Assessment reopening for wrongly granted exemptions is permissible, but reassessment must still rest on proper material from the record.

Assessment reopening under the Andhra Pradesh General Sales Tax Act could extend to wrongly granted exemption or deduction, and clause (cc) was treated as clarificatory so that escaped turnover or underassessment could be brought to tax even where the original assessment predated the amendment. Reopening was also examined against the absence of fresh material; although the authority had power to reassess, the Tribunal found the action rested on the existing record and not on sufficient new information. The legal challenge therefore failed on the reopening point, and the Tribunal's order was sustained.

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Issues: (i) whether an assessment completed before insertion of clause (cc) in section 14(4) of the Andhra Pradesh General Sales Tax Act, 1957 could be reopened under that provision or under section 14(4)(a) and (b); (ii) whether reopening was barred in the absence of fresh material and amounted to a mere change of opinion.

Issue (i): whether an assessment completed before insertion of clause (cc) in section 14(4) of the Andhra Pradesh General Sales Tax Act, 1957 could be reopened under that provision or under section 14(4)(a) and (b).

Analysis: The power to reopen was held to extend to cases where exemption or deduction had been wrongly granted. Clause (cc) was treated as clarificatory, and the correct tax could be brought to assessment under section 14(4)(a) or 14(4)(b) where the turnover had escaped assessment or been underassessed, even if the final assessment related to a period before the amendment.

Conclusion: The reopening was legally permissible under section 14(4)(a) and 14(4)(b), and the view that clause (cc) could not be applied merely because the original assessment predated its insertion was not accepted.

Issue (ii): whether reopening was barred in the absence of fresh material and amounted to a mere change of opinion.

Analysis: The reassessment was made on the basis of the available record and not on matters outside the record. Although the authority had the power to reopen, the facts showed that the case depended on the existing materials and not on fresh information sufficient to justify interference with the Tribunal's order.

Conclusion: The challenge failed on this ground, and the Tribunal's order was sustained.

Final Conclusion: The revision was dismissed, and the assessee succeeded because the reassessment could not ultimately be disturbed on the facts found by the Tribunal.

Ratio Decidendi: Where exemption or deduction has been wrongly granted, assessment may be reopened under the escaped-assessment or underassessment provisions, but the practical justification for reopening must still be supported by the materials relied upon in the reassessment.

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