Industrial incentive certification controls deferment; reassessment cannot rest on a mere change of opinion after appellate merger.

Where an incentive scheme ties sales tax deferment to certification by the competent industrial authority, the assessing officer cannot disregard that certification and adopt a narrower view of the unit's commencement of commercial production. On the facts stated, the eligibility certificates and related clarification recognised 20 January 2000 as the start of the unit's own manufacture and sale, so deferment from that date was available. Reassessment could not then be sustained absent escapement or under-assessment of turnover; a mere change of opinion on eligibility, especially after the original assessment had merged with appellate orders, did not confer jurisdiction to reopen concluded assessments. The reassessment orders were therefore set aside.

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Issues: (i) whether the industrial unit was entitled to deferment of sales tax from 20 January 2000 on the basis of the eligibility certificates issued by the Director of Industries, and (ii) whether reassessment could be sustained merely by treating the original allowance of deferment as erroneous and by reopening concluded assessments after appellate affirmation.

Issue (i): whether the industrial unit was entitled to deferment of sales tax from 20 January 2000 on the basis of the eligibility certificates issued by the Director of Industries.

Analysis: The incentive scheme under the Industrial Policy Resolution, 1992 and the notifications issued under Section 7 of the Orissa Sales Tax Act, 1947 made the Director of Industries the competent authority to certify eligibility for deferment. The materials on record showed that the unit initially undertook conversion work for a third party and that its own manufacture and sale commenced only from 20 January 2000. The subsequent clarification, the form E(92) certificate and the eligibility certificate all recognized that date as the point from which the unit began manufacturing and selling its own products. Incentive provisions were required to receive a liberal and purposive construction so that the benefit was real and substantial, and the taxing authority could not substitute its own view for the certification granted by the competent industrial authority.

Conclusion: The unit was entitled to deferment of sales tax from 20 January 2000, and the Director of Industries' certification could not be ignored by the assessing authority.

Issue (ii): whether reassessment could be sustained merely by treating the original allowance of deferment as erroneous and by reopening concluded assessments after appellate affirmation.

Analysis: Rule 12(8) of the Central Sales Tax (Orissa) Rules permits reassessment only where turnover has escaped assessment or has been under-assessed. No such statutory basis existed here, as there was no concealment or fresh material relating to turnover. The reassessment was founded only on a different view of the starting point of eligibility, which amounted to a mere change of opinion and an impermissible review of the earlier assessment. In addition, once the original assessment orders had been confirmed in appeal, they merged with the appellate orders, and the assessing authority could not reopen them by invoking reassessment power.

Conclusion: Reassessment was not permissible, and the reopening orders lacked jurisdiction.

Final Conclusion: The denial of deferment and the consequent reassessment demand could not stand in law, and the writ petitions succeeded with the impugned reassessment orders set aside.

Ratio Decidendi: Where an incentive scheme makes industrial eligibility dependent on certification by the competent industrial authority, the taxing officer cannot disregard that certification by adopting a narrower view of commercial production; reassessment is permissible only on statutory grounds such as escapement or under-assessment, and not on a mere change of opinion after merger with the appellate order.

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