Limitation barred penalty proceedings where statutory time to commence action had expired, leaving the authority without jurisdiction.

Penalty proceedings for alleged unlawful collection of tax under the Tamil Nadu General Sales Tax Act were held to be time-barred because section 22(2), as then in force, required initiation within five years from the end of the year in which the amount was collected. As the collections related to assessment years 1985-86 and 1986-87, the limitation period expired in 1991 and 1992, while the penalty orders were passed only on 30.11.1998. The statutory time limit had therefore expired before action was taken, and the authority lacked jurisdiction to commence or sustain the penalty proceedings. The Tribunal's order was set aside and the revisions were allowed in favour of the assessee.

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Issues: Whether penalty proceedings for alleged unlawful collection of tax were barred by limitation under section 22(2) of the Tamil Nadu General Sales Tax Act.

Analysis: The proviso to section 22(2), as it then stood, required commencement of proceedings within five years from the expiry of the year in which the amount was collected. The collections related to the assessment years 1985-86 and 1986-87, so the limitation period expired in 1991 and 1992 respectively. The penalty orders were passed only on 30.11.1998, long after the statutory period had run out. Once the prescribed period expired, the authority lacked jurisdiction to initiate and sustain the penalty proceedings.

Conclusion: The penalty proceedings were barred by limitation and were without jurisdiction. The order of the Tribunal was set aside and the revisions were allowed in favour of the assessee.

Final Conclusion: The statutory time bar under section 22(2) defeated the levy of penalty, and the revisional challenge succeeded.

Ratio Decidendi: Where a statute prescribes a fixed period for commencement of penalty proceedings, action initiated after expiry of that period is void for want of jurisdiction.

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