Reassessment based on reason to believe fails where reopening is used only to avoid limitation without supporting material.

Reassessment under section 12(8) of the Orissa Sales Tax Act could be initiated only on a genuine reason to believe that turnover had escaped assessment or been under-assessed, and within the prescribed five-year period. Where the record showed no supporting material and the notice was issued merely to prevent the assessment from becoming time-barred, the jurisdictional for reopening was not met. The reopening was therefore invalid, and the notice and assessment orders were liable to be quashed in favour of the assessee.

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Issues: Whether initiation of reassessment proceedings under section 12(8) of the Orissa Sales Tax Act, 1947 was valid when the notice was issued without material showing escaped assessment or under-assessment and was prompted by the need to avoid limitation.

Analysis: Section 12(8) permits reopening only where the dealer's turnover has escaped assessment, been under-assessed, or tax has been compounded when composition is not permissible, and the proceeding must be initiated within five years from the expiry of the relevant year. The notice itself recited a belief of under-assessment, but the record showed that the authority had no supporting material and proceeded only to save the assessment from being time-barred. A statutory power conditioned on a reason to believe cannot be invoked for an extraneous purpose, and a time-bar concern does not satisfy the jurisdictional requirement for reopening.

Conclusion: The initiation of proceedings was invalid, and the notice as well as the assessment orders were liable to be quashed in favour of the assessee.

Final Conclusion: Reassessment power under section 12(8) could be exercised only on the statutory grounds and within the prescribed time, and not to defeat limitation without foundational material.

Ratio Decidendi: A reassessment provision conditioned on a reason to believe of escaped assessment or under-assessment cannot be invoked on extraneous grounds to avoid limitation; absence of jurisdictional material renders the proceeding illegal.

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