Reassessment finality bars later challenge in penalty proceedings, while reopening under the correct sales tax provision remains valid.

Reassessment initiated under section 14(4) of the Andhra Pradesh General Sales Tax Act was not invalid merely because it was not brought under section 14-B, since the case concerned reopening on the basis that the first sale was not genuine rather than estimation of price under section 14-B. After the reassessment had attained finality, the assessee could not re-agitate in penalty proceedings the legality of the reopening; only the quantum of penalty remained in issue. The penalty, as reduced by the Tribunal from three times to two times the tax on escaped turnover, was upheld.

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Issues: (i) whether reassessment and penalty proceedings could be said to be invalid because they were not initiated under section 14-B of the Andhra Pradesh General Sales Tax Act, 1957; (ii) whether, after the reassessment had attained finality, the assessee could challenge in penalty proceedings the legality of the reopening and the levy of penalty on the escaped turnover.

Issue (i): whether reassessment and penalty proceedings could be said to be invalid because they were not initiated under section 14-B of the Andhra Pradesh General Sales Tax Act, 1957.

Analysis: The proceedings for reopening were in fact initiated under section 14(4) of the Act and not under section 14-B. The turnover related to assessment years 1980-81 and 1981-82, and the case was treated as one of ignoring the first sale as not genuine rather than making any estimation of price under section 14-B. On that basis, the objection that section 14-B governed the case was unsustainable.

Conclusion: The challenge based on section 14-B failed and was decided against the assessee.

Issue (ii): whether, after the reassessment had attained finality, the assessee could challenge in penalty proceedings the legality of the reopening and the levy of penalty on the escaped turnover.

Analysis: Once the reassessment proceedings had become final, the assessee could not reopen in penalty proceedings the question whether the reopening itself was unsustainable in law. The validity of the penalty proceedings was not in dispute, and the only question was the quantum of penalty. The authority had levied penalty at three times the tax due on the escaped turnover, and the Tribunal reduced it to two times.

Conclusion: The assessee could not successfully attack the reopening in penalty proceedings, and the penalty as reduced by the Tribunal was upheld.

Final Conclusion: The tax revisions failed, and the orders of penalty, as modified by the Tribunal, were left undisturbed.

Ratio Decidendi: Where reassessment proceedings have attained finality, their legality cannot be re-agitated in subsequent penalty proceedings, and an objection based on an inapplicable reopening provision will not invalidate a reassessment initiated under the correct statutory power.

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