Shaw Wallace and Company Ltd. Vs. Deputy Commissioner of Commercial Taxes (Assessments-2), City Division-iii - Court Judgment

SooperKanoon Citationsooperkanoon.com/380418
SubjectSales Tax
CourtKarnataka High Court
Decided OnJul-14-1997
Case NumberWrit Petition Nos. 24777 to 24780 of 1996
JudgeP. Vishwanatha Shetty, J.
Reported inILR1997KAR2730
ActsKarnataka Sales Tax Act, 1957 - Sections 5(3) and 12A
AppellantShaw Wallace and Company Ltd.
RespondentDeputy Commissioner of Commercial Taxes (Assessments-2), City Division-iii
Appellant Advocate M/s King and Partridge
Respondent Advocate R.I.D.'Sa and ;H.G. Ramesh, Government Advs.
Excerpt:
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- employees state insurance act, 1948 [c.a. no. 34/1948] -- section 39: [k. ramanna, j]default in making remittance of the amount collected towards e.s.i. held, interest payable on each days delay. interest cannot be waived on the ground that the department had filed an appeal. - the respondent having failed to take any further action pursuant to the notices annexures a1 to a4 till issue of endorsements annexures d1 to d4, the proceedings initiated against the petitioner are deemed to have been dropped. ' (b) in paragraph 9 of the judgment, it has been observed thus :if, on the other hand, even after a period of four years from the order of remit and in cases where there is no appeal either by the assessee or by the revenue so as to say that the proceedings are still pending, the.....
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orderp. vishwanatha shetty, j.1. in these petitions, the petitioner has prayed for quashing three notices dated november 7, 1987, copies of which have been produced as annexures a1 to a3 and notice dated december 30, 1992, a copy of which has been produced as annexure a4, and three notices dated august 19, 1996, copies of which have been produced as annexures f1 to f3 and notice dated august 16, 1996, a copy of which has been produced as annexure f4. 2. brief facts that may be relevant for disposal of these petitions may be set out as hereunder : the petitioner, in these petitions, is a public limited company engaged, inter alia, in the manufacture and sale of indian-made foreign liquor (hereinafter referred to as 'the imfl'); chemical fertilisers and fertiliser mixtures and consumer.....
Judgment:
ORDER

P. Vishwanatha Shetty, J.

1. In these petitions, the petitioner has prayed for quashing three notices dated November 7, 1987, copies of which have been produced as annexures A1 to A3 and notice dated December 30, 1992, a copy of which has been produced as annexure A4, and three notices dated August 19, 1996, copies of which have been produced as annexures F1 to F3 and notice dated August 16, 1996, a copy of which has been produced as annexure F4.

2. Brief facts that may be relevant for disposal of these petitions may be set out as hereunder :

The petitioner, in these petitions, is a public limited company engaged, inter alia, in the manufacture and sale of Indian-made foreign liquor (hereinafter referred to as 'the IMFL'); chemical fertilisers and fertiliser mixtures and consumer products, etc. It is the case of the petitioner that it has its own distilleries in some of the States of Union of India; and for the assessment years 1981-82 to 1983-84, it did not have a distillery of its own in the State of Karnataka and, therefore, it had entered into an agreement dated October 13, 1980 with the Indian Brewery and Distillery (Private) Ltd., (hereinafter referred to as 'the IBD'), which had a distillery at Hallikhed, Bidar District, for the purpose of sale of IMFL to the petitioner under the petitioner's brand name. It is the further case of the petitioner that during the calendar years 1980 to 1982 and 1984, is respect of which the dispute has arisen in these portions, the IMFL was exigible to sales tax at the point of first sale in the State of Karnataka as provided under section 5(3) of the Karnataka Sales Tax Act, 1957 (hereinafter referred to as 'the Act') and since the IBD manufactured and sold IMFL to the petitioner, the IBD was liable to sales tax and, therefore, the petitioner paid the sales tax for the years in question to IBD, that is, for the assessment years 1980, 1981, 1982 and 1984; (which are the subject-matters of dispute in these petitions) and the assessment orders were passed by the respondent on December 16, 1983; December 31, 1983; December 23, 1983 and January 18, 1985 for the years 1980, 1981, 1982 and 1984 respectively; and in the said assessment orders, the subsequent sale of IMFL made by the petitioner in the State of Karnataka were exempted from sales tax. It is the case of the petitioner that since the petitioner was aggrieved by the said assessment orders in regard to determination of taxable turnover in respect of chemical fertiliser mixtures and in regard to liquor pertaining to the question whether the bottles were liable to be taxed at the same rate at which liquor was liable, the petitioner preferred appeals under the Act to the Deputy Commissioner (Appeals) and later to the Tribunal and before this Court; and this Court, by its order dated November 4, 1992 [Shaw Wallace & Co. Ltd. v. State of Karnataka ], disposed of the revision petitions and remitted the matter for fresh consideration to the assessing authority. According to the petitioner, the point that was remitted for consideration was an to whether the bottles were to be taxed at the rate different from their contents being liquor or not. It is also the case of the petitioner that on an inspection of the petitioner's premises by the Intelligence Wing of the Commercial Taxes Department on May 3, 1986, a number of documents were seized and taken away by them and on the basis of the documents seized, the Intelligence authorities appear to have formed an opinion that the petitioner's sales of IMFL, which were claimed to be second sales by the petitioner in its return filed for the years referred to above and also for the assessment year 1983 and accepted by the respondent in the assessment orders, were incorrect and that the petitioner's sales were required to be construed as first sales in the State of Karnataka and as such, liable for payment of tax. Even in respect of the inter-State sales, the same view appears to have been formed.

Subsequently, by means of three notices, annexures A1 to A3, dated November 7, 1987 for the assessment years 1980 to 1982 issued under section 12A of the Act, the respondent proposed to withdraw the exemption earlier allowed in the course of original assessment in respect of second sales of IMFL and to treat the petitioner as the first seller of IMFL and as such, making it liable to pay sales tax and called upon the petitioner to file its objections. For the assessment year 1984, the respondent issued a similar notice, annexure A4, dated December 31, 1992 and called upon the petitioner to file its objections, if any. In notice, annexure A4, the petitioner was also called upon to show cause why the petitioner should not be made liable to pay tax under the provisions of the Central Sales Tax Act, 1956 (hereinafter referred to as 'the CST Act'). It appears, by means of letters dated November 18, 1987, the petitioner filed its objections pursuant to the notices, annexures A1 to A3, i.e., for the assessment years 1980 to 1982, stating that it was handicapped to file its objections inasmuch as most of the related documents were in the possession of the respondent following the inspection of the petitioner's premises on May 3, 1986 and requested the respondent either to return those documents or permit the petitioner to take the xerox copies thereof and requested for a month's time to fuel objections. So far as the notice, annexure A4, is concerned, the petitioner, by its letter dated January 5, 1993 stated that since the claim of the petitioner for exemption was upheld by the Tribunal pursuant to the notice issued under section 12A of the Act for the year 1983 dealing with the identical issues, the further proceedings pursuant to the notice, annexure A4, may be dropped and in the event of the respondent disagreeing with the Tribunal's view, the petitioner could be given three weeks' time to file its objections, etc. It is also the case of the petitioner that pursuant to the request made by the petitioner for grant of time in respect of the assessment years 1980 to 1982, the respondent issued an endorsement dated November 21, 1987 granting time up to December 30, 1987 and informed the petitioner that in the event of the petitioner failing to file its objections, the respondent would conclude the reassessments as proposed; and in so far as the assessment year 1984 is concerned, the respondent, by means of its endorsement dated February 20, 1993, granted time up to April 3, 1993.

