Recorded reasons required for reassessment under sales tax law; reopening without objective basis is without jurisdiction

Reassessment under section 35(1) of the Bombay Sales Tax Act, 1959 can be initiated only on recorded objective reasons showing a rational belief that turnover has escaped assessment or been under-assessed. Mere suspicion, or a note sheet entry stating that Form 28 was issued, is not enough because it does not disclose application of mind or the factual basis for reopening a completed assessment. On that footing, the reassessment was without jurisdiction, and the Tribunal was justified in quashing it and rejecting rectification.

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Issues: Whether reassessment proceedings under section 35(1) of the Bombay Sales Tax Act, 1959 were validly initiated on the basis of a recorded reason to believe and whether the Tribunal was justified in quashing the reassessment and rejecting rectification.

Analysis: Reassessment under section 35(1) requires the existence of objective reasons supporting the Commissioner's belief that turnover has escaped assessment or has been under-assessed. The belief cannot rest on mere suspicion, and the reasons must be recorded before jurisdiction is invoked so that the reopening of a completed assessment can be tested for legality. The only entry in the note sheet, stating that Form 28 was issued, did not disclose any reason, any application of mind to the enforcement material, or any factual basis for forming the requisite belief. The reassessment was therefore initiated without lawful assumption of jurisdiction. The Tribunal was right in setting aside the reassessment and in rejecting rectification.

Conclusion: The reassessment proceedings were invalid for want of recorded reasons and valid jurisdictional foundation, and the Tribunal's order quashing the reassessment was upheld in favour of the assessee.

Ratio Decidendi: A completed assessment can be reopened under section 35(1) of the Bombay Sales Tax Act, 1959 only when the assessing authority records objective reasons showing a rational basis for the requisite belief that turnover has escaped assessment; absent such recorded reasons, the reassessment is without jurisdiction.

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