Doctrine of merger in assessment rectification: limitation for revision runs from the operative rectified order.

Rectification of an assessment under the Karnataka Sales Tax Act was held to form part of the assessment process, and the rectified order was treated as superseding the original assessment order. Applying the doctrine of merger, the court held that the original order could not be isolated for computing limitation in revision under section 21(2). Limitation was therefore to be counted from the operative rectified assessment order, and the contention that the revisional proceedings were time-barred was rejected.

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Issues: Whether, after rectification of an assessment under section 25A of the Karnataka Sales Tax Act, 1957, the rectified order replaces the original assessment order for the purpose of limitation in revision under section 21(2) of the Act.

Analysis: The rectification proceedings were held to be part of the assessment proceedings, and the effect of rectification was to alter the taxable turnover comprised in the assessment. The order passed on rectification was treated as replacing the original assessment order. On that basis, the doctrine of merger was applied, so that the original assessment order could not be isolated from the later rectified order for the purpose of computing limitation. The challenge that the revisional proceedings were time-barred was therefore rejected.

Conclusion: The rectified assessment order superseded the original assessment order, and the revisional proceedings were within limitation.

Ratio Decidendi: When an assessment is rectified in the course of assessment proceedings, the rectified order merges with and replaces the original assessment order, and limitation for revision is to be computed from the operative rectified order.

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