Escaped assessment and retrospectivity under sales tax law: regular assessment under section 10 stood, and later limitation provision did not apply.
Assessment proceedings validly initiated under section 10(1)(b) and later continued by fresh best judgment assessment did not become escaped assessment under section 12 merely because the assessee failed to appear; the regular assessment route had already been invoked, so section 12 was inapplicable. A later inserted limitation provision, section 10-B, could not govern proceedings that had commenced before its insertion because no retrospective operation was shown. The appellate authorities' contrary view was set aside and the matter was remitted for reconsideration of the appeal on merits.
Issues: (i) Whether, on the facts of the case, the assessment could be treated as one made under section 12 of the Rajasthan Sales Tax Act, 1954 on the footing that the turnover had escaped assessment, or whether it was a valid assessment under section 10 of that Act; (ii) Whether section 10-B of the Rajasthan Sales Tax Act, 1954, inserted with effect from 7 April 1979, applied retrospectively to invalidate the assessment proceedings.
Issue (i): Whether, on the facts of the case, the assessment could be treated as one made under section 12 of the Rajasthan Sales Tax Act, 1954 on the footing that the turnover had escaped assessment, or whether it was a valid assessment under section 10 of that Act.
Analysis: The assessment proceedings had initially been commenced under section 10(1)(b), and the ex parte best judgment assessment was later set aside under section 10-C. Thereafter, the assessing authority again proceeded under section 10 and made a fresh best judgment assessment when the assessee did not appear. On these facts, it could not be said that no assessment under section 10(1)(b) had been made after the close of the accounting year. The case was therefore distinguishable from the earlier authority dealing with a situation where no return had been filed and no assessment had been made at all, which alone would attract section 12.
Conclusion: The assessment was not one falling under section 12 of the Rajasthan Sales Tax Act, 1954, and the appellate authorities were wrong in holding otherwise.
Issue (ii): Whether section 10-B of the Rajasthan Sales Tax Act, 1954, inserted with effect from 7 April 1979, applied retrospectively to bar the assessment.
Analysis: The proceedings under section 10(1)(b) had begun before the insertion of section 10-B. In the absence of retrospective operation, the newly inserted limitation provision could not govern proceedings that had already commenced earlier.
Conclusion: Section 10-B of the Rajasthan Sales Tax Act, 1954 had no retrospective application to the present assessment proceedings.
Final Conclusion: The revision succeeded, the orders of the appellate authorities were set aside, and the matter was sent back for restoration and fresh decision of the appeal on merits in accordance with law.
Ratio Decidendi: Where assessment proceedings have already been validly initiated and assessed under the regular assessment provision, a subsequent challenge cannot convert the matter into escaped assessment merely because the assessee did not appear, and a later inserted limitation provision will not apply retrospectively unless expressly so provided.
TaxTMI 
AI Drafter ✕
TaxTMI 
