Mandatory notice period under tax law barred delayed assessment notices and prevented proceedings on the impugned notices.

Under the Assam Taxation (on Goods Carried by Road or on Inland Waterways) Act, 1961, service of notice within the prescribed two-year period was treated as a mandatory step for initiating valid assessment proceedings. Notices issued after expiry of that period were therefore unsustainable, and assessments could not proceed on those notices. The reasoning also examined whether injunctions or stay orders could extend time, and whether waiver or estoppel could defeat reliance on the limitation period; the dissent regarded the time bar as jurisdictional and relied on the escaped-assessment provision. The impugned notices failed, and the appeals were unsuccessful.

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Issues: Whether notices calling for returns under section 7(2) of the Assam Taxation (on Goods Carried by Road or on Inland Waterways) Act, 1961 were barred by limitation and whether the period was extended by court orders of injunction and stay; whether section 9(4) permitted best judgment assessment without a notice under section 7(2); and whether the respondents had waived or were estopped from relying on the statutory time limit.

Analysis: The statutory scheme required returns to be furnished under section 7 and empowered the Commissioner, in specified cases, to serve a notice within two years of the expiry of the return period. The notices in dispute were issued after that period had expired. The questions were whether the inability to issue notices during the pendency of injunctions could excuse compliance and whether the time limit was merely procedural or a jurisdictional restraint. The reasoning treated the statutory time limit as integral to the initiation of valid assessment proceedings. It also considered that where a party obtains an injunction that prevents the authority from acting within time, the party may be precluded from insisting on the benefit of the resulting impossibility, though the dissent viewed the time limit as a jurisdictional bar that could not be displaced by waiver or estoppel and relied on the separate escaped-assessment provision.

Conclusion: The notices were not sustainable and the assessments could not proceed on the impugned notices. The respondents were entitled to succeed.

Final Conclusion: The statutory time limit for initiating proceedings under the Act was decisive, and the impugned notices could not be upheld; the appeals therefore failed.

Ratio Decidendi: Where a taxing statute makes service of notice within a prescribed period the operative step for initiating assessment proceedings, compliance with that time limit is mandatory and cannot be displaced except by a legally recognised basis such as waiver where the statute permits it.

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