Reassessment of dealers under the turnover ceiling is valid when suppressed turnover takes them outside the section 7 scheme.

Section 16 of the Tamil Nadu General Sales Tax Act, 1959 was held to permit reopening and reassessment of turnover for dealers who had initially opted for taxation under section 7. The Court reasoned that section 7 applied only while the dealer remained within the prescribed turnover ceiling; once suppressed turnover was added and the redetermined total turnover crossed that limit, liability shifted to section 3(1), making reassessment under section 16 available. The later insertion of section 16-A did not change that position, as it was treated as declaratory and reflective of the combined effect of sections 7, 3 and 16.

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Issues: Whether section 16 of the Tamil Nadu General Sales Tax Act, 1959 authorised reopening and reassessment of turnover in the case of dealers who had opted for taxation under section 7, and whether the later insertion of section 16-A indicated that section 16 was inapplicable to such cases.

Analysis: Section 7 dealt with dealers whose liability was determined with reference to total turnover and who paid tax under a slab-based lump sum scheme. Section 16, by contrast, used the broader expression "turnover" and was not confined to taxable turnover alone. Once suppressed turnover was added and the redetermined total turnover exceeded the ceiling prescribed in section 7, the assessee ceased to fall within section 7 and section 3(1) became applicable, making reassessment under section 16 available. The subsequent enactment of section 16-A did not displace this position; it merely expressed expressly what was already implicit in the combined operation of sections 7, 3 and 16 and was declaratory in nature.

Conclusion: Section 16 applied to reassessment of dealers assessed under section 7, and the reopening and reassessment were valid. The insertion of section 16-A did not show that section 16 was previously inapplicable.

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