Limitation on escaped turnover reassessment bars reopening completed assessments and consequential denial of exemption.

A notice reopening a completed assessment and recomputing turnover after expiry of the statutory limitation for escaped turnover was unsustainable. The Madras HC held that the proposed re-determination of turnover and denial of exemption could not stand, especially where the same issue had already been covered by an earlier order and the respondent accepted the present notice was on the same footing. Reference to possible penal action did not cure the defect, because criminal or penal consequences require a valid determination of escapement within the prescribed time. The impugned notice was quashed and the writ petition was allowed in favour of the assessee.

---

---

Issues: Whether the impugned notice demanding tax and interest for earlier assessment periods under the Puducherry Value Added Tax Act, 2007 read with the Central Sales Tax Act, 1956 could survive when the proposed re-computation of turnover and denial of exemption were already covered by an earlier order and were beyond the statutory period of limitation.

Analysis: The notice sought to reopen a completed assessment and recompute turnover long after the expiry of the limitation prescribed for escaped turnover. The same challenge had already been dealt with in the earlier order relied upon by the Court, and the respondent accepted that the present notice stood on the same footing. The Court applied its earlier reasoning and held that the re-determination of turnover and the consequential denial of exemption were unsustainable. The reference to possible penal action did not cure the defect, because criminal consequence presupposes a valid determination of escapement within the statutory time frame. Since that prerequisite was absent, the notice could not be sustained.

Conclusion: The impugned notice was quashed and the writ petition was allowed in favour of the assessee.

Ratio Decidendi: A notice seeking to reopen assessment and deny exemption after expiry of the statutory limitation for determination of escaped turnover is unsustainable, and any penal consequence based on such notice cannot arise without a valid and timely determination.

---