Time-barred reopening of a completed sales tax assessment fails where escaped turnover was not validly determined within limitation.

A completed sales tax assessment cannot be reopened by a notice issued beyond the statutory limitation for escaped turnover. After verification of the accounts and supporting documents, the assessee's original assessment had been finalised, and the later notice sought to recompute turnover, deny the concessional CST benefit, and raise tax with interest. As the five-year limitation under the Puducherry General Sales Tax Act, 1967 had already expired, the notice could not bypass the statutory bar or substitute for a fresh assessment. The proposed criminal consequences also failed because valid determination of escapement within time was a necessary precondition. The notice was quashed as time-barred and unsustainable.

---

---

Issues: Whether a notice seeking to recompute turnover and deny concessional tax benefit for the assessment year 2003-04 was valid when issued long after the original assessment and beyond the limitation period.

Analysis: The original assessment had already been completed after verification of the accounts and supporting documents. The impugned notice attempted to reopen the settled assessment, recompute turnover, reject the claimed exemption under the Central Sales Tax regime, and demand tax with interest. Section 18 of the Puducherry General Sales Tax Act, 1967 prescribed a five-year limitation for assessment of escaped turnover, which had expired much earlier than the impugned notice. A notice of this nature could not validly bypass the statutory bar or substitute an assessment in the guise of a notice. The proposed criminal consequences also could not survive because determination of escapement within the prescribed limitation was a necessary precondition.

Conclusion: The notice was held to be invalid and was quashed. The challenge succeeded in favour of the assessee.

Final Conclusion: The reassessment attempt and consequential demand were set aside for being time-barred and legally unsustainable.

Ratio Decidendi: A completed sales tax assessment cannot be reopened by a demand notice beyond the statutory limitation for escaped turnover, and criminal consequences predicated on such escapement cannot be pursued unless the escapement is first validly determined within time.

---