Fiscal reassessment survives wrong provision citation, while penalty depends on the correct statutory basis and required findings.

In fiscal reassessment proceedings, a wrong citation of the penalty provision did not invalidate an order where the authority otherwise had jurisdiction to reopen escaped turnover and levy tax. Reopening was upheld because the assessee had obtained exemption on a claim later found to be untrue, the authority had reason to believe taxable turnover had escaped assessment, and the dealer bore the burden of proving non-liability. The opportunity to inspect material and produce accounts was treated as adequate, so no breach of natural justice was found. Penalty, however, depended on the statutory basis actually invoked and the required finding of wilful non-disclosure, so that issue was left open.

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Issues: (i) whether a reassessment and levy of tax could be sustained when the assessing authority cited the wrong penalty provision; (ii) whether the reopening of the completed assessment was without jurisdiction for want of reliable basis or because the assessees were denied an effective opportunity; (iii) whether penalty could be imposed on the facts recorded.

Issue (i): whether a reassessment and levy of tax could be sustained when the assessing authority cited the wrong penalty provision;

Analysis: The power to reopen escaped turnover and levy penalty was held to depend on the substance of the authority's jurisdiction and not on the exact statutory label quoted in the notice or order. Sections dealing with best judgment assessment and escaped turnover were treated as machinery provisions serving the same fiscal purpose, and a wrong reference to one provision would not invalidate an order otherwise made within power.

Conclusion: The misquotation of the penalty provision did not vitiate the reassessment order.

Issue (ii): whether the reopening of the completed assessment was without jurisdiction for want of reliable basis or because the assessees were denied an effective opportunity;

Analysis: The reassessment was upheld on the footing that the assessees had originally obtained exemption on the basis of a claim later found to be untrue, that the assessing authority had sufficient reason to believe that taxable turnover had escaped assessment, and that the burden of proving non-liability to tax lay on the dealer. The opportunity given to inspect material and produce accounts was held to be adequate, and no breach of natural justice was found.

Conclusion: The reopening of the assessment was within jurisdiction and no violation of natural justice was established.

Issue (iii): whether penalty could be imposed on the facts recorded;

Analysis: Penalty under the provision corresponding to escaped assessment required a finding of wilful non-disclosure of assessable turnover, whereas penalty under the best judgment provision stood on a different footing. The order was therefore examined to ascertain under which provision penalty had in fact been imposed and whether the requisite finding existed.

Conclusion: The validity of the penalty was left for further orders after determining the statutory basis on which it was imposed.

Final Conclusion: The reassessment and the rejection of the procedural objections were upheld, but the issue of penalty was not finally concluded in the present order and was kept open for further directions.

Ratio Decidendi: In fiscal reassessment proceedings, the substance of the authority's jurisdiction prevails over misquotation of the statutory provision, the dealer bears the burden of proving exemption or non-liability, and penalty for escaped turnover requires the statutory foundation and findings prescribed by the governing provision.

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