Reassessment barred by limitation and invalid where reopening rests on the same material and mere change of opinion.

Reassessment was held invalid because the reopening notice was issued after the statutory limitation period for departmental audit had expired. The court also found that the assessing authority had gone beyond the limited scope of remand by reopening issues not covered by it, without any fresh material emerging after the original assessment. As the reassessment was based on the same facts already considered, it amounted to a mere change of opinion, which cannot justify reassessment. The proceedings were therefore quashed as an abuse of statutory jurisdiction.

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Issues: (i) Whether the reassessment proceedings were barred by limitation under the statutory scheme governing departmental audit and reopening; (ii) Whether the Assessing Authority acted illegally by travelling beyond the scope of remand and by reopening the assessment on the same material amounting to a mere change of opinion.

Issue (i): Whether the reassessment proceedings were barred by limitation under the statutory scheme governing departmental audit and reopening.

Analysis: The statutory scheme required any departmental audit to be completed within thirty-six months from the due date, and the due date, on the facts of the case, was 31 December 2007 for the relevant assessment year 2006-07. On that basis, the permissible period for departmental audit expired on 31 December 2010. The notice for reopening was issued only on 20 December 2011, well after the limitation had run out.

Conclusion: The initiation of reassessment was barred by limitation and is invalid.

Issue (ii): Whether the Assessing Authority acted illegally by travelling beyond the scope of remand and by reopening the assessment on the same material amounting to a mere change of opinion.

Analysis: The remand order was confined to the limited question of tax-free sales, yet the Assessing Authority proceeded to reopen and decide additional issues as well. The impugned order also did not identify any new material that had surfaced after the original assessment. In these circumstances, the reopening rested on the same set of facts and amounted to a second opinion rather than a valid reassessment. The governing principle is that reassessment cannot be founded on a mere change of opinion on the same material.

Conclusion: The reassessment order was illegal because it exceeded the remand and was based on a mere change of opinion.

Final Conclusion: The reassessment proceedings were quashed as a gross abuse of statutory jurisdiction, and the writ petition was allowed.

Ratio Decidendi: Reassessment cannot be sustained where the statutory period for reopening has expired, or where the authority reopens the matter on the same material without fresh grounds, since a mere change of opinion is not a valid basis for invoking reassessment powers.

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