Finalised tax assessments protected from reopening after departmental circular and Government ratification

Finalised assessments for the relevant period could not be reopened for additional sales tax on pulses flour once the department's circular and the later Government Order expressly protected completed assessments from reassessment. The text notes that, after the High Court's ruling on the taxability of flour, the department accepted that assessments finalised up to 31 March 1993 were not to be reopened, and that position was ratified by the Government. Reassessment made contrary to that administrative instruction was therefore not sustainable in law, and the completed assessments were set aside.

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Issues: Whether assessments already finalised could be reopened after the departmental circular dated 16 September 1993 and the Government Order dated 9 June 1998, in respect of additional sales tax on pulses flour.

Analysis: The dispute arose because pulses flour had been treated as taxable notwithstanding earlier departmental practice. After the High Court decision on the taxability of flour, the department issued a circular accepting that past assessments finalised up to 31 March 1993 should not be reopened, and the Government subsequently ratified that instruction. The circular and the Government Order expressly protected finalised assessments from reopening for the relevant period, and the challenge was confined to reassessment made after the circular. In that situation, reopening of completed assessments could not be sustained in law, at least so far as additional sales tax was concerned.

Conclusion: The reopening of the petitioners' completed assessments subsequent to the circular was illegal and the reassessments were set aside in respect of additional sales tax. The writ petitions were allowed.

Ratio Decidendi: Where the competent department, later ratified by the Government, accepts that finalised assessments for a past period are not to be reopened, reassessments made contrary to that administrative decision cannot be sustained.

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