Limitation for escaped-assessment proceedings remains confined to the statutory initiation period, despite extended assessment timelines.

The five-year limitation under Section 25(1) of the Kerala Value Added Tax Act governs the initiation of proceedings for escaped turnover, and a provision extending the time for completion of assessment does not, by itself, extend that initiation period. Because the pre-assessment notice was issued after expiry of the five-year limit, the proceedings were beyond limitation. The resulting assessment order and demand notice were therefore unsustainable and were set aside on that ground.

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Issues: Whether the pre-assessment proceedings and the consequent demand under Section 25(1) of the Kerala Value Added Tax Act were barred by limitation, and whether Section 25B extended the period for initiation of such proceedings.

Analysis: The limitation of five years under Section 25(1) governs the initiation of proceedings for determining escaped turnover. The extended period for completion of assessment contemplated by Section 25B does not enlarge the time available for commencing proceedings under Section 25(1). Since the pre-assessment notice was issued after expiry of the five-year period, the initiation of proceedings was beyond limitation. The demand founded on such proceedings could not survive.

Conclusion: The issue is answered in favour of the assessee. The proceedings were time-barred, and the assessment order and demand notice were unsustainable.

Final Conclusion: The writ petition succeeds, and the impugned assessment and demand are set aside on the ground of limitation.

Ratio Decidendi: A provision extending the time for completion of assessment does not, by itself, extend the statutory period for initiating reassessment or escaped-assessment proceedings unless the statute expressly so provides.

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