Independent satisfaction in reassessment was required; audit objections alone could not justify reopening without a hearing.

Reassessment under section 12(8) of the Odisha Sales Tax Act was invalid where the assessing authority acted mainly on an audit report and did not form an independent satisfaction that turnover had escaped assessment. The authority was required to apply its own mind to relevant material, consider the dealer's explanation, and give a reasonable opportunity of hearing before reopening assessment. Because the order was based mechanically on audit objections and did not disclose independent inquiry, it was contrary to the statutory scheme and natural justice. The Tribunal's order was upheld, with liberty for fresh reassessment in accordance with law.

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Issues: Whether reassessment under section 12(8) of the Odisha Sales Tax Act, 1947 was valid when the assessing authority acted on audit material without forming an independent opinion and without giving the dealer a reasonable opportunity of being heard.

Analysis: The reassessment order was found to be based substantially on the audit report and the stock position reflected in the report of another department, without showing an independent inquiry or consideration of the dealer's explanation. The statutory scheme under section 12(8), read with section 12(5), requires the assessing authority to satisfy itself that turnover has escaped assessment and to proceed only after giving a reasonable opportunity of hearing. The Court held that the authority cannot mechanically accept audit objections or act on mere suspicion. An escaped-assessment order must disclose application of mind and the material on which the satisfaction is formed, failing which the order is contrary to law and natural justice.

Conclusion: The reassessment was invalid for want of independent satisfaction and reasonable opportunity of hearing; the Tribunal's order was upheld, though the assessing authority was directed to conduct a fresh reassessment in accordance with law.

Ratio Decidendi: An escaped-assessment proceeding cannot rest on an audit objection alone; the assessing authority must form an independent objective opinion on relevant material and must comply with the statutory requirement of hearing before reassessment.

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