When the proceedings for the years 1980 to 1982 and 1984 were pending, the respondent had taken up the reassessment proceedings for the year 1983 both under the KST Act and the CST Act and passed orders on August 19, 1989 holding that the petitioner was the first seller of IMFL in the State of Karnataka and as such liable to pay tax. The appellate authority, by its order dated January 30, 1990, has substantially confirmed the order of reassessment. However, in the second appeal filed by the petitioner being aggrieved by the order of reassessment and the order made in the first appeal, the Tribunal, by means of its order dated June 25, 1991, allowed the appeals of the petitioner taking the view that the petitioner was only a second seller of IMFL in the State of Karnataka and as such the sales made by the petitioner were exempt from payment of tax. Aggrieved by the said orders, the State took up the matter in S.T.R.P. Nos. 112 and 113 of 1994 before this Court [See supra] and the Division Bench of this Court, by its order dated March 25, 1996, set aside the order passed by the Tribunal and held that the sales of IMFL made by the petitioner is the first sale and as such liable for tax both under the Act and under the CST Act. However, it is also the case of the petitioner that aggrieved by the decision of this Court made in the said petitions, it has preferred special leave petition to the Supreme Court and the same is pending consideration. The undisputed fact is that the Division Bench of this Court has held that the sale of IMFL made by the petitioner is the first sale and as such, the petitioner was liable for payment of tax under the Act and also under the CST Act. The said view taken by this Court makes it clear that the exemption claimed by the petitioner in the returns submitted by it from payment of tax on the basis that the sales made by the petitioner were only second sales and such not liable for payment of tax, was erroneous in law and not justified.

3. In these petitions, Sri R. N. Narasimha Murthy, learned Senior Counsel appearing along with Sri K. P. Kumar for M/s. King & Partridge, challenged the validity of the notices impugned and prayed for quashing the proceedings on three grounds. Firstly, he submitted that section 12A of the Act, as it stood prior to the amendment made to the said section by means of Act No. 10 of 1983 (i.e., with effect from April 1, 1983), did not empower the respondent to initiate proceedings under section 12A of the Act in regard to the proceedings in respect of which returns were filed and accepted by the assessing authority as the said assessments were not escaped assessments within the meaning of section 12A of the Act. Elaborating this contention, he made two ancillary submissions. Firstly, he pointed out that it is only by means of an amendment made to section 12A of the Act, the assessing authority is conferred with the power to proceed to reassess any assessment already made, if any deductions or exemptions have been wrongly allowed in the said returns already finalised and such power was not available to the assessing authority prior to the amendment made to section 12A of the Act by means of Act No. 10 of 1983. Secondly, he pointed out that prior to the amendment made to section 12A of the Act, the assessing authority could have initiated proceedings for reassessment of the assessments already made in respect of the escaped assessments as provided under section 12A of the Act, at any time within a period of five years from the expiry of the year to which the tax relates and, therefore, in so far as the assessment years 1980, 1981 and 1982 are concerned, the proceedings initiated by means of notices, annexures A1 to A3 dated November 7, 1987, are totally without jurisdiction as the said notices were issued both beyond the period of limitation prescribed and also on the ground that is not permitted by section 12A of the Act, as it stood prior to the amendment made by means of Act No. 10 of 1983. He further submitted that amendment made to section 12A of the Act by means of Act No. 10 of 1983 is prospective in nature and, therefore, in respect of the rights that had accrued to the petitioner on account of the bar of limitation, the respondent has no jurisdiction to proceed under amended section 12A of the Act. Sri Narasimha Murthy relied upon the decisions of this Court in the case of G. K. Chikanarasimhiah v. Assistant Commissioner of Commercial Taxes reported in [1971] 28 STC 98 and Nagaraja Overseas Traders v. State of Mysore reported in [1974] 33 STC 315, in support of his submission that even if on a wrong view of the law, the assessing authority had exempted the turnover, the same cannot be treated as escaped turnover under section 12A of the Act as it stood prior to amendment by means of Act No. 10 of 1983. He also relied upon the decisions of the Supreme Court in the case of Janardhan Reddy v. State : [1950]1SCR940 , Keshavan Madhava Menon v. State of Bombay : 1951CriLJ680 , State of Tamil Nadu v. Sri Thirumagal Mills Ltd. : [1972]2SCR395 and Mohd. Rashid Ahmad v. State of U.P. : (1979)ILLJ146SC in support of his submission that unless the legislation is made retrospective, prima facie, every legislation is prospective in nature and, therefore, the amendment made to section 12A of the Act by means of Act No. 10 of 1983 being prospective in nature, the claim of the Revenue, which was barred by limitation as against the petitioner, is not enforceable in law. Further, relying upon the decision of the Supreme Court in the case of Commissioner of Income-tax, Punjab v. Kulu Valley Transport Co. (P.) Ltd. : [1970]77ITR518(SC) , Sri Narasimha Murthy submitted that when two interpretations are possible, one favourable to the tax-payer must be adopted.

4. Sri Narasimha Murthy, secondly, submitted that even assuming that on terms, section 12A of the Act, as amended, applies, it is not permissible in law to make a final order of reassessment after a lapse of eight years from the end of the assessment year/years in question. Accordingly to the learned Senior Counsel, the requirement of section 12A of the Act, as it presently stands, is that the entire reassessment proceedings are required to be completed within eight years from the expiry of the period to which the tax relates and the same having not been done, the entire proceedings are liable to be quashed as the authorities have no jurisdiction to proceed with the further enquiry in the matter. In other words, it is his submission that the limitation prescribed under section 12A of the Act is not merely for initiating proceedings for reassessment, but also for completion of the assessments. In support of this submission, he drew my attention to sub-section (2) of section 12A of the Act, wherein it is provided that in computing the period of limitation for assessment of escaped turnover under section 12A, 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 authority or the High Court or the Supreme Court is required to be excluded. From the words 'assessment of the escaped turnover' employed in sub-section (2) of section 12A, the learned counsel would submit that it is only in case of assessment of the escaped turnover, it may be permissible to initiate proceedings within the period of limitation prescribed under sub-section (1) of section 12A of the Act, but in cases of reassessment on the ground of any deductions or exemptions, which have been wrongly allowed in the assessment already made, or the reassessment is required to be made on any other ground permitted by law, the mandate of the law is that the reassessment proceedings are required to be completed within eight years from the expiry of the year to which the tax relates. He further pointed out that the expression 'to proceed to' appearing in sub-section (1) of section 12A applies to or qualifies the word 'assess' appearing immediately thereafter and not to the word 'reassess'; and according to the learned counsel, the expression 'proceed to assess and reassess' is independent of each other and the latter is not qualified by the words 'proceed to assess.'

