Deemed assessment and reopening under sales tax law sustained for one period but set aside for lack of factual foundation in another.

Section 11E(1) of the Bengal Finance (Sales Tax) Act, 1941 operated as an overriding deeming provision notwithstanding earlier initiation of assessment under section 11(1), so the deemed assessment for the period ending 31 March 1991 was valid. The reopening under section 11E(2) was also not invalid merely because the show cause notice was issued by one Deputy Commissioner and the final order by his successor, since the proceeding continued on the original prima facie satisfaction. However, reopening for the period ending 31 March 1992 failed because the report relied on did not supply any factual basis for that period, so the statutory satisfaction was unsupported and that reopening was set aside.

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Issues: (i) Whether section 11E(1) of the Bengal Finance (Sales Tax) Act, 1941 applied to the period ending 31 March 1991 notwithstanding that a proceeding had earlier been initiated under section 11(1) and the returns were said to have been filed late; (ii) Whether the order reopening the deemed assessment for the period ending 31 March 1991 under section 11E(2) was invalid because the show cause notice was issued by one Deputy Commissioner and the final order was passed by his successor; and (iii) Whether the reopening of the deemed assessment for the period ending 31 March 1992 was sustainable when the report relied upon did not furnish any factual foundation for that period.

Issue (i): Whether section 11E(1) of the Bengal Finance (Sales Tax) Act, 1941 applied to the period ending 31 March 1991 notwithstanding that a proceeding had earlier been initiated under section 11(1) and the returns were said to have been filed late.

Analysis: Section 11E(1) was held to be an overriding provision operating notwithstanding section 11(1). The earlier initiation of assessment under section 11(1) by notice in Form VI did not exclude the statutory deeming effect under section 11E(1). The provision was treated as applicable to eligible periods, and the fact that returns were filed beyond the prescribed date did not displace the operation of section 11E(1), since the provision did not make timely filing a condition for its application in the manner suggested.

Conclusion: Section 11E(1) applied to the period ending 31 March 1991, and the deemed assessment was validly treated as having been made.

Issue (ii): Whether the order reopening the deemed assessment for the period ending 31 March 1991 under section 11E(2) was invalid because the show cause notice was issued by one Deputy Commissioner and the final order was passed by his successor.

Analysis: The notice under section 11E(2) was founded on a report and embodied the requisite prima facie satisfaction. That satisfaction was treated as objective and capable of being acted upon by the successor-in-office who took up the proceeding. The statutory proceeding was not held to lapse merely because the officer who issued the notice did not himself pass the final order. The successor's order was treated as a continuation of the same lawful proceeding and as reflecting concurrence with the initial satisfaction.

Conclusion: The reopening order for the period ending 31 March 1991 was not invalid on the ground that the notice and final order were issued by different officers.

Issue (iii): Whether the reopening of the deemed assessment for the period ending 31 March 1992 was sustainable when the report relied upon did not furnish any factual foundation for that period.

Analysis: The report relied upon did not ascertain the amount of unpaid tax for the period ending 31 March 1992 and expressly indicated that the relevant material was not available. As a result, the order reopening that deemed assessment lacked the factual foundation necessary to sustain action under section 11E(2). The State also accepted that this part of the order could not be defended on the materials then available.

Conclusion: The reopening order for the period ending 31 March 1992 was unsustainable and was set aside.

Final Conclusion: The decision sustained the reopening and deemed assessment for the period ending 31 March 1991, but annulled the reopening for the period ending 31 March 1992, resulting in partial relief to the assessee.

Ratio Decidendi: A deemed assessment under an overriding sales tax provision may continue to operate despite an earlier assessment notice and even where a successor officer passes the final order, but reopening must rest on a valid factual foundation supporting the statutory satisfaction required for action.

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