Reasonable time governs penalty notices under tax law; unexplained delay can make stale proceedings vulnerable to writ relief.

Even where section 28 of the Income-tax Act, 1922 prescribed no express limitation for penalty proceedings, the power had to be exercised within a reasonable time. An unexplained and inordinate delay in issuing a penalty notice was treated as an abuse of power because stale proceedings could prejudice the assessee by limiting the ability to respond effectively. On the facts, the long departmental inaction and the gap between the notices were not reasonably justified, so the delayed penalty proceedings were invalid and liable to be quashed in writ jurisdiction.

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Issues: Whether a notice for penalty under section 28 of the Income-tax Act, 1922, issued after an inordinate and unexplained lapse of time was valid and could be quashed in writ jurisdiction.

Analysis: No period of limitation was prescribed for issuing a penalty notice under section 28, but the notice had to be issued within a reasonable time. The Court held that a notice issued after an unreasonable lapse of time would amount to an abuse of power, because stale proceedings could prejudice the assessee by depriving him of material necessary to show cause. On the facts, the gap between the original notice and the later notices was not reasonably explainable, and the departmental inaction between 1949 and 1956 furnished no valid justification.

Conclusion: The delayed penalty proceedings were invalid and liable to be quashed; the decision was in favour of the assessee.

Final Conclusion: The special appeal failed, and the writ protection granted against the penalty proceedings was upheld.

Ratio Decidendi: Even where a statute prescribes no express limitation for initiating penalty proceedings, the power must be exercised within a reasonable time, and an unexplained stale notice is an abuse of power amenable to writ interference.

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