Limitation and ex parte assessment: time-barred sales tax assessments were set aside, and one liability determination was remanded for hearing.

Assessments for 1990-91 and 1991-92 were held time-barred under section 11(2a) of the Bengal Finance (Sales Tax) Act, 1941 because they were completed after the statutory period, and an earlier notice or prior setting-aside order did not extend limitation. The second proviso to section 11(2a) was found inapplicable on the facts, so both assessments were set aside in favour of the assessee. For 1992-93, the ex parte assessment was set aside because the assessee had not been given a proper hearing on the question of liability, and the matter was remanded for fresh fixation of tax liability under section 4(2) read with section 4(4a), with liberty to proceed according to law if liability is established.

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Issues: (i) Whether the assessments for the periods 1990-91 and 1991-92 were barred by limitation under the Bengal Finance (Sales Tax) Act, 1941; (ii) Whether the ex parte assessment for the period 1992-93 was liable to be set aside and the matter remitted for fresh fixation of tax liability after hearing the assessee.

Issue (i): Whether the assessments for the periods 1990-91 and 1991-92 were barred by limitation under the Bengal Finance (Sales Tax) Act, 1941.

Analysis: The assessments had to be completed within the statutory period prescribed by section 11(2a). For 1991-92, the assessment was made after the limitation period had expired. For 1990-91, although notice under section 4(2) had earlier been issued, the assessment was completed beyond the permissible period and the earlier order setting aside the notices did not confer a fresh period for completing the assessment. The second proviso to section 11(2a) was held inapplicable on the facts.

Conclusion: The assessments for 1990-91 and 1991-92 were time-barred and were set aside in favour of the assessee.

Issue (ii): Whether the ex parte assessment for the period 1992-93 was liable to be set aside and the matter remitted for fresh fixation of tax liability after hearing the assessee.

Analysis: The assessment was completed ex parte, but the Tribunal declined to accept the contention that it was necessarily pre-dated merely because the demand notice was served later. At the same time, the assessee had not yet been afforded a proper opportunity on the substantive question of liability. The appropriate course was to set aside the ex parte assessment and require a fresh proceeding for fixation of liability under section 4(2) read with section 4(4a), after hearing the assessee.

Conclusion: The ex parte assessment for 1992-93 was set aside and the matter was remanded for fresh consideration, with liberty to proceed according to law if liability is found.

Final Conclusion: The assessee succeeded on limitation for two assessment years, while the third assessment was annulled and sent back for fresh adjudication on tax liability after due hearing.

Ratio Decidendi: An assessment completed beyond the statutory limitation cannot be saved by a prior procedural notice or by an earlier proceeding that did not itself determine the assessment, and where liability has not been properly determined after hearing, an ex parte assessment may be set aside for fresh fixation of liability.

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