Provisional assessment and attachment upheld where objective material supported a reasoned belief of tax evasion and revenue risk.

Provisional assessment and provisional attachment under sections 41B and 48A were upheld where the authority had objective material to form a reasoned belief that the dealer had evaded tax and that attachment was needed to protect revenue. Search and investigation at the factory and head office disclosed transactions shown as branch transfers that appeared to be pre-determined sales, with diversion of goods to buyers in Maharashtra without C forms. That material provided a rational basis for the statutory satisfaction, so the challenge based on absence of justification failed. The earlier decision cited by the dealer was distinguished because it involved no comparable material.

---

---

Issues: Validity of initiation of provisional assessment and provisional attachment of the dealer's property on the basis of material indicating evasion of tax.

Analysis: The power to make provisional assessment under section 41B and provisional attachment under section 48A is conditioned on the authority having reason to believe, on objective material, that the dealer has evaded tax and that attachment is necessary to protect the revenue. On the facts, search and investigation at the factory and head office revealed transactions described as branch transfers which appeared to be pre-determined sales and diversion of goods to buyers in Maharashtra without C forms. The material collected furnished a rational basis for forming the requisite belief. The challenge based on absence of justification was not accepted, and the earlier decision relied on by the petitioner was distinguished on facts because there the authority had no comparable material.

Conclusion: The initiation of provisional assessment and the order of provisional attachment were held to be lawful and justified, and the challenge failed.

---