Reassessment notice under sales tax law upheld where limitation was in time and prima facie material supported reason to believe.

Reassessment under section 35 of the Bombay Sales Tax Act, 1959 is permissible within eight years where the Commissioner has reason to believe that sales were concealed, material particulars were suppressed, or incorrect returns were knowingly filed. On the facts noted, a notice issued for the 1999-2000 period in February 2008 fell within that limitation period, so the limitation objection failed. The notice was also supported by prima facie material: invoice vehicle numbers allegedly matched two-wheelers and similar vehicles, and inter-State verification indicated that the C forms were not issued by the stated authorities. In writ review, sufficiency of material is not examined where some basis for belief exists, so the reopening could not be quashed.

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Issues: (i) Whether the notice initiating reassessment was barred by limitation under section 35 of the Bombay Sales Tax Act, 1959. (ii) Whether the reassessment notice could be sustained on the basis of the material showing concealment of sales, bogus C forms and incorrect vehicle particulars, so as to satisfy the requirement of reason to believe.

Issue (i): Whether the notice initiating reassessment was barred by limitation under section 35 of the Bombay Sales Tax Act, 1959.

Analysis: Section 35 permits reassessment within eight years where the Commissioner has reason to believe that the dealer has concealed sales or material particulars or has knowingly furnished incorrect returns. The notice was issued on 14 February 2008 for the period 1 April 1999 to 31 March 2000, which fell within the statutory eight-year period. The plea of limitation therefore could not succeed on the facts of the case.

Conclusion: The reassessment notice was not barred by limitation.

Issue (ii): Whether the reassessment notice could be sustained on the basis of the material showing concealment of sales, bogus C forms and incorrect vehicle particulars, so as to satisfy the requirement of reason to believe.

Analysis: The material placed by the Department showed that the vehicle numbers mentioned in the invoices corresponded to scooters, bikes and similar vehicles, which prima facie could not have transported petroleum products in inter-State movement. The Department also relied on verification from other States indicating that the C forms were not issued by the concerned authorities. In writ jurisdiction, sufficiency of material is not to be tested if there is some prima facie basis for belief. The combined notice was therefore supported by material and the statutory requirement of reason to believe was met.

Conclusion: The reassessment notice was validly founded on prima facie material and could not be quashed.

Final Conclusion: The writ petition failed, as the impugned reassessment notices were within time and were supported by material justifying reopening of the assessment.

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