Reassessment on later definite information upheld where disclosed turnover was under-taxed through wrongly granted deductions.

Section 11-A of the Punjab General Sales Tax Act, 1948 was construed to permit reassessment not only for escaped turnover but also where disclosed turnover had been under-taxed because deductions or exemptions were wrongly granted on later definite information. The court treated "assess" as encompassing tax liability, and held that earlier allowance of deductions did not bar reopening when the deductions were found to be ungenuine or fictitious. The reassessment notices were also upheld because they disclosed the basis of reopening, referred to the alleged false deductions, and jurisdictional or procedural objections such as venue, short adjournments, and non-supply of copies did not invalidate the proceedings on the facts stated.

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Issues: (i) whether the Assessing Authority could reopen assessment under section 11-A of the Punjab General Sales Tax Act, 1948, to withdraw deductions earlier allowed under section 5(2)(a)(ii) on the basis of later definite information; (ii) whether the impugned reassessment notices were invalid for want of jurisdiction, vagueness, absence of definite information, or improper venue.

Issue (i): whether the Assessing Authority could reopen assessment under section 11-A of the Punjab General Sales Tax Act, 1948, to withdraw deductions earlier allowed under section 5(2)(a)(ii) on the basis of later definite information.

Analysis: Section 11-A was construed as covering two distinct situations, namely escaped turnover and under-assessment. The expression "assess" in a taxing statute was held to mean tax and not merely determine. Where definite information shows that tax on disclosed turnover was not levied because deductions or exemptions were wrongly granted, the disclosed turnover is treated as under-taxed and reassessment is permissible. The earlier assessment did not create finality against reassessment when later information showed that the deductions claimed were ungenuine or fictitious.

Conclusion: The power to reassess extended to bringing to tax turnover earlier left untaxed because of illegal or wrong deductions, and the challenge to jurisdiction on that basis failed.

Issue (ii): whether the impugned reassessment notices were invalid for want of jurisdiction, vagueness, absence of definite information, or improper venue.

Analysis: The record showed transfer of the assessment file under rule 39 of the Punjab General Sales Tax Rules, 1949, and the notices themselves disclosed the basis of reopening by stating that deductions under section 5(2)(a)(ii) had been found ungenuine or fictitious and by naming the purchasing dealers who had denied purchases. The existence of definite information was a matter for determination in the reassessment proceedings, and the petitioner could not resist the notices without appearing before the authority. Allegations regarding venue, short adjournments, non-supply of copies, and alleged bias did not affect the legality of the notices on the facts stated.

Conclusion: The reassessment notices were held valid and no jurisdictional or procedural infirmity was established.

Final Conclusion: The petition challenging the reassessment proceedings failed in its entirety, and the reassessment action was left undisturbed.

Ratio Decidendi: Section 11-A of the Punjab General Sales Tax Act, 1948 authorises reassessment not only where turnover has escaped assessment, but also where disclosed turnover has been under-taxed because deductions or exemptions were wrongly granted on later definite information.

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