Escaped turnover reassessment and agency sales require primary commercial documents before treating the assessee as seller.

Reopening reassessment for escaped turnover under section 19 of the Kerala General Sales Tax Act requires material that can reasonably support the conclusion that taxable turnover escaped assessment; account statements, later invoices and a bank resolution were insufficient to show that the assessee owned the goods or effected sales, so reopening for 1972-73 and 1973-74 was without jurisdiction. Where the character of transactions depends on an agency arrangement, the primary contracts and appointment documents must be examined to determine whether property passed to the assessee; because the Tribunal relied mainly on invoices and a letter without properly assessing the governing agreements, its finding that the assessee itself made the sales for 1974-75 and 1975-76 could not stand and required fresh disposal.

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Issues: (i) Whether the reassessment proceedings for the assessment years 1972-73 and 1973-74 could be reopened under section 19 of the Kerala General Sales Tax Act on the basis of the materials relied upon by the assessing authority. (ii) Whether the disputed transactions for the assessment years 1974-75 and 1975-76 were sales effected by the assessee or transactions carried out only in the course of an agency arrangement, and whether the Tribunal's finding on that question could be sustained.

Issue (i): Whether the reassessment proceedings for the assessment years 1972-73 and 1973-74 could be reopened under section 19 of the Kerala General Sales Tax Act on the basis of the materials relied upon by the assessing authority.

Analysis: Reopening under section 19 required material capable of reasonably supporting the conclusion that taxable turnover had escaped assessment. The materials relied upon, namely account statements, later invoices, a pro forma invoice, and a bank resolution, did not establish that the assessee had become owner of the goods or had effected sales to the co-operative societies. The evidence of the assistant manager of the principal company supported the assessee's case that the arrangement was one of del credere agency and that the assessee only canvassed orders for commission. The relied-upon materials were either irrelevant to the earlier years or insufficient to establish escaped turnover.

Conclusion: The reassessment proceedings for the years 1972-73 and 1973-74 were illegal and without jurisdiction, and the reopening under section 19 could not be sustained.

Issue (ii): Whether the disputed transactions for the assessment years 1974-75 and 1975-76 were sales effected by the assessee or transactions carried out only in the course of an agency arrangement, and whether the Tribunal's finding on that question could be sustained.

Analysis: The true character of the transactions depended on the agreements between the manufacturer, the sole selling agent, the intermediate agent, and the assessee, together with the letter of appointment giving the assessee sub-agency. Those primary documents were crucial to determine whether property in the goods ever passed to the assessee or whether the assessee merely arranged sales on agency terms. The Tribunal relied mainly on invoices and a letter which did not furnish a sound legal basis for concluding that the assessee had dominion over the goods. The Tribunal also failed to properly consider the evidence explaining the commercial arrangement and thus adopted a defective approach to the issue.

Conclusion: The finding that the assessee itself effected the sales for 1974-75 and 1975-76 could not be sustained, and those appeals had to be remitted for fresh disposal.

Final Conclusion: The order set aside the reassessment for the earlier years and required a fresh factual and legal determination for the later years on the basis of the governing agency documents and evidence.

Ratio Decidendi: Reopening an assessment for escaped turnover requires material reasonably supporting that conclusion, and where the nature of commercial dealings turns on agency arrangements, the primary contracts and evidence explaining the relationship must be examined before concluding that the assessee was the seller.

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