Tax-paid certificates and binding circulars must be considered before reassessment; matter remanded for fresh hearing.

A reassessment was set aside because the assessee had later produced tax-paid certificates and the assessing authority had not put the assessee on notice that the transactions would remain taxable even if those certificates were furnished. The Madras HC held that the authority could not ignore the material representation, especially when a departmental circular required acceptance of declarations and reconsideration of assessments under the statutory revisional power. The counter affidavit's claim that the certificates were irrelevant was rejected because the notice did not disclose that basis. The matter was remanded for fresh hearing and consideration of the certificates in accordance with law.

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Issues: Whether the reassessment proceedings were liable to be set aside and the matter remanded for fresh consideration in view of the petitioner's tax-paid certificates and the departmental circular.

Analysis: The reassessment order proceeded on the footing that the petitioner had not produced certificates from the Coffee Board or auctioneers. The petitioner had later submitted tax-paid certificates and relied on a circular issued by the Commissioner directing acceptance of declarations and revision of assessments under Section 55 of the Tamil Nadu General Sales Tax Act, 1959. The stand taken in the counter affidavit that the certificates were irrelevant could not be accepted because the reassessment notice had not put the petitioner on notice that the transaction would remain taxable even if such certificates were produced. The departmental circular was also binding on the assessing authority. The authority had therefore failed to consider the petitioner's representation in accordance with law.

Conclusion: The impugned proceedings were set aside and the matter was remanded to the respondent for fresh hearing and consideration of the tax-paid certificates.

Ratio Decidendi: An assessing authority must consider material representations and cannot sustain an assessment on a ground not disclosed in the notice, particularly where a binding departmental circular requires reconsideration under the statutory revisional power.

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