5. Finally, Sri Narasimha Murthy submitted that the inordinate delay in not passing the order of reassessment within a reasonable period from November 9, 1987 and December 31, 1992, is fatal to the constitution of the proceedings. According to the learned Senior Counsel, though in the impugned notices, annexures A1 to A3 dated November 7, 1987 and annexure A4 dated December 31, 1992, it is stated that the petitioner was directed to file its objections within the prescribed period from the date of receipt of the notices and pursuant to the said notices, the petitioner sought for time to file objections on the ground that the documents were seized by the Intelligence Wing of the Department and thereafter, by means of endorsement dated November 21, 1987 (annexure C1), the petitioner was granted time up to December 30, 1987 to file objections in respect of the notices issued as per annexures A1 to A3 and was given time by means of endorsement dated February 20, 1993 (annexure C2) till April 3, 1993 in respect of notice, annexure A4 dated December 30, 1992; and in the said endorsement, though it was specifically stated that if the petitioner fails to file its reply, the proceedings would be initiated without further notice; the respondent having failed to take any further action pursuant to the notices annexures A1 to A4 till issue of endorsements annexures D1 to D4, the proceedings initiated against the petitioner are deemed to have been dropped. He further submitted that in view of the inordinate delay in taking steps, on the part of the respondent, the petitioner bona fide believed that the proceedings initiated against it pursuant to the notices, annexures A1 to A4, came to be dropped and, therefore, as this stage, the respondent cannot be permitted to proceed further in the matter pursuant to the endorsements, annexures D1 to D4. He also pointed out that having regard to the facts and circumstances of the case, the petitioner had legitimate expectation that the entire proceedings were dropped against it in so far as the assessment years in question are concerned. It is his further submission that in view of the said legitimate expectation, the petitioner had managed its finance to suit its business and if, at this belated stage, the petitioner is to be saddled with huge liability, it will totally ruin its business. According to Sri Narasimha Murthy, any State action has to be fair and reasonable and it is not permissible for the authorities of the State to keep quiet for an unreasonable length of time and thereafter enforce the rights of the State against the citizens and, therefore, under these circumstances, even if there is no period of limitation prescribed in the statute, it must be held that the authorities have no power in law to continue the proceedings against the petitioner after a lapse of nine years from the date of the notices, annexures A1 to A3 dated November 7, 1987 and four years from the date of the notice, annexure A4, dated December 30, 1992. In support of this submission, he strongly relied upon the decision of the Kerala High Court in the case of P. K. Sankaran v. Sales Tax Officer reported in [1983] 54 STC 312 and drew my attention to paragraphs 4 and 9 of the judgment.

(a) In para 4 of the judgment, it has been observed thus :

'4. It is true that under the Kerala General Sales Tax Act or the Rules, no time-limit is fixed for completing the assessment. But all the same, when the statute does not contain any provision prescribing the time, for completing the assessment, can the authority who has to make the assessment simply fold his hands and initiate action for the completion of the proceedings after 'any number of years'? That is the question that falls for consideration in this case.'

(b) In paragraph 9 of the judgment, it has been observed thus :

'......If, on the other hand, even after a period of four years from the order of remit and in cases where there is no appeal either by the assessee or by the revenue so as to say that the proceedings are still pending, the assessing authority has not taken effective proceedings for the purpose of effecting revised assessments as in this case, and there is no valid explanation for the delay, I am of the view that the proceedings so initiated or continued after an unreasonable period will be vitiated and bad in law. If proceedings are initiated beyond four years after the order rendered in the appeal or revision, the exercise of power in such cases is prima facie 'unreasonable' and improper and it is for the assessing authority to show or demonstrate that there are valid and proper grounds for the delay so caused and in the absence of cogent and acceptable reasons explaining the delay, the exercise of power will be held to be unreasonable and improper. Long lapse of time has brought about a situation whereby the assessee is not obliged nor will he be in a position to preserve the accounts and other documents mentioned in rule 32(21). In fact, in this case, he has stated so in exhibit P3. There is no material to contradict or disbelieve it. In the light of the above, I declare that exhibits P4 and P5 assessment orders are unreasonable and unsustainable. Therefore exhibits P4 and P5 orders are quashed.'

6. He also relied upon the decision of the Supreme Court in the case of Superintendent of Taxes, Dhubri v. Onkarmal Nathmal Trust : AIR1975SC2065 and submitted that merely because the proceedings have been pending before the Tribunal and before this Court pertaining to the assessment year 1983, is not a ground for the authorities not to take further steps in the matter pursuant to issue of notices, annexures A1 to A4. He submitted that in the case of Superintendent of Taxes : AIR1975SC2065 , even where the High Court has granted an interim order and stayed the recovery and on account of that, the period of limitation prescribed came to be barred, the Supreme Court has taken the view that since it was open for the authorities to move for the vacation of the interim order, the inactivity cannot be equated to impossibility and, therefore, it was not a ground to plead for condonation of delay in taking steps for recovery of tax due. In the said decision, he drew my attention to paragraphs 63 and 64 of the judgment, which read as hereunder :

'63-64. If it shocks one's conscience to think that the mere fact that the High Court's orders prohibiting the Commissioner from proceeding under the Act should completely frustrate the intentions of a statue which was ultimately found by this Court to be quite valid and existing for the relevant period in the eye of law, it should disturb one's equanimity no less that those who represented or advised the taxing authorities of the State should not have brought to the notice of the High Court the great loss to the exchequer of the State and the possible automatic victory which the respondents may secure by mere lapse of time. The High Court would, I have no doubt, have suitably modified its orders to meet the requirements of law and justice in such cases if the possible consequences of its orders had been brought to its notice.'

He also relied upon the decision of the Supreme Court in the case of State of Gujarat v. Patel Raghav Natha : [1970]1SCR335 and Mansaram v. S. P. Pathak : [1984]1SCR139 and submitted that the said decisions of the Supreme Court clearly support his contention that since steps taken pursuant to notices, annexures A1 to A4 were not pursued within a reasonable time, the respondent has no authority in law to continue the proceedings.

