Limitation and valid notice control reassessment: a barred tax assessment could not be revived by remand.

Assessment under section 12(4) of the Orissa Sales Tax Act had to be completed within the prescribed thirty-six months, and a remand could not authorise a barred reassessment. An order made without valid service of notice was jurisdictionally defective and liable to be vacated, but the third proviso to section 12(7) did not save a fresh assessment where the earlier proceeding itself was unlawful. The court therefore held that the matter could not be remitted for completion beyond limitation, while the assessment was not annulled entirely and was confined to the return figure.

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Issues: Whether, on the facts and in the circumstances of the case, the Tribunal was justified in remanding the matter for fresh assessment instead of annulling the entire assessment, having regard to limitation and absence of valid notice.

Analysis: Under section 12(7) of the Orissa Sales Tax Act, 1947, assessment under section 12(4) had to be completed within the prescribed period of thirty-six months. The assessment in question was already beyond time when the matter was remitted. The assessment order had been made without valid service of notice, and an order passed without notice is liable to be vacated because the defect goes to jurisdiction. Once the order is set aside for want of notice, the proceeding cannot be treated as a permissible fresh assessment protected by the third proviso to section 12(7), since that proviso applies only where a valid fresh assessment can be made after a lawful earlier proceeding. However, the absence of limitation for a completed assessment did not prevent acceptance of the return under section 12(1).

Conclusion: The remand for fresh assessment was not justified to the extent it sought to authorize a barred assessment, and the answer was returned in favour of the assessee to the extent that the assessment could not be completed beyond limitation, though the assessment was not to be annulled entirely and was confined to the return figure.

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