Escaped assessment limits and retrospective amendments cannot revive time-barred tax reopening under revisional power.

Where a taxing statute provides a specific mechanism for escaped turnover, suo motu revisional power cannot be used to reopen the assessment in that field. The court treated the escaped-assessment provision as controlling and held that the revisional route was impermissible. It also held that an Explanation inserted by amendment was not retrospective, because the statute did not clearly express or necessarily imply such effect, and it could not validate a reopening for an earlier final assessment year. The reopening was further barred because the applicable limitation period had expired before proceedings began, and the later extension to five years could not revive a time-barred action.

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Issues: (i) Whether the suo motu revision initiated under the revisional power could validly be used to reopen an escaped assessment when the Act contained a specific provision for assessment of escaped turnover; (ii) Whether the amendment introducing an Explanation to the revisional provision operated retrospectively so as to validate the notice and order for the earlier assessment year; and (iii) Whether the reopening was barred by limitation under the provision in force for the relevant assessment year.

Issue (i): Whether the suo motu revision initiated under the revisional power could validly be used to reopen an escaped assessment when the Act contained a specific provision for assessment of escaped turnover.

Analysis: The statutory scheme distinguished between revisional power and the special machinery for escaped turnover. Where the Act specifically provided for assessment of escaped turnover under the relevant provision, the revisional jurisdiction could not be expanded to cover that field. The earlier Division Bench view on this point was accepted and applied.

Conclusion: The initiation of suo motu revision for reopening escaped assessment was impermissible.

Issue (ii): Whether the amendment introducing an Explanation to the revisional provision operated retrospectively so as to validate the notice and order for the earlier assessment year.

Analysis: A statutory amendment is ordinarily prospective unless retrospective effect is clearly expressed or necessarily implied. The Explanation inserted by the amending Act contained no such indication, and it could not be used to reopen an assessment for a period that had already become final before the amendment came into force.

Conclusion: The Explanation did not operate retrospectively and did not validate the impugned reopening.

Issue (iii): Whether the reopening was barred by limitation under the provision in force for the relevant assessment year.

Analysis: For the relevant assessment year, the governing provision prescribed a period of 36 months from the expiry of the year concerned. That period had expired long before the suo motu proceedings were initiated. The later amendment extending the period to five years was prospective and could not revive a time-barred proceeding.

Conclusion: The reopening was barred by limitation.

Final Conclusion: The notice initiating the suo motu revision and the consequential order were invalid, and the original assessment was left undisturbed.

Ratio Decidendi: Where a taxing statute contains a specific escaped-assessment provision with its own limitation period, revisional power cannot be used to reopen the assessment beyond that period, and a later amendment will not apply retrospectively unless the legislature clearly so provides.

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