Reasonable time for tax proceedings under Section 67 upheld; limitation challenge failed on detection-based chronology.

Where Section 67 of the Kerala Value Added Tax Act does not prescribe a fixed limitation period, proceedings must still be initiated and completed within a reasonable time measured from detection of the offence. The Court applied this principle and held that, on the facts, summons, verification of records, and later notices showed that the offence was detected within a proximate period and the delay was satisfactorily explained. The limitation challenge therefore failed, and the proceedings were held not to be time-barred.

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Issues: (i) Whether the proceedings initiated under Section 67 of the Kerala Value Added Tax Act, 2003 were barred by limitation or unreasonable delay.

Issue (i): Whether the proceedings initiated under Section 67 of the Kerala Value Added Tax Act, 2003 were barred by limitation or unreasonable delay.

Analysis: The limitation question was examined in the light of the statutory history of Section 67 and the earlier holding that, even where no express period survives in the statute, the proceedings must be completed within a reasonable time. The Court applied the principle that the starting point is the detection of offence, but the detection must itself occur within a proximate period from inspection or verification. On the facts, summons had been issued to several dealers in 2012 and 2013, large volumes of records were verified, and the offence, at least in relation to the selling dealer, was detected on 30.09.2014. The subsequent notices and impugned orders against the petitioners were treated as arising within the permissible period and the delay was held to be satisfactorily explained.

Conclusion: The challenge on limitation failed and the proceedings were held not to be time-barred.

Final Conclusion: The writ petitions did not succeed on merits and the petitioners were relegated to the statutory appellate remedy.

Ratio Decidendi: Where the statute does not prescribe a fixed period for initiation under Section 67, the proceedings must be commenced and concluded within a reasonable time measured from the date of detection of offence, and a delay is not fatal if the finalisation is still within that reasonable period.

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