7. Sri D'Sa, learned Government Advocate, met each one of the submissions put forward by Sri Narasimha Murthy with equal ability and clarity. In so far as the first contention of Sri Narasimha Murthy is concerned, it is the submission of the learned Government Advocate that before the amendment made to section 12A of the Act by means of Act No. 10 of 1983, the period of limitation was five years and, therefore, the authorities were entitled to initiate proceedings for the escaped turnover within a period of five years; and in so far as the assessment period falling as on December 31, 1980 is concerned, it would expire only on December 31, 1985 and before the expiry of the period of limitation prescribed, that is, December 31, 1985, section 12A of the Act came to be amended by means of Act No. 10 of 1983 providing for assessment or reassessment in cases where any deductions or exemptions have been wrongly allowed, etc.; though subsequently, by means of Act No. 27 of 1985, which came into effect from August 1, 1985, the period of limitation was prescribed as ten years instead of five years, which was earlier prescribed, though subsequently, by means of Act No. 15 of 1988 (w.e.f. April 1, 1988), the period of limitation has been limited to eight years. Therefore, the learned Government Advocate would submit that before the expiry of limitation earlier prescribed, section 12A of the Act was amended both enlarging the scope or power of assessment or reassessment conferred on the assessing authority and also the period of limitation; and, therefore, the proceedings initiated by means of notices, annexures A1 to A4, which were admittedly issued within the period of 10 years from the date of the period to which the tax relates, are valid in law. Elaborating this submission, Sri D'Sa submitted that the law of limitation only extinguishes the remedy and not the liability and the Division Bench of this Court, in S.T.R.P. Nos. 112 and 113 of 1994 disposed of on March 25, 1996 (State of Karnataka v. Shaw Wallace & Company Ltd. [1998] 110 STC 506 supra), having taken the view that the exemption claimed by the petitioner from payment of tax was not justified and the proceedings initiated under section 12A of the Act for the year 1983 under identical circumstances having been held valid as the sales of IMFL made by the petitioner, viz., first sale, the petitioner cannot challenge the notices impugned. According to the learned Government Advocate, the petitioner has claimed only immunity against the transaction being reinvestigated or reopened and it is not the case of the petitioner that the petitioner was not liable to pay the tax. Therefore, he would submit that section 12A of the Act, as amended, has to be read as it stood in the statute on the date the action was taken; and, therefore, the limitation has to be applied on the date on which the action was sought to be taken in respect of the cause of action, which had accrued in the past. He further submitted that it was permissible for the State to enlarge the scope of the section; and before the expiry of the period of limitation, the Act has been amended. However, he would further submit that a plain reading of section 12A, as amended, makes it clear that it is also retrospective in operation.

8. In so far as the second submission of Sri Narasimha Murthy is concerned, Sri D'Sa submitted that it is not the requirement of law that the proceedings should be completed within eight years from the expiry of the year to which the tax relates. According to him, it is sufficient if the proceedings are initiated within a period of eight years from the expiry of the year to which the tax relates (on the date of initiation of the proceedings, the period prescribed was 10 years). In support of this submission, he relied upon the decisions of the Supreme Court in the case of Indian Aluminium Cables Ltd. v. Excise and Taxation Officer [1977] 39 STC 19 and State of Punjab v. Tara Chand Lajpat Rai : [1967]3SCR10 , wherein the Supreme Court has taken the view while considering the expression 'proceed to assess or reassess' that issue of notice itself is sufficient to save the period of limitation prescribed though the assessment is finalised subsequently, even after the expiry of the period prescribed. He further submitted that the petitioner is not entitled to take any advantage from the word 'assessment', referred to in sub-section (2) of section 12A of the Act in respect of the plea of the petitioner that the assessment should be completed within a period of eight years from the expiry of the year to which the tax relates. He points out that the assessment and reassessment having regard to the context in which they are used in section 12A, must be read as synonymous. According to him, in reassessment, what was not assessed is assessed; and in substance, assessment and reassessment do not make any difference.

9. With regard to the third submission of Sri Narasimha Murthy that since the proceedings were not completed within a reasonable period from the date of initiation of the proceedings, Sri D'Sa would submit that when the Act prescribes the period of limitation for initiation of proceedings under sub-section (1) of section 12A of the Act, it is not permissible for this Court to impose restriction by further limiting the period on a principle that the statutory authority must carry out its duties within a reasonable period. He submitted that in the instant case, the proceedings relating to the regular assessment were pending before the appellate authority and also before this Court and reassessment proceedings under section 12A of the Act in respect of the year 1983 was pending before the appellate authority and also before the Tribunal in second appeal; and the Tribunal had taken the view that the sale of the IMFL made by the petitioner under similar circumstances was not a first sale and therefore the petitioner was not liable to pay the tax and the said order was challenged before this Court and the proceedings were pending before this Court in S.T.R.P. Nos. 112 and 113 of 1994 till March, 1996, and, therefore, the authorities had bona files believed that they should wait till the proceedings are finally decided by this Court and in the absence of any specific provision limiting their rights to complete the proceedings with a particular period from the date of initiation of the proceedings, they were justified in taking the view that they could wait till a final decisions is taken by this Court in the matter. He further submitted that there is absolutely no justification for the assertion made on behalf of the petitioner that the petitioner was led to believe that the proceeding initiated against it was dropped. In this connection, he took me to the statement made in the additional statement of objections setting out the reasons for not completing the proceedings immediately. He further submitted that the petitioner cannot derive any assistance from the decision of the Kerala High Court in the case of P. K. Sankaran [1983] 54 STC 312, relied upon by the learned counsel for the petitioner for two reasons : Firstly, he submitted that the said decision proceeds on the basis that there was no sufficient explanation given for the undue delay in completing the reassessment by the authorities. Secondly, the said decision also does not lay down the correct law, as the principle laid down in the said decision runs counter to the law laid down by the Supreme Court in the case of Indian Aluminium Cables Ltd. : [1977]1SCR716 , wherein the Supreme Court has laid down that the delay in concluding the proceeding by the Revenue cannot be made as a ground to drop the proceedings. He also relied upon the decision of the Supreme Court in the case of State of Haryana v. Chandra Mani : 2002(143)ELT249(SC) and submitted that the cause shown by the Revenue for the delay in the circumstances must be held as sufficient cause and the same has to be liberally construed. It is his further submission that the petitioner, who has wrongly claimed exemption and since its claim has now been finally negatived by this Court, is not entitled to come forward with the plea against the Revenue that the entire proceedings must be quashed as the Revenue did not take steps to conclude the proceedings within a reasonable period. Sri D'Sa submitted that the conduct of the petitioner disentitles him for any equitable reliefs at the hands of this Court.

