Escapement of turnover is essential for reassessment; refund once determined cannot be withheld on unrelated grounds.

Reassessment under the works contract tax framework was held to require a statutory basis of escaped, under-assessed, or lower-rated turnover; reopening based only on an alleged failure to deduct tax at source was treated as jurisdictionally invalid because that defect did not amount to escapement in the assessee's hands. The penalty imposed within the reassessment order was also infirm because it bypassed the separate penalty procedure and hearing. On refund, once the amount had been determined in assessment and the prescribed certificates were on record, withholding the refund on the ground of further verification was unjustified, and mandamus issued for release of the refund with interest.

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Issues: (i) Whether the reassessment notices and orders were without jurisdiction for want of escapement of turnover under the works contract tax law; (ii) Whether the petitioner was entitled to immediate refund of the tax deducted at source and a writ of mandamus directing release of the refund.

Issue (i): Whether the reassessment notices and orders were without jurisdiction for want of escapement of turnover under the works contract tax law.

Analysis: Reassessment under the incorporated sales tax provision could be initiated only where the authority had reason to believe that turnover had escaped assessment, been under-assessed, or been assessed at a lower rate. The stated ground for reopening was only that the petitioner had not deducted tax at source from payments made to the member-companies. The petitioner merely passed on the monies received from the contractee to its constituents and did not itself have taxable sale turnover in respect of those payments. Failure, if any, to deduct tax at source was not the same as escapement of turnover in the petitioner's hands. The penalty, moreover, was imposed within the reassessment order itself without following the separate procedure and hearing contemplated for penalty action.

Conclusion: The reassessment notices and orders were without jurisdiction and were quashed in favour of the petitioner.

Issue (ii): Whether the petitioner was entitled to immediate refund of the tax deducted at source and a writ of mandamus directing release of the refund.

Analysis: The refund had already been determined in the assessment proceedings, the relevant certificates and declarations were on record, and there was no finding of defect in the certificates or non-compliance by the petitioner. The respondents had kept the matter pending for years on the pretext of verification from the contractee, while simultaneously initiating reassessment proceedings to raise demands. In the absence of any legal impediment to refund and with the refund quantified, withholding the amount was unjustified.

Conclusion: The petitioner was entitled to the refund, and a writ of mandamus was issued directing refund with applicable interest.

Final Conclusion: The writ petitions succeeded, the reopening and reassessment actions were struck down, and the respondents were directed to release the determined refunds with interest.

Ratio Decidendi: Reassessment cannot be sustained unless the statutory precondition of escapement of turnover is met, and refund once duly determined cannot be withheld on an unrelated ground or by resort to jurisdictionally defective reopening proceedings.

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