Reassessment and change of opinion: reopening failed where the original assessment had already examined the same material.

Reassessment is impermissible where the original assessment had already examined the relevant material and the reopening is based only on a change of opinion; on that basis, reassessment for 1999-2000 and 2000-01 was held invalid and quashed. Where the earlier assessment did not show consideration of the material forming the basis of reopening, reassessment may be sustained; on that basis, reopening for 1998-99 was upheld and allowed to continue. The operative principle is that reassessment must rest on a legally relevant basis and cannot be founded merely on reconsideration of an issue already decided on the same material.

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Issues: (i) Whether the reassessment proceedings for the assessment years 1999-2000 and 2000-01 were invalid as being based on a mere change of opinion; (ii) Whether the reassessment proceedings for the assessment year 1998-99 were valid.

Issue (i): Whether the reassessment proceedings for the assessment years 1999-2000 and 2000-01 were invalid as being based on a mere change of opinion.

Analysis: The original assessment orders for the said years show that the assessing authority had already examined the nature and calorific value of burnt coal/coal ash and, after such consideration, assessed it in the same category as coal and applied tax at four per cent. In these circumstances, reopening the assessments on the same material amounted only to a change of opinion, which did not justify reassessment.

Conclusion: The reassessment proceedings for the assessment years 1999-2000 and 2000-01 were illegal and were quashed, in favour of the assessee.

Issue (ii): Whether the reassessment proceedings for the assessment year 1998-99 were valid.

Analysis: The assessment order for 1998-99 did not show that the calorific value of burnt coal/coal ash had been considered earlier. The reopening was supported by the information relied upon by the authority, and therefore it could not be said that there was no material or merely a change of opinion for issuing notice under the reassessment provision.

Conclusion: The reassessment proceedings for the assessment year 1998-99 were valid and could continue, against the assessee.

Final Conclusion: The challenge succeeded only in part: reassessment for two assessment years was set aside, while the reopening for 1998-99 was upheld and left to proceed in accordance with law.

Ratio Decidendi: Reassessment is not permissible where the original assessment had already considered the relevant material and the subsequent reopening is founded only on a change of opinion, but reopening is valid where the earlier assessment did not consider the material basis for reassessment.

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