Limitation under sales tax reassessment excludes time spent in appellate and tribunal proceedings; best judgment assessment remitted for fresh hearing.

For limitation under Section 16 of the Tamil Nadu General Sales Tax Act, 1959, the period spent in earlier appeal, revisional or Special Tribunal proceedings must be excluded, so reassessment notices issued after such exclusion can remain in time. On best judgment assessment, the court noted the assessee had not produced books of account in the original proceedings, but allowed the proceedings to be treated as a show-cause notice so the assessee could file objections and supporting records. The assessment was therefore not quashed; it was remitted for fresh consideration in accordance with law after hearing the assessee.

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Issues: (i) Whether the reassessment was barred by limitation under Section 16 of the Tamil Nadu General Sales Tax Act, 1959. (ii) Whether the assessment made on best judgment basis required interference and fresh consideration.

Issue (i): Whether the reassessment was barred by limitation under Section 16 of the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The assessment proceedings were preceded by earlier assessment proceedings, appeal proceedings and proceedings before the Special Tribunal. Section 16(6) of the Act requires exclusion of the period during which the appeal or other proceedings remain pending before the appellate or revisional forum or the Special Tribunal. On exclusion of that period, the notice and subsequent reassessment action were within time.

Conclusion: The limitation plea was rejected and the reassessment was held to be within time.

Issue (ii): Whether the assessment made on best judgment basis required interference and fresh consideration.

Analysis: The assessee had not produced the books of accounts before the assessing authority, but sought an opportunity to establish that purchases were made from registered dealers. In view of the non-cooperation in the original proceedings and the request for an opportunity, the Court permitted the assessee to treat the impugned proceedings as a show cause notice and to file objections with supporting records, after which the assessment was to be redone in accordance with law.

Conclusion: The assessment was not quashed, but the matter was sent back for fresh consideration after hearing the assessee.

Final Conclusion: The writ petition was disposed of by upholding the action on limitation while granting the assessee an opportunity to contest the assessment before the authority and have the assessment reconsidered afresh.

Ratio Decidendi: For computing limitation under Section 16 of the Tamil Nadu General Sales Tax Act, 1959, the period during which proceedings are pending before appellate or revisional authorities or the Special Tribunal must be excluded.

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