Reassessment beyond limitation needs prior sanction and natural justice; exemption for washing soap and detergent cakes was upheld.

Reassessment beyond the normal limitation under section 21 required prior Commissioner approval based on recorded satisfaction, and the assessee had to be afforded a fair opportunity before sanction; a notice issued before such approval was without jurisdiction, making the reassessment void. The record also showed that the eligibility certificate under section 4A covered both washing soap and detergent cakes, so exemption could not be denied on detergent cakes. On both grounds, the reassessment was quashed in entirety and the assessee's exemption claim was upheld.

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Issues: (i) whether notice for reassessment under section 21 could be issued after expiry of the normal limitation without prior sanction of the Commissioner and without affording the assessee an opportunity of hearing; (ii) whether the assessee was entitled to exemption in respect of both washing soap and detergent cakes under the eligibility certificate granted under section 4A.

Issue (i): whether notice for reassessment under section 21 could be issued after expiry of the normal limitation without prior sanction of the Commissioner and without affording the assessee an opportunity of hearing.

Analysis: The extended period for initiating reassessment required prior approval of the Commissioner, and the power could be exercised only on recorded satisfaction that reopening was just and expedient. The proviso to section 21(2) necessarily attracted the principles of natural justice because the assessee's rights were directly affected. The sanction order, however, disclosed no reasons and no opportunity of hearing was given before approval was granted. The notice was also issued before the sanction was granted, which made the reassessment proceedings unauthorised and without jurisdiction.

Conclusion: The notice and the sanction for reassessment were illegal and void, and the ex parte reassessment based on them could not be sustained, in favour of the assessee.

Issue (ii): whether the assessee was entitled to exemption in respect of both washing soap and detergent cakes under the eligibility certificate granted under section 4A.

Analysis: The later order of the Commissioner under section 4-A(3) confirmed that the eligibility certificate covered both items and that the cancellation proceedings on the same ground had failed. The factual and administrative record therefore supported the assessee's entitlement to exemption on both washing soap and detergent cakes.

Conclusion: The assessee was entitled to exemption on both items, and the reassessment rejecting the benefit on detergent cakes was and unsustainable, in favour of the assessee.

Final Conclusion: The reassessment proceedings were quashed in entirety because the notice had been issued without lawful prior sanction and the assessee's entitlement to exemption on the relevant goods was established.

Ratio Decidendi: Where reassessment beyond the normal limitation is conditioned upon prior sanction on recorded satisfaction, the sanction must be reasoned and the assessee must be afforded a fair opportunity before approval is granted; a notice issued before such sanction is without jurisdiction.

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