Reassessment based on cancelled dealer registrations requires statutory publication and fair hearing; internal communications alone are insufficient.

Reassessment under section 11-A of the Punjab General Sales Tax Act could be founded on information showing that purchasing dealers were not genuine dealers, including facts that later came to light, so the challenge based on absence of fresh material failed. However, the reassessment was invalid because the Assessing Authority relied on an internal departmental communication without proving publication of cancellation of registration certificates in the official Gazette and refused to summon records or witnesses, thereby denying a fair opportunity to rebut the allegation. The reassessment order was quashed and the matter remitted for fresh decision in accordance with law.

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Issues: (i) Whether reassessment could be made under section 11-A of the Punjab General Sales Tax Act on the basis of information that the purchasing dealers were not genuine dealers. (ii) Whether the reassessment order was vitiated for breach of natural justice in refusing to summon records and proceed on a departmental communication without proof of publication of cancellation of registration certificates in the official Gazette.

Issue (i): Whether reassessment could be made under section 11-A of the Punjab General Sales Tax Act on the basis of information that the purchasing dealers were not genuine dealers.

Analysis: Reassessment is not confined to cases where the Assessing Authority discovers wholly new assessment material in the narrow sense of fresh returns or documents. Information that can justify reassessment may relate to facts as well as law. If, at a later stage, it comes to light that declarations in form S.T. XXII were furnished by dealers whose registrations had already stood cancelled in accordance with law, the authority may act on that information to protect revenue.

Conclusion: The reassessment could not be rejected on the ground that the material already on record barred action under section 11-A; this contention failed.

Issue (ii): Whether the reassessment order was vitiated for breach of natural justice in refusing to summon records and proceed on a departmental communication without proof of publication of cancellation of registration certificates in the official Gazette.

Analysis: Rule 12(2) required particulars of cancelled registration certificates to be notified in the official Gazette as soon as possible. Until that statutory publication was shown, a selling dealer could not be fixed with knowledge of cancellation merely on the basis of an internal departmental communication. The Assessing Authority, acting quasi-judicially, was bound by fair play and natural justice to permit the assessee to produce evidence and probe the basis of the allegation regarding cancellation and publication. Refusal to summon the officer and records deprived the assessee of a fair opportunity and vitiated the procedure.

Conclusion: The reassessment order was vitiated for breach of natural justice and non-compliance with the statutory publication requirement; this contention succeeded.

Final Conclusion: The reassessment order was quashed and the matter was sent back for fresh decision in accordance with law, with costs awarded to the assessee.

Ratio Decidendi: Information justifying reassessment may include facts or law subsequently coming to light, but revenue cannot sustain adverse reassessment action against a dealer without complying with the statutory publication requirement and the minimum safeguards of natural justice in quasi-judicial proceedings.

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