Penalty proceedings without express statutory time-limit remain valid despite delay when the assessment period has expired.

Penalty proceedings are not time-barred merely because they were initiated after the assessment limitation period where the statute and rules prescribe no express limit for such action. The Court refused to read an implied limitation into section 9-B(3) of the Orissa Sales Tax Act, holding that legislative silence cannot be filled by judicial construction. While prolonged inaction by the authority may in some cases be challengeable on other grounds, delay alone does not invalidate the penalty proceedings. The reference was answered in favour of the revenue and against the dealer, and the penalty action was held maintainable.

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Issues: Whether penalty proceedings under section 9-B(3) of the Orissa Sales Tax Act, 1947 could be initiated after the period prescribed for assessment proceedings in the absence of any express limitation in the Act and the Rules.

Analysis: The Act contained no specific time-limit for initiation of penalty under section 9-B(3). The absence of an express limitation did not justify reading one into the statute. Though prolonged inaction by the authority may be open to challenge on appropriate grounds, the Court could not supply a limitation period that the Legislature had not enacted. Support was drawn from the principle applied in construing penalty proceedings under section 28(1)(c) of the Income-tax Act, 1922, where delay alone was held not to invalidate the proceedings in the absence of an express statutory bar.

Conclusion: The question was answered in the affirmative against the dealer. Penalty proceedings initiated beyond three years from the assessment period were maintainable because no express limitation governed such proceedings under the Act and the Rules.

Final Conclusion: The reference was disposed of by holding that the penalty proceedings were not time-barred merely because they were commenced after the assessment limitation period.

Ratio Decidendi: A limitation period for penalty proceedings cannot be implied merely from the existence of a limitation period for assessment proceedings; where the statute does not expressly prescribe a time-limit, delay by itself does not invalidate the penalty action.

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