10. In the light of the rival contentions advanced, the questions that would arise for my consideration in these petitions are the following :

(1) Whether section 12A of the Act, as amended by means of Act No. 10 of 1983, can be resorted to by the respondent in respect of the assessment years 1980, 1981 and 1982

(2) On terms, even if amended section 12A applies, can a final order of reassessment be made after a lapse of eight years after the expiry of the year to which the tax relates

(3) At any event of the matter, whether the delay caused in not passing the order of reassessment within a reasonable period from the date of issue of notices, annexures A1 to A3 dated November 7, 1987 and notice, annexure A4 dated December 31, 1992 is fatal to the continuation of the proceedings

11. Before considering the questions that would fall for consideration in these petitions, it is useful to refer to section 12A of the Act before amendment and after amendment by means of Act No. 10 of 1983 (w.e.f. March 1, 1983), which reads as hereunder :

Before amendment :

'12-A. Assessment of escaped turnover. - (1) Where for any reason the whole or any part of the turnover of a dealer has escaped assessment to tax or licence fee or has been assessed at a lower rate than the rate at which it is assessable, the assessing authority may, subject to the provisions of sub-section (2), at any time within a period of five years from the expiry of the year to which the tax or licence fee relates, proceed to assess to the best of its judgment, the tax or licence fee payable on the turnover referred to after issuing a notice to the dealer and after making such enquiry as it considers necessary.

(1-A).............'

After amendment :

'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)..............

(2)................'

The period of limitation of five years prescribed by means of Act No. 10 of 1983 was amended and made as ten years by means of Act No. 27 of 1985 with effect from August 1, 1985. However, again, by means of Act No. 15 of 1988, the period of limitation of ten years was reduced to eight years with effect from April 1, 1988.

12. Now, let me examine the questions formulated for consideration seriatim : Re : Question No. 1 :

13. Though with considerable skill and learning, Sri Narasimha Murthy made an effort to persuade me to take the view that section 12A, as amended by means of Act No. 10 of 1983, cannot be resorted to by the respondent in respect of the assessment years 1980 to 1982, I find it difficult to accede to his submission on this question. Under section 12A of the Act, as it stood prior to the amendment by means of Act No. 10 of 1983, the assessing authority was conferred with the power at any time within a period of five years from the expiry of the year to which the tax relates; proceed to assess to the best of its judgment the tax payable on the turnover by an assessee where, for any reason, the assessing authority is satisfied that the whole or any part of the turnover of a dealer has escaped the assessment. Therefore, even before the amendment to section 12A by means of Act No. 10 of 1983, the assessing authority was entitled to proceed to assess a dealer within a period of five years in respect of the turnover of a dealer, which has escaped assessment to tax. However, Sri Narasimha Murthy, as pointed out earlier, would contend that this Court in the case of Chikanarasimhiah [1971] 28 STC 98, had taken the view that the provisions of section 12A, as it stood prior to amendment, referred to above, could not have been resorted to in respect of the returns filed by the dealer, which was considered by the assessing authority and had become final. It is true that this Court has taken the view, as submitted by Sri Narasimha Murthy, but it cannot be disputed that the power was conferred on the assessing authority to proceed to reassess to the best of its judgment for any reason in respect of the turnover which has escaped assessment within a period of five years from the expiry of the year to which the tax relates. Therefore, in law, the dealer was liable to be assessed or reassessed in respect of an assessment which has escaped assessment within a period of five years. However, by means of amendment made to the section by Act No. 10 of 1983, it was specifically provided that in addition to the escaped assessment of a dealer 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 assessing authority at the time of original assessment or reassessment, within a period of five years from the expiry of the year to which the tax relates, proceeds to assess or reassess to the best of its judgment the tax payable by such dealer in respect of such turnover, etc. Therefore, by virtue of the amendment made to section 12A of the Act by means of Act No. 10 of 1983, the assessing authority was conferred with the power to assess or reassess the assessment, which has already been completed, where any deductions or exemptions have been wrongly allowed notwithstanding the fact that the whole or part of such escaped turnover was already before the assessing authority at the time of the original assessment. In other words, by virtue of amendment made by means of Act No. 10 of 1983, to section 12A of the Act, the scope and ambit of assessment and reassessment was widened. Therefore, the power has been conferred on the authority to proceed to make assessment or reassessment in respect of the assessments which have already been completed and in which any deductions or exemptions have been wrongly allowed notwithstanding the fact that the whole or part of the escaped turnover was before the assessing authority while making such assessment. The power of reopening the escaped assessment under the amended section has been conferred on the assessing authority. The words employed 'an assessing authority may notwithstanding the fact that the whole or part of such escaped turnover was already before the assessing authority at the time of original assessment or reassessment' make it abundantly clear that the assessing authority is conferred with the power of reopening of the assessments, which have already become final, if the requirement of section 12A of the amended section is satisfied. Therefore, it appears to me that though the section does not expressly state that the amendment made is retrospective, it is implicit in the language employed to the amendment made to section 12A of the Act that it is retrospective in operation and that the reopening of assessment or reassessment could be made in respect of such assessments, which are within the period of limitation. When the section itself gives a clear indication that it is retrospective in operation, in that, it confers power on the assessing authority to assess or reassess all the assessments, which have been completed and where the assessment has been escaped in respect of various reasons set out in the amended section 12A, it is not permissible for this Court to read the said provision as prospective in nature on a principle that all legislations are prospective in operation unless it is expressly made retrospective, and nullify or defeat the very object and purpose of the amendment carried out to the section. It is relevant to point out that in the instant case, for the assessment year 1980, the period of limitation would expire only on August 1, 1985, whereas the amendment to section 12A by means of Act No. 10 of 1983, had come into force with effect from April 1, 1983, that is, long before the period of limitation prescribed to assess or reassess the escaped assessment prior to the amendment made to section 12A of the Act by means of Act No. 10 of 1983. It is also necessary to point out that the effect of amendment is to confer power on the assessing authority to assess or reassess the escaped assessments or any deductions or exemptions which have been wrongly allowed in respect thereof, notwithstanding the fact that the whole or part of the escaped turnover was already before the said authority. Therefore, the amending provision also may be viewed from another angle and read to make it applicable to all the cases, which are within the period of limitation. In other words, in my view, even without holding that the amendment is retrospective in operation, it must be held that by the amendment to section 12A by Act No. 10 of 1983, power is conferred on the assessing authority to assess or reassess all the assessments which have been accepted, if they fall within the ambit of power conferred under the amended provision. It is the conferment of power to reopen the escaped assessments subject to the limitations provided under amended section 12A of the Act. It is not the case of fresh levy or imposition of tax. It is the case of roping in an assessee who evaded his liability by violating the law. Therefore, the entire matter and the effect of amendment must be looked into from this perspective. The period of limitation, which was earlier limited to five years, was extended to ten years by means of Act No. 27 of 1985 with effect from August 1, 1985. Therefore, looked at from this point of view also, I am unable to accept the submission of Sri Narasimha Murthy that the proceedings for the assessment years 1980 to 1982 is liable to be quashed. Further, in so far as the contention based on limitation is concerned, as rightly pointed out by the learned Government Advocate, the amendment to section 12A extending the period of limitation from five years to ten years was made by means of Act No. 27 of 1985 with effect from August 1, 1985, that is, prior to the expiry of the period of limitation prescribed for the assessment year 1980. Therefore, since the period of limitation, which was initially prescribed as five years, was extended to ten years before the expiry of the period of limitation prescribed, I am unable to accept the submission of Sri Narasimha Murthy that the proceedings were initiated for the assessment years 1980 to 1982 must be quashed as the said proceedings were initiated after the expiry of five years from the expiry of the year to which the tax relates. It is open to the Legislature to extend the period of limitation before the period earlier fixed by it expires. That is what has been done in the instant case. As rightly pointed out by Sri D'Sa, the period of limitation only bars the enforcement of the claim, but it does not extinguish the claim. It is relevant to point out that on merits, the claim of the department that the sale made by the petitioner was the first sale and it was liable for payment of tax is finally concluded by the Division Bench decision of this Court rendered in S.T.R.P. Nos. 112 and 113 of 1994 while considering the claim of the petitioner that the sale effected by it, was not the first sale and was not liable for tax in so far as the assessment year 1983 is concerned. Therefore, as on the date of amendment made to section 12A of the Act, firstly, by means of Act No. 10 of 1983 with effect from April 1, 1983 and secondly, by means of Act No. 27 of 1985 with effect from August 1, 1985, the liability of the petitioner for assessment in respect of turnover which has escaped assessment was existing. Since a claim was made by the petitioner that the sale made by the petitioner was only the second sale, the petitioner was not assessed for tax. Therefore, to my mind, it appears that it is a clear case of escaped assessment. The period of five years from the expiry of the year to which the tax relates even in respect of the year 1980 assessment would expire on December 31, 1985. Before that date, the period of limitation, which was limited to five years, was extended to ten years with effect from August 1, 1985 by means of Act No. 27 of 1985. Under these circumstances, so long as the liability continues and the bar created or provided by the statute to recover the claim, is removed or extended by prescribing a longer period of limitation, before the expiry of the period of limitation originally fixed, it cannot be said that the said claim cannot be enforced as the proceedings were not initiated before the expiry of the period of limitation as it stood prior to the last date from the expiry of the year to which the tax relates. It is no doubt true as rightly pointed out by Sri Narasimha Murthy that if two interpretations are possible, the one favourable to the tax-payer must be taken. But, I would like to add that if a law is made to fill up the lacuna in the existing law and thereby power is conferred on the assessing authority to reassess the assessee who had adopted means and methods to violate the law with impunity to evade his tax liability, the courts should not, in the guise of two interpretations that are possible, nullify the provisions of such a law or the executive action when the interpretation to be placed is clear, unambiguous and conveys the message it intends to achieve. Every law is made for the purpose of having an orderly society and protect the rights of the people either from the arbitrary State action or highhanded individual action; and it should not be understood and interpreted to mean and protect the rights of law breakers. It is also true that unless it is possible to clearly read into the provision that the amendment is retrospective in operation, it must be read, understood and interpreted as prospective in operation and the decision relied upon by Sri Narasimha Murthy fully supports the said view. However, as stated earlier, from the clear implications of the amendment made to section 12A of the Act by means of Act No. 10 of 1983, I am of the view that it is retrospective in operation. In so far as the case of the petitioner is concerned, the assessing authority could have initiated proceedings for escaped assessment of the petitioner for the year 1980 on or before August 1, 1985. However, before the said date, the period of limitation was extended from five years to ten years. Under these circumstances, in so far as the period of limitation is concerned, it is not a case of the amending period of limitation with retrospective effect, but it is a case of extending the period of limitation. Since the cause of action to institute proceedings for escaped assessment so far as the case of the petitioner was subsisting on the date of the amendment made extending the period of limitation, I am of the view that there is no merit in the contention advanced on behalf of the learned counsel for the petitioner that the notices, annexures A1 to A3 issued are beyond the period of limitation. Therefore, I am of the view that it is permissible for the assessing authority to proceed to initiate proceedings under amended section 12A of the Act.

