Reasonable opportunity for exemption claims required before reassessment can disallow pre-export sales exemption and impose penalty.

A reassessment disallowing exemption on pre-export sales cannot be finalised without giving the assessee a reasonable opportunity to produce supporting documents needed to verify entitlement. Although Form-H and connected records had been filed earlier, the assessing authority was entitled to call for them again for verification, and the absence of a written response to the reassessment notice did not justify proceeding without further chance to substantiate the claim. The reassessment order was set aside and the matter remanded for fresh reassessment after granting an opportunity to place the required documents on record.

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Issues: Whether the reassessment disallowing exemption on pre-export sales and proposing penalty could be sustained without giving the assessee a further opportunity to produce supporting documents.

Analysis: The original assessment record showed that Form-H and connected documents had been filed, but exemption could be allowed only on proof of entitlement by verification of all relevant materials. Even if the documents had been earlier produced, the assessing authority was entitled to call for them again to verify the claim. Since the assessee had not filed a written response to the reassessment notice, fairness required that an opportunity be granted to place the necessary supporting documents on record before finalising the reassessment.

Conclusion: The reassessment order was set aside and the matter was remanded to the assessing authority to redo the reassessment after giving the assessee a reasonable opportunity to substantiate the exemption claim.

Ratio Decidendi: A reassessment disallowing tax exemption cannot be sustained where the assessee is not afforded a reasonable opportunity to produce supporting documents necessary to verify the exemption claim.

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