Revisional power cannot reopen a valid assessment merely because later law takes a different view on exemption.

A completed assessment made in accordance with the law then prevailing cannot be treated as erroneous merely because a later judgment reverses that legal position. Revisional power under section 31(1) of the Assam Sales Tax Act, 1947 applies only where the assessment order was erroneous and prejudicial to revenue on the law existing when it was made. Because the assessments were finalised when the courts recognised the State exemption as a general exemption under section 8(2A) of the Central Sales Tax Act, 1956, the subsequent change in law did not justify revision. The order cancelling the assessments was therefore not sustainable, and the assessee succeeded.

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Issues: Whether the revisional authority could cancel the assessments on the ground that they were erroneous and prejudicial to the revenue after the prevailing law on exemption under the Central Sales Tax Act had later been reversed.

Analysis: The assessments had been made when the then prevailing legal position, as recognised by the Court and other courts, treated the State exemption as a general exemption for the purpose of section 8(2A) of the Central Sales Tax Act, 1956. A completed assessment cannot be characterised as erroneous merely because a later judgment takes a different view. The power under section 31(1) of the Assam Sales Tax Act, 1947 is attracted only when the order is erroneous and prejudicial to the revenue on the law as it stood when the assessment was made. The later reversal of the legal position did not authorise reopening of assessments already finalised on the earlier law.

Conclusion: The revisional order cancelling the assessments was not sustainable, and the assessee succeeded.

Ratio Decidendi: An assessment validly completed in accordance with the law then prevailing cannot be reopened in revision merely because the law is subsequently altered or overruled; revisional power requires the assessment order to be erroneous and prejudicial to revenue on the law applicable at the time of the order.

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