Reassessment and declaration forms: old forms supplied by the department protected assessees, with interest, penalty, and reopening set aside.

Amended declaration forms for inter-State sales could not be withheld from assessees where the department had continued to supply only the old forms; declarations made in the supplied forms were therefore not treated as false, and the benefit of the forms could not be denied on that basis. The related levy of interest and penalty also failed because the reassessment itself was unsustainable and the controversy arose from a debatable legal position, with the assessees acting on forms issued by the department. Reopening under Section 24 of the Delhi Sales Tax Act, 1975 was invalid because no recorded satisfaction or reasons showing escaped turnover were demonstrated, and the process amounted to an impermissible review on the same material.

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Issues: (i) Whether the assessees were disentitled to the benefit of the declaration forms for inter-State sales merely because the amended forms were not printed and issued by the department; (ii) Whether the levy of interest and penalty was sustainable; (iii) Whether the reopening of assessment under Section 24 of the Delhi Sales Tax Act, 1975 was valid.

Issue (i): Whether the assessees were disentitled to the benefit of the declaration forms for inter-State sales merely because the amended forms were not printed and issued by the department.

Analysis: The amendment to the relevant rules restricted the use of the declaration forms, but the department continued to issue the old forms and the amended forms were not printed or made available in time. The statutory scheme under the rules required issue and control of forms by the assessing authority, and the assessees could not be expected to use forms that were not supplied by the department. In these circumstances, declarations made in the unamended forms could not be treated as false, and the assessees could not be denied the benefit merely on account of the department's failure to issue the amended forms.

Conclusion: The issue was decided in favour of the assessees and against the department.

Issue (ii): Whether the levy of interest and penalty was sustainable.

Analysis: Once the reassessment itself could not be sustained on the facts and law, the consequential levy of interest and penalty also could not stand. Penalty was not automatic, particularly where the controversy arose from a debatable legal position and the assessees had acted on the forms supplied by the department. Interest was also not justified in the circumstances found by the Court.

Conclusion: The levy of interest and penalty was held unsustainable and this issue was decided in favour of the assessees.

Issue (iii): Whether the reopening of assessment under Section 24 of the Delhi Sales Tax Act, 1975 was valid.

Analysis: Reopening required a recorded formation of opinion that turnover had escaped assessment, and such satisfaction had to be reflected in the order sheet or file. No such recorded reasons or separate satisfaction were shown. The reassessment was, in substance, an attempted review of the earlier assessment on the same material, which Section 24 did not permit. The mandatory requirement of recording reasons before issuing notice had also not been satisfied.

Conclusion: The reopening of assessment was held invalid and this issue was decided in favour of the assessees.

Final Conclusion: The appeals succeeded, the Tribunal's majority view was set aside, and the assessees obtained relief on all substantial questions decided.

Ratio Decidendi: Where the department fails to print and make available the amended declaration forms required by the statutory scheme, declarations made in the unamended forms supplied by the department cannot be treated as false, and reassessment cannot be sustained absent a recorded statutory satisfaction that turnover escaped assessment.

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