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Judgment
H.G. Ramesh, J.—In this writ petition, the petitioner is challenging the notice dated 5-9-2008 vide Annexure-H issued by the respondent u/s 12-A(1) of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as ''the Act'' for short), on the ground that the notice is barred by limitation, inasmuch as, the notice was issued after expiry of eight years from the expiry of the year to which the tax relates. I have heard Sri G. Sarangan, learned Senior Counsel appearing for the petitioner and Sri K.M. Shivayogiswamy, learned Additional Government Advocate for the respondent.
It is not in dispute that the year to which the tax relates had expired on 31-3-2000. The period of eight years from that date expires on 31-3-2008. The impugned notice is dated 5-9-2008. Undisputedly, the notice was issued after expiry of eight years. However, learned Additional Government Advocate, by referring to paras 9 and 10 of the statement of objections filed on behalf of the respondent, submits that the petitioner''s appeal relating to the relevant period was pending before the Karnataka Appellate Tribunal for a period of three years and the said period of three years requires to be deducted as per sub-section (2) of Section 12-A of the Act. It is relevant to refer to Section 12-A of the Act, which reads as follows.--
12-A. Assessment of escaped turnover.-- (1) If the Assessing Authority has reason to believe that the whole or any part of the turnover of a dealer in respect of any period has escaped assessment to tax or has been under-assessed or has been assessed at a rate lower than the rate at which it is assessable under this Act or any deductions or exemptions have been wrongly allowed in respect thereof, the Assessing Authority may, notwithstanding the fact that the whole or part of such escaped turnover was already before the said authority at the time of the original assessment or reassessment but subject to the provisions of sub-section (2), at any time within a period of eight years from the expiry of the year to which the tax relates, proceed to assess or reassess to the best of its judgment the tax payable by the dealer in respect of such turnover after issuing a notice to the dealer and after making such enquiry as it may consider necessary.
(1-A) In making an assessment under sub-section (1) the Assessing Authority may, if it is satisfied that the escape from assessment is due to wilful non-disclosure of assessable turnover by the dealer, direct the dealer to pay, in addition to the tax assessed under sub-section (1), a penalty not exceeding one and a half times the tax so assessed:
Provided that no penalty under this sub-section shall be imposed unless the dealer affected has had a reasonable opportunity of showing cause against such imposition.
(2) In computing the period of limitation for assessment of the escaped turnover under this section, the time during which an assessment has been deferred on account of any stay order granted by any Court or other authority in any case, or by reason of the fact that an appeal or other proceeding is pending before the Appellate Tribunal or the High Court or the Supreme Court, shall be excluded:
Provided that nothing contained in this section limiting the time within which any action may be taken or any order, assessment or reassessment may be made, shall apply to an assessment or reassessment made on the assessee or any person in consequence of, or to give effect to, any finding, direction or order made u/s 20, 21, 22, 22-A, 23 or 24 or any judgment, or order made by the Supreme Court, the High Court, or any other Court.
It is not the case of the respondent that at any point of time, the assessment was deferred on account of the reasons stated in sub-section (2) referred to above. Hence, question of deducting the time during which the petitioner''s appeal was pending before the Appellate Tribunal does not arise. As admittedly, the impugned notice was issued after expiry of the period of eight years contemplated u/s 12-A(1) of the Act, the impugned notice dated 5-9-2008 at Annexure-H is unsustainable in law and it is accordingly quashed.
Petition allowed.