14. In the light of the discussion made above, I am of the view that none of the decisions relied upon by Sri Narasimha Murthy in support of the contentions advanced by him is of any assistance to him.

Re. Question No. 2 :

15. Section 12A of the Act, as it stood before amendment by means of Act No. 15 of 1988 with effect from April 1, 1988, conferred power on the assessing authority to proceed to assess or reassess to the best of its judgment the tax payable by a dealer in respect of a turnover, which has escaped assessment to tax or has been under-assessed or has been assessed at a rate lower than the rate at which it was assessable under the Act or any deductions of exemptions wrongly allowed, within a period of ten years from the expiry of the year to which the tax relates (w.e.f. April 1, 1988, it is eight years). Therefore, the question is as to whether the assessing authority is required to complete the assessment within the period prescribed in section 12A of the Act or whether it is sufficient if the proceedings are initiated by means of issue of notices under section 12A of the Act. To decide the said question, it is necessary to know the meaning that could be given to the word 'proceed' to assess or reassess.

(a) In Webster's Encyclopaedic Unabridged Dictionary of the English Language, the word 'proceed' has been stated thus :

'To move or to go for work or onward to carry on or continue in action or process to do, to go on, to do something, to begin and carry on legal action, to take legal action, to be carried on as an action, process, etc.'

(b) In Law Lexicon Digest, the meaning to the word 'proceed' has been stated as 'to begin and carry on legal action'.

(c) In the World Book Dictionary (Ayharndike - Barnhart Dictionary), the meaning of the word 'proceed' among other things, is stated as 'to go on after having stopped move forward, to be carried on, continue, progress to be carried on, takes place to carry on in activity'.

Hence, in view of the words 'proceed to assess' employed in sub-section (1) of section 12A of the Act, to my mind, it appears that what is contemplated under sub-section (1) of section 12A of the Act is that the proceedings must be commenced or initiated within the period of limitation prescribed from the expiry of the year to which the tax relates. Therefore, I am of view that the initiation of the proceedings by issue of notice, like, annexures A1 to A3, would be sufficient. It is relevant to point out that if the intention of the Legislature is that the assessment or reassessment to the best of judgment should be completed within the period of limitation prescribed from the expiry of the year to which the tax relates, the Legislature would have made it explicit by providing the words 'complete the assessment or reassessment'. There was no need to employ the words 'proceed to assess or reassess'. In my view, the Legislature has used the words 'proceed to assess or reassess' within the period of limitation prescribed for the year to which the tax relates, as the completion of the assessment proceedings is likely to take substantial time. On many occasions, it may be beyond the control or power of the assessing authority to complete or conclude the assessment within the period of limitation prescribed. It is a case of assessing or reassessing the assessment of an escaped assessment. Under the circumstances, presumably, the Legislature thought that sufficient latitude must be given to the assessing authority to complete the assessment and no limitation should be imposed on its power to complete the assessment. In the view I have taken above, I am unable to appropriate the contention of Sri Narasimha Murthy based on the language employed in sub-section (2) of section 12A of the Act, wherein a reference is made to the words 'only assessment of the escaped turnover', but it does not refer to reassessment or assessment of any deductions or exemptions wrongly allowed and, therefore, the period of limitation provided under section 12A of the Act in respect of the escaped assessment or deductions or exemptions wrongly allowed must be treated as completion of assessment. Therefore, I am of the view that so long as the proceedings are initiated within a period of eight years from the expiry of the year to which the tax relates, a final order of assessment or reassessment can be made even after a lapse of eight years from the expiry of the year to which the tax relates in terms of section 12A of the Act. The view I have taken is fully supported by the decisions of the Supreme Court in the case of Indian Aluminium Cables Ltd. : [1977]1SCR716 and in the case of State of Punjab v. Tara Chand Lajpat Rai : [1967]3SCR10 . The Supreme Court, in the said cases, while considering the similar provision, has taken the view that issue of notice before the expiration of the period of limitation is sufficient and completion of the reassessment or assessment could be made even after the expiry of the period of limitation. Accordingly, the second question is also answered against the petitioner.

