Escaped turnover cannot be first assessed in revision, and limitation for escaped assessment still applies.

Section 34 revisional power could not be used to make a first-time assessment of escaped turnover that had never formed part of the original assessment or appellate proceedings; assessment of escaped turnover lay under section 16, and the revisional authority could not assume the assessing authority's function. The court also held that the limitation for escaped assessment under section 16(1) applied to any proceeding to tax such turnover, including where revision was invoked, and the notice issued after expiry of the prescribed period was time-barred. The revision was therefore unsustainable on both jurisdiction and limitation, and the assessment of the alleged escaped turnover was set aside.

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Issues: (i) Whether the Joint Commissioner could, in exercise of suo motu revisional powers under section 34, bring to tax for the first time escaped turnover that had not formed part of the original assessment or the appellate proceedings; (ii) Whether proceedings to tax the alleged escaped turnover were barred by the limitation prescribed for escaped assessment.

Issue (i): Whether the Joint Commissioner could, in exercise of suo motu revisional powers under section 34, bring to tax for the first time escaped turnover that had not formed part of the original assessment or the appellate proceedings.

Analysis: The revisional power under section 34 is confined to examining and revising orders already in existence and cannot be used to create, for the first time, an original assessment on escaped turnover. The power to assess escaped turnover lies under section 16, and the revisional authority cannot assume the function of the assessing authority where the escaped turnover was never the subject of the assessment or appeal.

Conclusion: The issue was decided in favour of the assessee. The Joint Commissioner had no jurisdiction under section 34 to assess the alleged escaped turnover for the first time.

Issue (ii): Whether proceedings to tax the alleged escaped turnover were barred by the limitation prescribed for escaped assessment.

Analysis: The limitation governing escaped assessment under section 16(1) applies to all proceedings to assess escaped turnover, including where revisional jurisdiction is invoked. On the facts, the notice under section 34 was issued after the expiry of the permissible period, and the escaped turnover could not be brought to tax beyond that period.

Conclusion: The issue was decided in favour of the assessee. The proceedings were time-barred under section 16(1).

Final Conclusion: The order of revision could not be sustained either on jurisdictional grounds or on limitation, and the assessment of the alleged escaped turnover was set aside.

Ratio Decidendi: Revisional power cannot be used to make an original assessment of escaped turnover, and the statutory limitation for escaped assessment applies to any authority proceeding to assess such turnover.

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