Jurisdictional defect in reassessment notices under Bihar finance law rendered the reopening invalid and quashable.

Reassessment under section 19(1) of the Bihar Finance Act, 1981 could be initiated only on the basis of information leading the authority to form satisfaction that turnover had escaped assessment, and only by a notice in the prescribed form disclosing that statutory basis and the proposal to reopen under section 19(1) read with section 17(2) and rule 20. Notices that merely referred to an audit objection and required appearance, without recording the requisite satisfaction or citing the reassessment provision, were held to be jurisdictionally defective. The Patna HC therefore treated the reassessment proceeding as invalid and liable to be quashed.

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Issues: Whether the notices issued for reopening the concluded assessment and the consequential reassessment under section 19(1) of the Bihar Finance Act, 1981 were valid in law.

Analysis: The statutory scheme required the prescribed authority, before initiating reassessment, to possess information leading to satisfaction that reasonable grounds existed to believe that turnover had escaped assessment, and to serve a notice in the prescribed manner and form. The notice had to disclose the statutory basis of action, the authority's satisfaction, and the proposal to reassess under section 19(1) read with section 17(2) and rule 20. The notices issued in the present case merely referred to an audit objection and called for appearance, without mentioning section 19(1), recording the requisite satisfaction, or conforming to the prescribed form. Such a notice was not a mere procedural irregularity but went to the root of jurisdiction.

Conclusion: The notices were invalid, the reassessment proceeding was without jurisdiction, and the reassessment order was liable to be quashed in favour of the assessee.

Ratio Decidendi: A reassessment proceeding under section 19(1) of the Bihar Finance Act, 1981 can be validly initiated only by a notice that complies with the prescribed statutory form and expressly reflects the authority's satisfaction on reasonable grounds; absence of such notice creates a jurisdictional defect rendering the proceeding invalid.

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