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2014 (10) TMI 918 - KERALA HIGH COURTInterpretation of statute - period of limitation - section 25(1) of the KVAT Act - meaning of the phrase "proceed to determine" - the decision in the case Tirur Medical Stores v. State of Kerala [1978 (4) TMI 209 - KERALA HIGH COURT] examined - Though Tirur was rendered construing section 19 of the KGST Act, that decision became relevant for the present case and hence, a reference doubting the correctness of that precedent - Held that: - the Bench took the view that the use of the "proceed to determine" in section 19 of the KGST Act which provides for best judgment of escaped turnover, means that the assessing authority has to proceed to determine, in the sense, that the proceedings for the determination of the escaped turnover must commence within the period stipulated and the word "assess" in that section is used in the wider sense as given to it by the honourable Supreme Court in Sudarsanam Iyengar [969 (8) TMI 71 - SUPREME COURT OF INDIA], so as to include the proceeding leading to the final order of assessment - it was also laid down that it does not matter that the final order itself was passed beyond the period stipulated in section 19 of the KGST Act. Tirur case is precedent for the principle that proceeding has to be initiated by the issuance of notice within the period prescribed in section 19 of the KGST Act. The next specific view taken in Tirur case is that the phrase "proceed to determine" in section 19 of the KGST Act only requires the assessing authority to proceed to determine and commence such activity of decision making by issuance of notice within the period fixed in section 19 of the KGST Act. The net effect of the introduction of the third proviso to sub-section (1) of section 25 and the inclusion of section 25 within the canopy of section 25B is indicative of the fact that for all intents and purposes, the Legislature fixed an outer time-limit for completion of assessment proceedings under sub-section (1) of section 25, at least, in cases to which, the provision in section 25(1) as amended by the Kerala Finance Act, 2010 and the later amendments sustaining that provision or conferring power of enlargement of time applies. Obviously, even if section 25B is to guide the Deputy Commissioner, the time-limit has to be reasonable because, there cannotbe an indefinite proceeding under section 25(1) in view of the third proviso to that section - the files will be placed before the Division Bench for further consideration.
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