Deemed assessment and strict limitation barred reassessment notices where statutory exclusion of time was not satisfied.

Deemed assessment under the Tamil Nadu Value Added Tax Act triggered the limitation period for reopening, so reassessment notices issued after the statutory period were time-barred and liable to be quashed. The exclusion of time under the limitation provision was unavailable because it applies only when a relevant appeal or other proceeding involving a question of law with direct bearing on the assessment is actually pending in the same matter; pendency of a different case did not extend time. The document states that reassessment must comply strictly with the statutory timetable once deemed assessment operates.

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Issues: (i) whether the impugned notices for reassessment were barred by limitation in view of the deemed assessment under the Tamil Nadu Value Added Tax Act, 2006; (ii) whether the pendency of proceedings in another matter before the High Court could be treated as a ground to exclude time under the limitation provision.

Issue (i): whether the impugned notices for reassessment were barred by limitation in view of the deemed assessment under the Tamil Nadu Value Added Tax Act, 2006.

Analysis: By virtue of the amendment to Section 22(2), returns for the relevant assessment years were deemed to have been assessed on 30.06.2012 where no assessment order had been passed. Once such deemed assessment came into existence, any action to revise or reopen the assessment had to be taken within the limitation framework under Section 27. The notices were issued long after the expiry of the prescribed period, and no valid basis for extending limitation was established on the record.

Conclusion: The notices were time-barred and liable to be quashed, in favour of the assessee.

Issue (ii): whether the pendency of proceedings in another matter before the High Court could be treated as a ground to exclude time under the limitation provision.

Analysis: The exclusion under Section 27(7) applies only where an appeal or other proceeding in respect of an assessment or reassessment involving a question of law having a direct bearing on the assessment in question is pending. The Court found that no such proceeding was pending at the instance of the assessee, and the Department's reliance on another appeal pending in a different matter did not justify exclusion of time in the present case. The Department was therefore required to issue notice within the statutory period without waiting upon that separate litigation.

Conclusion: The claimed exclusion of time was not available, in favour of the assessee.

Final Conclusion: The reassessment notices could not be sustained under the statutory limitation scheme and were set aside, resulting in allowance of the writ petitions.

Ratio Decidendi: Where reassessment is sought after a deemed assessment has come into force, limitation must be computed strictly under the reassessment provision, and exclusion of time is available only when the statutory conditions for such exclusion are actually satisfied in the case concerned.

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