Tax-period-wise reassessment is mandatory where clubbing turnovers and single-month determination conflict with the statutory VAT scheme.

Section 40 of the Karnataka Value Added Tax Act, 2003 was treated as extending the reassessment period, so the limitation objection failed. The Court also noted that, even under the unamended position then applicable, the reassessment for the relevant period was not time-barred. However, reassessment had to follow the statutory tax-period structure, and where the VAT framework treats each calendar month as a tax period, clubbing turnovers across multiple periods and reassessing only March 2006 was inconsistent with the scheme. That defect rendered the reassessment unsustainable and required fresh tax-period-wise adjudication.

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Issues: (i) Whether the reassessment was barred by limitation under Section 40 of the Karnataka Value Added Tax Act, 2003. (ii) Whether the reassessment order could be sustained when the turnover for multiple tax periods was clubbed and reassessment was made for March 2006 alone instead of tax period-wise.

Issue (i): Whether the reassessment was barred by limitation under Section 40 of the Karnataka Value Added Tax Act, 2003.

Analysis: The substituted text of Section 40, as relied upon by the Court, provided extended periods for assessment and reassessment and was held to save the impugned order from being time-barred. The Court also held, independently, that even on the unamended position then applicable, the reassessment for the relevant period was not barred by limitation.

Conclusion: The limitation objection was rejected and the finding on limitation was upheld in favour of the Revenue.

Issue (ii): Whether the reassessment order could be sustained when the turnover for multiple tax periods was clubbed and reassessment was made for March 2006 alone instead of tax period-wise.

Analysis: The Court held that the tax period under the Karnataka Value Added Tax framework is a calendar month and that reassessment had to be made tax period-wise in accordance with the statutory scheme. The impugned reassessment proceeded by clubbing turnovers and by making the determination for March 2006 alone, which was treated as a violation of the governing statutory rules. On that ground, the appellate order and reassessment order could not be sustained and the matter had to be sent back for fresh adjudication.

Conclusion: The clubbing of turnovers was held impermissible and the matter was remanded to the assessing authority for fresh orders tax period-wise.

Final Conclusion: The assessee's challenge on limitation failed, while the revenue succeeded on the objection to the manner of reassessment, resulting in dismissal of the assessee's appeals, partial allowance of the revenue's cross appeals, and remand of the matter for fresh assessment in accordance with law.

Ratio Decidendi: Where the statute prescribes tax-period-wise reassessment, an order made by clubbing multiple periods and determining liability for a single month contrary to the statutory scheme is unsustainable, even if limitation is not a bar.

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