the wrongly allowed exemption.

Issue (ii): Whether the reassessment was barred by limitation and whether the amendment to section 14(4-A) operated retrospectively.

Analysis: The Court held that no vested right to finality arose before the expiry of the period during which reassessment or revision could lawfully be made. Section 14(4-A), as substituted, prescribed four years from service of the assessment order, and the amended scheme aligned that limitation with the revisional period under section 20(3). The provision was treated as procedural and machinery-oriented, intended to make the tax charge effective, and therefore applicable to pending periods where the earlier limitation had not expired when the amendment came into force. Since the assessment order had been served on 11 August 1976 and the reassessment was made before expiry of four years from service, the action was within time. The authorities and precedents relied upon by the assessee were distinguished on the basis that they concerned cases where the right to reopen had already become time-barred before the amendment.

Conclusion: The reassessment was not barred by limitation and the amended limitation provision applied.

Final Conclusion: The revision failed because the reassessment was validly made by a competent authority within the operative limitation period under the amended statutory scheme.

Ratio Decidendi: An amendment to a tax statute that expands reassessment power and aligns limitation for a still-live assessment period operates on pending liabilities as a procedural machinery provision, so long as the right to reopen had not already become time-barred before the amendment came into force.

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