We may now pass from the problem of the psychoanalytic unconscious to one that is more subtle, the problem of unconsciousness. What happens to the Self in deep, dreamless sleep? Does not the absence of any psycho-physical objects in this state simply prove that there is no consciousness apart from them, and that therefore consciousness is merely a function of the soul-body?

The Vedanta answers this problem by saying that in the state of deep sleep (sushupti) the Self 'reassumes' its origional omniscience. There is no memory of this on waking for the simple reason that memory is a function of the soul-body, being, as it were, the traces of past impressions on the psycho-physical organism. The eternal Self needs no memory because it has no past. In eternal and omniscient consciousness past, present, and future are simultaneous, as previously explained, and for this reason events in time leave no trace upon the eternal consciousness. In sleep, then time, which is the mode of knowing things successively, dissapears, leaving alone and 'unclouded'the eternal mode of knowing proper to the Self. On the awakening of the soul-body, the Self focused upon it 're-enters' the successive way of knowing things, and as the omniscience enjoyed by the Self in sleep was never knowledge for the soul and the senses, no record or track therof remains in memory.

The difficulty in understanding this point is that we generally confuse the Self with the memory,and the continuity of the memory with the eternal persistence (sic) of the Self behind the changing flux of experience. But the consciousness of the Self is strictly a now-consciousness, and it seems to remember the past only because the memory-traces on the psych-physical organism are present. The Self can only be said to remember in the completely different sense of 'remembering itself', of 'reassuming' not a past but an eternal consciousness, of ceasing, as it were, to focus itself as the buddhi upon the particular and individual point of view.

from the Supreme Identity by Allan Watts pg. 91