Limitation for penalty under sales tax law requires actual imposition within the statutory period, not just issuance of notice.

Where the Tamil Nadu General Sales Tax Act prescribed a limitation period for imposing penalty under section 12(3), the penalty had to be actually levied within that period, not merely initiated by notice. The Madras HC noted that the relevant version of section 12 required penalty to be imposed within five years from the expiry of the assessment year. Because the penalty order was passed after that statutory limit, the levy was time-barred and could not be sustained.

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Issues: Whether the levy of penalty under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 was barred by limitation under the proviso to section 12(5) of the Act.

Analysis: The penalty proceedings had to conform to the statutory time-limit applicable to the assessment year in question. The Court noted that, on the relevant version of section 12, penalty ought to have been imposed within five years from the expiry of the relevant assessment year, and that mere issuance of a notice within time did not amount to imposition of penalty within the prescribed period. As the penalty order was made beyond the statutory limit, the proceedings could not be sustained.

Conclusion: The levy of penalty was held to be time-barred and unsustainable.

Final Conclusion: The assessment-related penalty was set aside and the revision was allowed in favour of the assessee.

Ratio Decidendi: Where a statute prescribes a period of limitation for imposing penalty, the penalty must be actually imposed within that period and not merely initiated by notice.

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