Retrospective limitation amendment cannot revive a time-barred reassessment once the assessment has already become closed.

Retrospective enlargement of a limitation period could not revive a reassessment that had already become time-barred under the unamended Karnataka Value Added Tax Act, 2003. The court reasoned that, once the reassessment period for the assessment year 2005-06 had expired, a vested right accrued to the assessee, and a procedural amendment could not take away that accrued protection or reopen a closed assessment. The reassessment order was therefore barred by limitation and could not be sustained.

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Issues: Whether the reassessment order for the assessment year 2005-06 was barred by limitation and whether the retrospective amendment to the limitation provision could revive a time-barred assessment.

Analysis: The limitation scheme under Section 40 of the Karnataka Value Added Tax Act, 2003 originally prescribed the period within which reassessment under Section 39 could be made. On the relevant dates, the reassessment period for the assessment year 2005-06 had already expired under the unamended provision. The later amendments enlarged the limitation period and were given retrospective effect, but a vested right had already accrued to the assessee when the claim became time-barred. A retrospective amendment in procedural law cannot revive a barred liability or take away an accrued vested right. The reasoning accepted that limitation may generally operate retrospectively, but not so as to reopen a closed and barred assessment.

Conclusion: The reassessment order was barred by limitation and could not be sustained. The challenge succeeded in favour of the assessee.

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