Reassessment notice within limitation is enough where the statute allows proceedings to be initiated before final completion.

Amended reassessment provisions under the Karnataka Sales Tax Act were treated as applicable to the assessment years in question because the amendment widened reassessment to cover wrong deductions or exemptions and operated with effect for assessments still within limitation. The phrase "proceed to assess or reassess" was construed to require only initiation of reassessment proceedings within the prescribed period, so service of notice in time preserved limitation even if the final order was made later. In the absence of any statutory deadline for completion after valid initiation, delay in concluding reassessment did not by itself invalidate the proceedings, particularly where the delay was explained by related litigation and unavailable records.

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Issues: (i) Whether amended section 12-A of the Karnataka Sales Tax Act, 1957 could be invoked for the assessment years in question; (ii) whether reassessment had to be completed within the limitation period or whether initiation of notice within that period was sufficient; (iii) whether delay in concluding the reassessment proceedings vitiated the notices and continuation of the proceedings.

Issue (i): Whether amended section 12-A of the Karnataka Sales Tax Act, 1957 could be invoked for the assessment years in question.

Analysis: The amended provision widened the scope of reassessment by expressly covering cases where deductions or exemptions had been wrongly allowed, even if the turnover had already been before the assessing authority at the original assessment. The amendment was treated as operating retrospectively in effect, at least for assessments still within the subsisting limitation period. The extension of the limitation period before expiry of the earlier period also preserved the Revenue's power to proceed.

Conclusion: The amended section 12-A could validly be applied against the assessee for the assessment years in question.

Issue (ii): Whether reassessment had to be completed within the limitation period or whether initiation of notice within that period was sufficient.

Analysis: The expression "proceed to assess or reassess" was construed to mean commencement of proceedings within time, not completion of the final order within that time. The issue of notice within the prescribed period was held to save limitation, and the later completion of reassessment was treated as valid. This interpretation was supported by the construction adopted in decisions of the Supreme Court on similar statutory language.

Conclusion: Issuance of notice within limitation was sufficient, and the final reassessment could be made after expiry of that period.

Issue (iii): Whether delay in concluding the reassessment proceedings vitiated the notices and continuation of the proceedings.

Analysis: In the absence of a statutory time-limit for completion after valid initiation, the Court declined to import a general rule that completion must occur within a reasonable time so as to defeat the Revenue's claim. The delay was explained by the pendency of connected proceedings and by the unavailability of records for part of the period. The assessee's own conduct in claiming exemption and litigating the same issue also weighed against granting equitable relief.

Conclusion: The delay did not invalidate the reassessment proceedings.

Final Conclusion: The reassessment notices and the continuation of proceedings were upheld, and the petitions were dismissed.

Ratio Decidendi: Where a reassessment provision authorises the authority to "proceed to assess or reassess" within a prescribed period, valid initiation of notice within that period is sufficient, and completion of the reassessment may follow thereafter; absent a statutory completion deadline, delay alone does not defeat a duly initiated tax reassessment.

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