Limitation for penalty proceedings under sales tax law is mandatory, and later appeals do not extend the five-year period.

The proviso to section 22(2) of the Tamil Nadu General Sales Tax Act, 1959 bars initiation of penalty proceedings after five years from the date of the final assessment order, and that limit is mandatory. Later appellate proceedings do not extend or alter the statutory starting point for limitation. Section 9(2) of the Central Sales Tax Act, 1956 does not override the limitation governing the penalty machinery invoked under section 22(2). On these principles, the penalty proceedings were time-barred and could not be sustained.

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Issues: Whether the penalty proceedings initiated under section 22(2) of the Tamil Nadu General Sales Tax Act, 1959 were barred by limitation under the proviso thereto, and whether section 9(2) of the Central Sales Tax Act, 1956 could save the proceedings from that limitation.

Analysis: The proviso to section 22(2) expressly bars commencement of proceedings after five years from the date of the final assessment order. The final assessment had been completed long before the impugned notice and order, and the later appellate proceedings did not extend or shift the statutory starting point for limitation. The reference to section 9(2) of the Central Sales Tax Act, 1956 did not displace the limitation attached to the penalty machinery actually invoked under section 22(2), and the limitation under the proviso was treated as mandatory.

Conclusion: The penalty proceedings were barred by limitation and the impugned order could not be sustained.

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