Fresh material required for reassessment; second-sale exemption for cement gunny bags failed without proof of prior taxable sale.

Reassessment under the Andhra Pradesh General Sales Tax Act could not be sustained without fresh material different from what was available at the original assessment; mere failure to notice the correct position earlier was insufficient, so the reassessments for two years were set aside. For exemption on second sales of cement gunny bags, the assessee had to prove that the first seller was real and identifiable and that the goods had already suffered tax or were liable to tax on the first sale in the State; rule 45(3)(b) was only one mode of proof, not the exclusive one. On the facts, the hawkers were not identifiable and prior taxation was not proved, so the second-sale exemption was disallowed for the third year.

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Issues: (i) Whether the successor assessing authority could reopen the completed assessments and withdraw the exemption in the absence of fresh material; (ii) whether the assessee was entitled to exemption on the footing that the turnover represented second sales of cement gunny bags.

Issue (i): Whether the successor assessing authority could reopen the completed assessments and withdraw the exemption in the absence of fresh material.

Analysis: Reopening under section 14(4)(cc) of the Andhra Pradesh General Sales Tax Act, 1957 was held to be permissible only when there was fresh material, distinct from what was available at the time of the original assessment, which justified reassessment. Mere failure to notice the correct position at the first assessment, or lack of diligence on the part of the assessing authority, was not enough to invoke the revisional or reassessment power. As there was admittedly no fresh material in the present case, the reassessment could not be sustained.

Conclusion: The reassessment was not justified and the assessee succeeded on this issue.

Issue (ii): Whether the assessee was entitled to exemption on the footing that the turnover represented second sales of cement gunny bags.

Analysis: For claiming exemption on the ground of second sale, the assessee had to establish that the first seller was real and identifiable and that the goods had already suffered tax or were liable to tax in the State on the first sale. The method contemplated by rule 45(3)(b) of the Andhra Pradesh General Sales Tax Rules, 1957 was only one mode of proof and did not exclude other oral or documentary evidence. However, in the present case, the alleged hawkers were not identifiable and there was no proof that the gunny bags had suffered tax on the first sale within the State. The claim of second sale exemption therefore failed.

Conclusion: The assessee was not entitled to exemption on this issue and the revenue succeeded.

Final Conclusion: The common order was set aside only to the extent of the reassessments for two years, while the disallowance of second sale exemption for the third year was sustained, leaving the assessee partly successful overall.

Ratio Decidendi: Reassessment under the relevant sales tax provision requires fresh material not available at the original assessment, and exemption for second sales is available only when the first seller is real and identifiable and the prior taxable sale is proved.

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