Escaped-assessment information must relate to the same period; later-year material cannot reopen an earlier assessment.

Information used to reopen an escaped-assessment proceeding must relate to the very assessment period sought to be reopened; later-period discoveries, without connecting material, cannot justify reopening an earlier year. Where that jurisdictional basis fails, a consequential penalty cannot stand. The appellate and revisional authorities may admit form IXC declarations as additional evidence when earlier non-production was due to sufficient cause or bona fide mistake, and may grant relief accordingly. In a best judgment assessment, reasonable deduction may be allowed for tax-free goods, but an estimated deduction for tax-paid goods is not permissible without supporting documentary basis.

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Issues: (i) whether section 18(1) of the Bihar Sales Tax Act, 1959 could be invoked on the basis of information relating only to a later period so as to reopen assessment for an earlier year; (ii) whether penalty under section 18(2) of the Bihar Sales Tax Act, 1959 could stand when the assessment under section 18(1) itself was unsustainable; (iii) whether declarations in form IXC produced at the appellate stage could be taken into evidence and whether deduction on account of tax-free and tax-paid goods could be allowed in a best judgment assessment.

Issue (i): whether section 18(1) of the Bihar Sales Tax Act, 1959 could be invoked on the basis of information relating only to a later period so as to reopen assessment for an earlier year.

Analysis: The statutory precondition under section 18(1) is the existence of information in the possession of the prescribed authority leading to satisfaction that turnover for the relevant period has escaped assessment. The information must relate to the period under assessment. A discovery of suppressed transactions in a later year cannot, without material connecting it to the earlier assessment year, justify reopening of that earlier year. Best judgment estimation may be made only after jurisdiction is validly assumed on the basis of relevant material for the period in question.

Conclusion: The invocation of section 18(1) for the earlier year was not justified and the answer was in favour of the assessee.

Issue (ii): whether penalty under section 18(2) of the Bihar Sales Tax Act, 1959 could stand when the assessment under section 18(1) itself was unsustainable.

Analysis: Penalty under section 18(2) is consequential to a valid proceeding under section 18(1). Where the foundational assumption of jurisdiction under section 18(1) fails, the ancillary penal power cannot survive. In the absence of a legally sustainable escaped-assessment proceeding, the penalty lacks support.

Conclusion: The penalty under section 18(2) was not legally sustainable and this issue was decided in favour of the assessee.

Issue (iii): whether declarations in form IXC produced at the appellate stage could be taken into evidence and whether deduction on account of tax-free and tax-paid goods could be allowed in a best judgment assessment.

Analysis: The appellate authority and the revisional forum possess power to admit additional evidence, including statutory declaration forms, where sufficient cause or bona fide mistake prevented their earlier production, and may set aside the assessment for fresh enquiry. As to deductions in a best judgment assessment, tax-free goods cannot be brought to tax, and a reasonable deduction for such goods may be allowed by estimate or otherwise. But no deduction is available for tax-paid goods out of suppressed turnover unless the necessary documentary basis is established; a mere estimated claim is insufficient.

Conclusion: The appellate/revisional authorities could take the declarations into evidence and grant appropriate relief, which was in favour of the assessee; however, the claim for estimated deduction in respect of tax-paid goods was rejected and decided in favour of the department.

Final Conclusion: The references were answered partly in favour of the assessee and partly in favour of the department, with the escaped-assessment foundation and consequential penalty set aside, while the assessee succeeded only to the extent indicated on appellate reception of declaration forms and deduction for tax-free goods.

Ratio Decidendi: Information under an escaped-assessment provision must relate to the very assessment period sought to be reopened, and a later-period discovery cannot, without connecting material, justify reopening an earlier year; consequential penalty cannot survive once the jurisdictional basis fails.

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