Revisional power must rest on relevant material; unsupported sale price findings fail, while reassessed tax interest can still apply.

A revisional authority may exercise suo motu power to examine an assessment only on relevant material and judicially, not on conjecture or unsupported market assumptions. The Gauhati HC held that sale price cannot be fixed merely on market information and departmental reports without dependable proof such as sale receipts, so the revisional interference on that basis was unsustainable. The Court sustained the disallowance of the claimed shortage where the larger claim lacked valid support. It also accepted that interest on additional demand arising from reassessment depends on the tax finally assessed and cannot be avoided simply because the original return was paid in time.

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Issues: (i) Whether the revisional authority could invoke suo motu power under section 20(1) and determine the sale price of onions on the basis of market information and departmental material so as to cancel the assessment and direct fresh assessment; (ii) whether disallowance of the claimed shortage and levy of interest on the additional demand could be sustained.

Issue (i): Whether the revisional authority could invoke suo motu power under section 20(1) and determine the sale price of onions on the basis of market information and departmental material so as to cancel the assessment and direct fresh assessment.

Analysis: The revisional power under section 20(1) authorises examination of the record and such enquiry as the authority deems necessary where the assessment order is erroneous and prejudicial to the interests of revenue. The power is wide and is not confined rigidly to the material that was before the assessing authority, but it must still be exercised judicially, on relevant factual material, and not on conjecture or assumption. Public debate, assembly questions and audit objections were not treated as the basis of the impugned action; however, the sale price adopted by the revisional authority was supported only by market information and departmental reports, without authentic evidence such as sale receipts or other dependable proof for the relevant periods. That foundation was insufficient to sustain the finding on market price.

Conclusion: The revisional interference on the question of sale price was unsustainable and was set aside in favour of the assessee.

Issue (ii): Whether disallowance of the claimed shortage and levy of interest on the additional demand could be sustained.

Analysis: On shortage, the revisional authority accepted only a limited margin and found the larger claim unsupported by valid material; that conclusion was not shown to be perverse. On interest, the statute made interest depend on the amount of tax finally assessed and on default in payment by the due date. Since the expression "tax payable" was construed as the tax finally assessed, interest on the additional demand arising from reassessment could not be denied merely because the original returns had been paid in time. The challenge to interest therefore failed, while the assessee succeeded only to the extent that the main revisional basis on sale price was invalid.

Conclusion: The disallowance of shortage was upheld, and the levy of interest could not be disturbed on the reasoning accepted by the Court.

Final Conclusion: The writ petition succeeded only in part: the revisional order and consequential reassessment were set aside insofar as they rested on the determined sale price, but the finding on shortage was sustained and the matter was left to be freshly assessed only within the limited direction indicated by the Court.

Ratio Decidendi: Revisional power to correct an assessment for being erroneous and prejudicial to revenue must rest on relevant material and lawful enquiry, not on conjecture, while interest on reassessed tax turns on the tax finally assessed under the statute.

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