TaxTMI 
TaxTMI 
1998 (8) TMI 547
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....r S.Y. 2029 and 2030 on October 24, 1976 and January 23, 1977 respectively, by the Sales Tax Officer. For the S.Y. 2032, the assessment was made on January 31, 1978. In respect of these three years, the Sales Tax Officer, Enforcement Branch, Surat, issued a notice under section 44 of the Gujarat Act for reassessment of sales tax on October 7, 1978, which was served on the petitioner on October 10, 1978. According to the petitioner, objections were raised on various grounds against that notice. The third respondent prepared a draft reassessment order under section 46A(2) of the Gujarat Act, read with section 9(2) of the Central Act, in respect of all these three years and forwarded them to the first respondent. The first respondent passed the assessment orders on April 31, 1985 confirming the draft reassessment order and served the orders on the petitioner on September 14, 1985 with the notice of demand dated September 12, 1985. 3.. As regards the assessment periods of S.Y. 2033 and 2034, according to the petitioner, the last dates by which the assessment orders could have been passed under section 42 of the Gujarat Act were November 7, 1980 and October 27, 1981 respectively. Acc....
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....ubmitted that it is only when the proceedings were transferred to the authority to which an appeal would lie and received by it that the authority will be in a position to exercise its power of reassessment under section 44 of the Act. Therefore, the period of limitation should be computed from the date of service of the draft order. It was further argued that the stay orders were granted in all these cases for valid reasons and were not objected to at the relevant time until the making of the assessment order. It was submitted that the petitioners, therefore, should not be allowed to challenge the validity of the orders. 6.. Before appreciating the rival contentions raised, we may refer to the Gujarat Sales Tax Act, 1969, which were in force at the relevant time. The timelimit for completing assessment is provided in section 42 of the said Act, which reads as under: "42. (1)(a) No order of assessment for a year or part of a year shall be made under sub-section (3) or (4) of section 41 at any time after the expiry of three years from the end of year in which the last monthly, quarterly or as the case may be, annual return is filed. (b) Where the Commissioner issues a notic....
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....the period to which such turnover relates, serve on the dealer liable to pay tax in respect of such turnover, a notice containing all or any of the requisitions which may be included in a notice in the prescribed manner and assess, not later than three years from the date of service of the notice, the amount of tax due from such dealer to the best of his judgment: Provided that the amount of tax shall be assessed at the rates at which it would have been liable to tax had there been no escapement of assessment but after making deductions (if any) permitted from time to time by or under this Act: Provided further that where in respect of such assessment, proceedings are pending in appeal or revision, the appropriate appellate or revisional authority under this Act may, on its own motion or on the report of the Commissioner after giving the dealer concerned a reasonable opportunity of being heard, pass such order as it deems fit: Provided further that the provisions of all provisos to sub-section (1) of section 42 shall mutatis mutandis apply to assessment proceedings under this section." 8.. The provisions dealing with cases where a draft order is required to be prepared, ob....
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....te of service of the draft order, the authority shall make an order of assessment or, as the case may be, an order imposing penalty under section 41, 44, 45 or as the case may be, 46 in accordance with the draft order." 9.. It will be noted from the aforesaid provisions that the time-limit prescribed for completion of an assessment was, at the relevant time, three years from the end of the year in which the last monthly, quarterly, or as the case may be, annual return is filed. In view of this provision, the learned counsel for the petitioner fairly submitted that the contention that the assessments in respect of S.Y. 2033 and 2034 were time-barred was made on the footing that the period of limitation was two years, but that was a wrong assumption, since in reality as per the provision existing then, it was three years to be calculated from the end of the year in which the annual return was filed. Accordingly, for the S.Y. 2033 since the last return was filed in S.Y. 2034, the end of S.Y. 2034 would be the date from which period of three years was required to be computed, which would end on the last day of S.Y. 2037. In the same way, the period in respect of S.Y. 2034 for making....
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....e after the period of expiry of limitation staying the assessment proceedings cannot relate back to revitalise the proceedings. At the expiry of the period of three years from the dates stipulated in section 42(1)(a), the authority to make an assessment order ends. All the provisos of section 42(1) are made applicable mutatis mutandis to the reassessment proceedings under section 44 of the Act as provided therein. It would therefore, follow that even in cases where the reassessment order is not made within three years from the date of service of the notice being the time-limit prescribed by section 44(b) no order can be made thereafter unless the proceedings are stayed while they are alive and during the period when an order could have been made by the concerned authority. We are therefore of the view that no assessment order under section 44 in respect of the years for which reassessment was initiated by serving notices on October 10, 1978 on the petitioner could have been made after October 9, 1981 and the subsequent stay of the proceedings was of no avail for extending the period of limitation in respect of these three years beyond October 9, 1981. The impugned orders of reasses....
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....er of the State Government or the Commissioner under section 42(1) of the said Act to stay the assessment proceedings can be exercised only in extraordinary circumstances and for supervening reasons which cannot be attributed to the default or failure of the assessing authorities. The Supreme Court in Fag Precision Bearings [1997] 104 STC 143, while dealing with a stay order passed under the first proviso to sub-section (1) of section 42, read with rule 37-A observed that the Commissioner must put the reasons and circumstances necessitating stay of assessment proceedings in writing, and, in that case, the reasons and circumstances necessitating stay were that, the assessment was in progress and "since some more time will be taken and the assessment proceedings are not likely to be completed within the prescribed time........... it is considered proper to stay the assessment......" The Supreme Court held that to accept this reason as a good reason for staying the assessment proceedings would amount to holding that the Commissioner or the State Government, can give a go-by to the statutory provision prescribing the period during which the assessment proceedings shall be completed ....