Re. Question No. 3 :

16. The last submission of Sri Narasimha Murthy is based on the principle that the authorities of the State must act in a fair and reasonable manner and enforce their rights within a reasonable period as against the citizen and any undue delay in exercise of the rights by the authorities of the State would seriously infringe the rights of a citizen. According to Sri Narasimha Murthy, as pointed out by me earlier, the unreasonable delay in exercise of the right by the authorities of the State gives a reasonable expectation in the mind of the citizen that the State or the authorities of the State have waived their right. I find it difficult to accept this submission of Sri Narasimha Murthy for two reasons : Firstly, as a broad proposition of law, in a matter of recovery of tax or revenue dues to the State, if such a proposition is accepted and laid down as a law in a system in which we are working; and where the State or the people have to depend upon the State machinery and human agencies who work the State machinery; and where enormous power and the clout some of the tax-payers wield would have disastrous consequences on the recovery of the tax/revenue dues to the State. Under these circumstances, unless a claim of the State to recover tax or revenue due to the State is specifically barred by the period of limitation, I am of the view that it is not desirable for the courts to apply the principle of fairness and reasonableness on the part of the State and its authorities on the ground that there is delay in exercise of the power conferred on the authorities of the State, and nullify the claim of the State to recover the revenue or the tax due to it. When there is an obligation cast on a citizen or tax-payer to pay the tax or the revenue to the State, as prescribed by law, his liability to pay tax cannot be absolved or got rid off by applying the principle of fairness and reasonableness on the part of the State or its authorities in the absence of a specific bar created under the statute. The entire matter will have to be viewed or considered from the back drop of the obligations of the tax-payer to discharge his statutory obligation to pay the tax. In the instant case, the liability of the petitioner to pay tax has been concluded by the decision of this Court. Further, the petitioner had the knowledge of the proceedings initiated against it for its liability to pay tax due to the State. Therefore, I am of the view that the petitioner cannot be permitted to come forward with a plea that the State should be prevented from taking action for recovery of the tax due from it on the ground that though the proceedings were initiated within the time prescribed, it was not concluded within a reasonable period thereafter. The principle of fairness and reasonableness in the State action has been enunciated to avoid hardship and to mitigate the hardship or injustice to be caused to a person or a citizen. Further, it is also relevant to point out that when sub-section (1) of section 12A of the Act provides for the period of limitation and confers power on the authorities to proceed to assess or reassess at any time within a period of eight years from the expiry of the year to which the tax relates, it is not permissible for this Court to impose further restrictions or limitations on the right of the assessing authority to proceed to complete the assessment within a reasonable period from the initiation of the proceedings. Therefore, under these circumstances, if the petitioner is to be given benefit on the ground that the delay on the part of the assessing authority in completing the proceedings has resulted in unfairness to the petitioner and, therefore, the proceedings should be quashed, I am of the view that it would result in travesty of justice than upholding justice and the rule of law. In the view I have taken above, I am unable to subscribe to the view expressed by the Kerala High Court in the case of P. K. Sankaran [1983] 54 STC 312, strongly relied upon by Sir Narasimha Murthy. Further, as rightly pointed out by Sri D'Sa, in view of the decision of the Supreme Court in Indian Aluminium Cables Ltd. v. Excise and Taxation Officer : [1977]1SCR716 , I am also of the view that the decision of the Kerala High Court in the case of P. K. Sankaran [1983] 54 STC 312, does not lay down the correct principle of law. In the said decision, the Supreme Court, at page 30, has observed thus :

'Lastly, we may also make a reference to a recent decision of this Court delivered by one of us (Untwalia, J.) in the case of Gurbaksh Singh v. Union of India : [1976]3SCR247 . An argument quite similar to the one advanced before us was advanced on behalf of the assesses appellant in that case before this Court. It was argued that the period of 4 years of limitation prescribed under sub-section (2a) of section 11 of the Bengal Finance (Sales Tax) Act, 1941, as extended to the Union Territory of Delhi, should be imported into the revisional and the appellate power of the authorities conferred on them under section 20. This argument was repelled and it was pointed out that the Legislature had not provided any period within which an order was to be made by an appellate or revisional authority; no such period should be imported in the exercise of the power on the basis of section 11(2a). Mr. Desai relied upon the penultimate paragraph of this decision in support of his contention that in any view of the matter notice under section 11(2) had to be issued and the assessment completed within a reasonable time. We do not accept this contention to be sound. The argument as presented cannot be accepted to be correct.'

17. Secondly the facts and circumstances of the case and the explanation offered by the respondents clearly show that there was no negligence or laches on the part of the respondent. No doubt, the proceedings were completed in respect of the assessment year 1983 earlier, within a reasonable time; and therefore, the learned counsel for the petitioner would contend that when the respondent was aware of the initiation of the proceedings in respect of the assessment year 1983, nothing prevented the respondent from completing the proceedings in respect of the assessment years in question within a reasonable period. In this connection, he would strongly rely upon the decision of the Supreme Court in the case of Superintendent of Taxes v. Onkarmal Nathmal Trust : AIR1975SC2065 , wherein the Supreme Court rejected the explanation offered on behalf of the department that in view of the interim order granted by the court, it was impossible for the department/State to issue notices within two years of the end of the return period, etc. I am of the view that the principle enunciated by the Supreme Court in the said case has absolutely no bearing to the facts of the present case. In the said case, the question that came up for consideration was whether the State can be permitted to plead that it was impossible for it to issue notices within two years of the end of the return period as required under section 7(2) of the Assam Taxation (On Goods Carried by Road or on Inland Waterways) Act, 1954. In view of the explanation offered by the State that the State was prevented from issuing the notices by virtue of the interim order granted by the High Court, in that context, the Supreme Court has observed, at paragraph 17, thus :

