Reassessment under escaped turnover law depends on binding Supreme Court law, but limitation extension applies only to connected cases.

Section 12-A reassessment may be invoked where the assessing authority has reason to believe that turnover has escaped assessment, and a declaration of law by the Supreme Court can supply the basis for that jurisdiction under Article 141. The eight-year limitation runs from the expiry of the relevant year, but completion within that period is not required. The proviso extending time applies only to assessments or reassessments connected with the relevant assessee or case, and not merely because the legal principle arose in an unconnected proceeding.

---

---

Issues: (i) Whether notices under section 12-A of the Karnataka Sales Tax Act, 1957 could be sustained on the basis of the law declared by the Supreme Court and the binding effect of such declaration under article 141 of the Constitution of India. (ii) Whether the notices or proposed reassessment were barred by limitation under section 12-A(1), and whether the proviso in section 12-A(2) extended the limitation in the circumstances of the case.

Issue (i): Whether notices under section 12-A of the Karnataka Sales Tax Act, 1957 could be sustained on the basis of the law declared by the Supreme Court and the binding effect of such declaration under article 141 of the Constitution of India.

Analysis: The power to assess escaped turnover can be exercised where the assessing authority has reason to believe that turnover has escaped assessment or has been under-assessed. A declaration of law by the Supreme Court is binding under article 141 of the Constitution of India and can furnish the basis for invocation of reassessment jurisdiction. The proviso to section 12-A(2), however, was construed as operating in relation to the assessee or person concerned in the relevant assessment context, and not as a blanket extension for all third-party cases.

Conclusion: The assessing authority had jurisdiction to invoke section 12-A, and the notices were not invalid for want of jurisdiction.

Issue (ii): Whether the notices or proposed reassessment were barred by limitation under section 12-A(1), and whether the proviso in section 12-A(2) extended the limitation in the circumstances of the case.

Analysis: Section 12-A(1) prescribes eight years from the expiry of the year to which the tax relates for initiating action, and completion of assessment within that period is not required. The proviso to section 12-A(2) was held to extend the limitation only where the assessment or reassessment is made in consequence of, or to give effect to, a finding, direction, or order in the relevant case or against the relevant assessee or person. A judgment in another unconnected case does not automatically enlarge the limitation beyond section 12-A(1).

Conclusion: The limitation question was answered by confining the proviso to connected cases, and the petitioners were left to file objections before the authority for consideration in accordance with these observations.

Final Conclusion: The reassessment notices were upheld in principle, while the petitioners were relegated to the statutory objection process before the assessing authority.

Ratio Decidendi: Under section 12-A, binding declaration of law may justify reassessment, but the proviso extending limitation applies only to assessments or reassessments connected with the relevant assessee or case and not merely because a legal principle was declared in an unconnected proceeding.

---