Clarificatory reassessment power upheld where wrongly allowed exemption or deduction fell within escaped or under-assessed turnover.

Section 14(4) of the A.P. General Sales Tax Act already empowered reassessment where turnover had escaped assessment or been under-assessed, so a wrong exemption or deduction could be corrected under the existing clauses even before section 14(4)(cc) was inserted. The later insertion of section 14(4)(cc) was therefore clarificatory rather than a new source of power. On the facts, the reassessment was supported by material, and the finding that the turnover related to first sales within the State was not shown to be incorrect, so the reassessment remained valid.

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Issues: Whether section 14(4)(cc) of the A.P. General Sales Tax Act, 1957 was merely clarificatory and could be applied to reassess turnover where exemption or deduction had been wrongly allowed before its insertion, and whether the reassessment made on that basis was valid.

Analysis: The power under section 14(4) already extended to cases where turnover had escaped assessment or been under-assessed. A wrongly granted exemption or deduction, in substance, fell within one of those categories, so the correct tax could be determined under section 14(4)(a) or 14(4)(b) even before section 14(4)(cc) was inserted. The later insertion of section 14(4)(cc) was therefore only clarificatory and did not create a new power. On the facts, the reassessment was supported by material and the finding that the turnover represented first sales within the State was not shown to be incorrect.

Conclusion: Section 14(4)(cc) was held to be clarificatory, and the reassessment was upheld in favour of the department.

Ratio Decidendi: A provision inserted to expressly cover wrongly allowed exemption or deduction is clarificatory if the existing reassessment power already authorises assessment of escaped or under-assessed turnover, and such reassessment may validly be sustained on that basis.

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