'17. The first contention on behalf of the State that it became impossible for the State to issue notice under section 7(2) of the New Act within two years of the expiry of the period of return is unsound on principle and facts. The maxim lex non cogit ad impossibilia means that the law does not compel a man to do that which he cannot possibly perform. In the present appeals, the applications were moved in the High Court for stay of proceedings. The respondents challenged the validity of the Act, and, therefore, asked for an injunction restraining the State from taking proceedings under the Act. At no stage, did the State ask for variation or modification of the order of injunction. It is well-known that if it is brought to the notice of a court that proceedings are likely to be barred by time by reason of any order of injunction or stay the court passes such suitable or appropriate orders as will protect the interest of the parties and will not prejudice either party. Even when certificate to appeal to this Court was granted on August 1, 1963, the State did not ask for any order for stay of operation of the judgment. That is quite often done. For the first time, on August 10, 1964, the State filed an application for stay of operation of the judgment of the High Court. The State did not take steps at the appropriate time. This Court on October 28, 1964, granted an interim order staying the operation of the High Court judgment. The interim order was made absolute on January 28, 1965, with certain conditions. The State cannot take advantage of its own wrong and lack of diligence. The State cannot contend that it was impossible to issue any notice within the period mentioned in section 7(2) of the New Act. The State did not endeavour to obtain appropriate orders to surmount the difficulties by reason of the injunction against taking steps within the time contemplated in section 7(2) of the New Act. The State is guilty of default. The State had remedies open to take steps by asking for modification of the order. The State had to assert the right that the State was entitled to demand taxes and the respondent was liable to pay the same. The State followed the policy of inactivity. Inactivity is not impossibility. The order of injunction is not to be equated with an act of God or an action of other enemy of the State or a general strike.'

That is not the situation in the present case. There is no statutory bar in the present case to proceed to complete the assessment since the proceedings have already been initiated by issue of notices, annexures A1 to A3 dated November 7, 1987 and annexure A4 dated December 30, 1992. It is the case of the department that since there was no period of limitation prescribed for completing the proceedings and in view of the fact that the order of reassessment made by the assessing authority in respect of the assessment year 1983 was set aside by the Tribunal and the said matter was pending in S.T.R.P. Nos. 112 and 113 of 1994 before this Court and the same came to be disposed of by this Court on March 25, 1996, the respondent did not hurry through the proceedings, lest an impression should be given that in respect of the order passed by the Tribunal setting aside the decision of the assessing authority, the assessing authority is keen to complete the proceedings and harass the petitioner. The respondent, by way of explanation for not completing the proceedings immediately after issue of notices, annexures A1 to A4, has stated that when action was initiated under section 12A, it had bona fide and reasonably believed that the completion of the proceedings under section 12A was not at all time-bound as the statute did not prescribe any period within which such proceedings were required to be completed. It has been further stated that the proceedings relating to the petitioner's regular assessment for the period from April 1, 1977 to December 31, 1983 were pending adjudication before the Karnataka Appellate Tribunal and before this Court up to November 4, 1992 and in that connection, at the request of the office of the Advocate-General, all the records of the petitioner's case for the period from April 1, 1977 to December 31, 1982 had been sent to the office on September 8, 1988 by the assessing authority under written instructions to that effect issued by the Commissioner of Commercial Taxes, Bangalore, and the said records were returned to the assessing authority from the office of the Advocate-General, accompanied by letter dated February 28, 1994, after the disposal of the S.T.R.Ps., and, therefore, in the absence of the records, the assessment proceedings for the years 1980, 1981 and 1982 could not be taken up. It is their further case that the reassessment proceedings under section 12A for the year 1983 were taken up and completed on August 19, 1989 since those records were available with the respondent-assessing authority. It is further stated that on completion of reassessment proceedings under section 12A for the year 1983, the petitioner-company preferred appeals which were disposed of affirming the stand of the Revenue and against which the second appeals were filed before the Tribunal, which were allowed by the Tribunal and thereafter, the matter was pending before this Court in the S.T.R.Ps., and this Court disposed of the said matters only on March 25, 1996. Therefore, under those circumstances, if the assessing authority, bona fide believed that it is not required to complete the proceedings within a specified period, I am of the view that that cannot be a ground to hold against the Revenue and quash the proceedings on the ground that the proceedings have not been completed within a reasonable time from the date of issue of notices, annexures A1 to A4. In a matter like this, this Court cannot ignore the fact that the petitioner in the return submitted by it, had claimed that the sale of IMFL effected by it was not a first sale and as such, not liable for payment of tax, and subsequently in the reassessment proceedings initiated under section 12A for the year 1983, this Court affirmed the order of reassessment made by the assessing authority under similar situation for the year 1983 holding that the sale effected by the petitioner was a first sale and as such, liable for payments of tax.

18. The nature of the business carried on by the petitioner shows that the petitioner is carrying on a big business. Under these circumstances, it is not possible to accept the submission of Sri Narasimha Murthy that the petitioner was led to believe that the proceedings were dropped as against the petitioner since the assessment proceedings were not completed within a reasonable period from the date of issue of notices, annexures A1 to A4. If the petitioner felt that the pendency of the proceeding was against the interest of the petitioner, nothing prevented the petitioner from approaching this Court for expeditious disposal of the proceedings. The petitioner, who was aware of the pendency of the proceedings for the years in question and also aware of the order of reassessment made for the year 1983, cannot now be permitted to challenge the proceedings on the ground that undue delay in completion of the proceedings after initiation of the proceedings has resulted in irreparable injury and hardship to the petitioner. I am unable to accept the said version of the petitioner. I do not find any bona fides in the said stand taken by the petitioner. The petitioner presumably having waited for the outcome of the decision of this Court in respect of the assessment year 1983, cannot now be permitted to challenge the proceedings on the ground of delay in completion of the proceedings by the respondent. In the facts and circumstances of the case, the petitioner cannot be permitted to take advantage of the delay, if any, in completing the reassessment proceedings and deprive the State of its legitimate right to recover the huge arrears of tax from the petitioner. As stated earlier, I am fully convinced and satisfied with the explanation offered by the respondent for the delay in completing the proceedings. Therefore, I do not find any justifiable ground to quash the proceedings on the ground that there has been undue delay on the part of the respondent in completing the proceedings. Undisputedly, the proceeding relates to escaped assessment which was initiated under section 12A of the Act. Under these circumstances, I am of the view that the conduct of the petitioner, which has contributed for initiation of the proceedings under section 12A of the Act totally disentitle it to invoke equitable jurisdiction of this Court seeking for quashing of the proceedings on the ground of delay in completion of the proceedings by the respondent. Looked from any point of view, I do not find any merit in these petitions. Therefore, the third question is also answered against the petitioner.

19. In view of my above conclusions, these petitions are liable to be dismissed. Since the proceedings have been kept pending for a considerable length of time, the respondent is directed to complete the proceedings as expeditiously as possible and at any event of the matter, not later than three months from the date of receipt of a copy of this order. The petitioner is directed to appear before the respondent for the purpose of completing the proceedings on August 20, 1997.

20. Subject to the direction given above to complete the proceedings, these petitions are dismissed, however, without costs.

21. Petitions dismissed.