Reasonable-time limit on tax recovery bars a decades-late demand where service of the assessment order was unproven.

A demand issued nearly 20 years after the relevant assessment years under the Tamil Nadu General Sales Tax Act was found unsustainable because statutory recovery or revisional powers must be exercised within a reasonable time. The materials were insufficient to prove valid service of the assessment order, and the unexplained delay meant the recovery action could not be treated as timely. The Madras HC therefore held the demand barred by limitation and invalid.

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Issues: Whether the demand raised nearly 20 years after the relevant assessment years, purportedly under Section 16 of the Tamil Nadu General Sales Tax Act, 1959, was barred by limitation and sustainable in law.

Analysis: The demand was challenged as having been issued after an inordinate delay and without proper notice or service of the assessment order. The Court found the materials on record insufficient to establish valid service and, in any event, held that recovery action initiated after about 20 years could not be treated as having been taken within a reasonable time. Relying on the principle that revisional or recovery powers must be exercised within a reasonable period, the Court concluded that the impugned demand was unsustainable.

Conclusion: The demand was held to be barred by limitation and invalid.

Ratio Decidendi: Statutory recovery or revisional action must be initiated within a reasonable time, and an inordinate unexplained delay can render the demand unsustainable as time-barred.

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