Deemed assessment reopening requires statutory grounds of concealment or incorrect particulars; short payment alone is insufficient.

A reopening notice in Form IX addressed to erstwhile partners in the trade name was not invalid merely for that description, because the proceeding related to liabilities arising during the partnership period and the recipient understood and participated without prejudice. Reopening of a deemed assessment under section 11E(2), however, requires the specific statutory grounds of concealment of sales or furnishing of incorrect particulars in the return resulting in reduced tax. Short payment of turnover tax or non-payment of interest alone is not enough to invoke that power. The reopening was therefore invalid, while the procedural objection to the notice failed.

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Issues: (i) Whether the notice initiating reopening was invalid because it was issued in form IX under rule 79 and addressed to the erstwhile partners in the trade name rather than in the proprietor's name. (ii) Whether the deemed assessment could be reopened under section 11E(2) merely on the ground of short payment of turnover tax and non-payment of interest.

Issue (i): Whether the notice initiating reopening was invalid because it was issued in form IX under rule 79 and addressed to the erstwhile partners in the trade name rather than in the proprietor's name.

Analysis: The notice was not vitiated by the form used or by the manner in which the addressees were described. The proceeding related to liabilities arising during the period when the partnership existed, and service on one of the persons concerned was sufficient for the firm's liability. The mere mention of rule 79 did not invalidate the proceeding because the applicant understood the nature of the proceeding, participated in it, and suffered no prejudice. The defect, if any, was only technical and did not affect the substance of the notice.

Conclusion: The notice was held to be valid and the objection to its form and description of the addressees was rejected.

Issue (ii): Whether the deemed assessment could be reopened under section 11E(2) merely on the ground of short payment of turnover tax and non-payment of interest.

Analysis: Reopening under section 11E(2) is permissible only where there is concealment of sales or particulars thereof, or furnishing of incorrect statements or particulars in the return, and such default has resulted in reduction of tax payable. The recorded grounds referred only to understated return, short payment of turnover tax, and consequential interest, without any finding of concealment or incorrect particulars. Non-payment of tax or interest by itself is not one of the statutory grounds for reopening a deemed assessment. The language of the provision could not be expanded to cover cases not brought within it by the legislature.

Conclusion: The reopening of the deemed assessment was invalid and was set aside, along with the revisional order.

Final Conclusion: The challenge succeeded only to the extent that the reassessment proceedings were quashed, while the notice itself was not struck down on the procedural objections raised.

Ratio Decidendi: Reopening of a deemed assessment can be made only on the specific statutory grounds expressly provided, and a mere short payment of tax or interest, without concealment or incorrect particulars in the return, is insufficient to invoke the reopening power.

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