Retrospective enlargement of assessment limitation upheld where fiscal limitation was treated as part of the assessment machinery.

Limitation for completing fiscal assessments under the Karnataka Sales Tax Act was treated as part of the assessment machinery, not a vested immunity for the assessee. Because the amended proviso to section 12(5) extended the time for assessments relating to years ending before 1 August 1985, and the later retrospective amendment expressly deemed the substituted provisos always to have been in force, the assessment completed on 17 January 1989 was within the lawfully enlarged period. The court therefore held that retrospective enlargement of limitation was validly applicable and the plea that the assessment was time-barred failed.

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Issues: Whether the assessment order was barred by limitation under section 12(5) of the Karnataka Sales Tax Act, 1957, and whether the retrospective enlargement of limitation by the amending law could validly apply to the assessment proceedings.

Analysis: Limitation for completion of assessments was first introduced into the State Act by the Karnataka Sales Tax (Amendment) Act, 1985, which came into force on 1 August 1985. For assessment proceedings relating to a year ending before that commencement, the amended proviso allowed completion within four years from such commencement. The assessment in question related to 1982-83 and was completed on 17 January 1989, which was within that extended period. The later amendment retrospectively substituted the provisos and declared that they were always deemed to have been inserted, thereby enlarging the time available for completion of assessment. The Court applied the principle that limitation under fiscal statutes is part of the assessment machinery and may be extended retrospectively by clear legislative mandate, even after the earlier period has expired.

Conclusion: The assessment was not time-barred, and the retrospective enlargement of limitation was validly applicable; the plea of limitation failed.

Final Conclusion: The revision petition was rejected because the impugned assessment was held to have been completed within the lawfully extended limitation period.

Ratio Decidendi: A period of limitation governing fiscal assessment is a procedural fetter on the assessing authority and does not create a vested immunity in favour of the assessee; the Legislature may retrospectively enlarge that period by clear words, and such enlargement applies to the assessment if the statutory command is express enough.

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