Extended reassessment limitation requires proof of concealment or knowingly false returns; mere reliance on purchaser certificates is insufficient.

Extended limitation for reassessment under the Bombay Sales Tax Act applies only where concealment of turnover, concealment of material particulars, or knowing furnishing of incorrect returns is proved. The assessee had produced the purchaser's certificate in the ordinary course of business, and the record showed no evidence that it was false, forged, fictitious, or known by the assessee to be untrue. In the absence of proof of conscious concealment or deliberate falsity, the longer reassessment period could not be invoked, and proceedings initiated after the ordinary limitation period were barred.

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Issues: Whether reassessment initiated after five years was barred under section 35(1)(c) of the Bombay Sales Tax Act, 1959, and whether the extended period of eight years under section 35(1)(b) was available on the ground that the assessee had concealed sales or knowingly furnished incorrect returns.

Analysis: The reassessment was founded on the view that the assessee wrongly claimed deduction on sales supported by form No. 16, because the purchasing dealer was said not to be a licensed dealer. The decisive question, however, was whether the assessee had concealed the sales or any material particulars, or had knowingly furnished incorrect returns so as to attract the longer limitation period. The record disclosed that the assessee produced the purchaser's certificate in the ordinary course of business, and there was no evidence that the certificate was known to be false, forged, or fictitious, or that the assessee had acted with knowledge of falsity. In the absence of evidence of concealment or conscious furnishing of incorrect returns, the extended limitation could not be invoked.

Conclusion: The reassessment could not be sustained under the eight-year period, and the proceedings initiated after five years were barred by limitation; the questions were answered in favour of the assessee.

Final Conclusion: The reference was decided by holding that the department failed to establish the statutory ingredients necessary to extend the reassessment period, and the reassessment was therefore invalid.

Ratio Decidendi: Extended limitation for reassessment applies only where concealment of turnover, concealment of material particulars, or knowing furnishing of incorrect returns is proved on the record.

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