Reassessment cannot rest on a mere change of opinion; fresh material is required to reopen completed sales tax assessments.
Reassessment under section 24 of the Delhi Sales Tax Act, 1975 cannot be sustained on a mere change of opinion. The Commissioner must have reason to believe that turnover escaped assessment, was under-assessed, or that a deduction was wrongly made, and that belief must rest on fresh material, new information, or a relevant change in law. Where the reopening is based only on a notification already in existence at the time of the original assessments, it amounts to a fresh application of mind to the same facts. The revisional remedy under section 46 confirms that reassessment cannot be used as a disguised review, so the reopening was invalid and the reassessment orders were quashed.
Issues: (i) Whether reassessment under section 24 of the Delhi Sales Tax Act, 1975 could be sustained on the basis of a mere change of opinion without fresh material or new information.
Analysis: Section 24 requires the Commissioner to have reason to believe that turnover has escaped assessment, been under-assessed, or that a deduction has been wrongly made. The reassessment was founded on a notification already in existence when the original assessments were made, and no fresh material, information, or change in legal position had arisen thereafter. The reassessment, therefore, amounted only to a fresh application of mind to the same facts. The revisional remedy under section 46 also indicated that reassessment could not be used as a substitute for review.
Conclusion: The reopening of the completed assessments was invalid and the reassessment orders could not be sustained.
Final Conclusion: The writ petition succeeded and the reassessment orders were quashed on the ground that they were based only on a change of opinion, not on any legally sufficient reason to believe.
Ratio Decidendi: Reassessment power cannot be exercised as a disguised review; in the absence of fresh material or information, a mere change of opinion does not satisfy the statutory requirement of reason to believe.
TaxTMI 
AI Drafter ✕
TaxTMI 
