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Issues: (i) Whether the Assessing Authority could reopen the completed assessment under section 11-A of the Punjab General Sales Tax Act, 1948 in the absence of fresh definite information and merely on a different view of the same facts and law; (ii) whether goods manufactured in Punjab and transferred to the dealer's Delhi branch for sale there were goods manufactured "for sale" so as to make the second proviso to section 5(2)(a)(ii) inapplicable.
Issue (i): Whether the Assessing Authority could reopen the completed assessment under section 11-A of the Punjab General Sales Tax Act, 1948 in the absence of fresh definite information and merely on a different view of the same facts and law.
Analysis: The power under section 11-A was held to arise only when, by reason of definite information coming into possession after the original assessment, the authority discovers escaped or under-assessed turnover. The material relied upon for reopening was not new: the transfer of goods to the Delhi branch was already before the original Assessing Authority, and no fresh fact or later judicial pronouncement had emerged. On those facts, the subsequent action amounted only to a change of opinion on the same record, which is outside the scope of reassessment power and, if anything, could have fallen within revisional jurisdiction.
Conclusion: The reassessment under section 11-A was jurisdiction and could not be sustained.
Issue (ii): Whether goods manufactured in Punjab and transferred to the dealer's Delhi branch for sale there were goods manufactured "for sale" so as to make the second proviso to section 5(2)(a)(ii) inapplicable.
Analysis: The expression "for sale" was construed according to the general meaning of sale in the Act, not as confined to sale within Punjab. Goods actually manufactured in Punjab and then sold through the Delhi branch were still goods manufactured for sale. A transfer to the branch outside Punjab did not by itself destroy the character of the goods as goods meant for sale, especially where the branch itself was a registered dealer and sales tax was paid on the eventual sales there. The second proviso therefore did not apply to impose tax on the raw material purchases merely because the finished goods were first sent to the branch outside the State.
Conclusion: The second proviso to section 5(2)(a)(ii) was inapplicable and the additional tax demand could not stand.
Final Conclusion: The reassessment order was without jurisdiction and the levy based on the branch transfer was unsustainable, so the impugned order was quashed and the petition succeeded.
Ratio Decidendi: Reassessment can be made only on definite information arising after the original assessment, and goods manufactured for eventual sale remain "for sale" even when transferred to a branch outside the State for actual sale there.
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