Reopening of assessment must rest on jurisdictional facts; stock transfers require transaction-wise proof before inter-State sale treatment.

Reopening of assessment under the Central Sales Tax Act was held unsustainable because it rested on assumptions rather than legally relevant jurisdictional facts such as new material, suppression, fraud, or misrepresentation; a mere change of opinion was insufficient, so the reassessment notice failed. The alleged stock transfers also could not be treated as inter-State sales on generalized inferences alone, because each transaction had to satisfy the statutory test that movement of goods was occasioned by the contract of sale or by transfer of title during movement. On that basis, the reassessment and consequential demand were quashed.

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Issues: (i) whether the reopening of assessment under Section 27 of the Central Sales Tax Act, 1956, based on the impugned notices and order, was valid in law; (ii) whether the alleged stock transfers could be treated as inter-State sales without examining the individual transactions and without existing jurisdictional facts.

Issue (i): whether the reopening of assessment under Section 27 of the Central Sales Tax Act, 1956, based on the impugned notices and order, was valid in law.

Analysis: The framework for reopening required the existence of legally relevant grounds such as discovery of new facts, jurisdictional error, fraud, collusion, misrepresentation, suppression of material facts, or false particulars. A mere change of opinion or a relook at the assessment was insufficient. The impugned action proceeded on assumptions and conjectures rather than on material available to sustain reopening. In the absence of jurisdictional facts, the reassessment notice could not be supported.

Conclusion: The reopening was invalid and unsustainable, and the challenge succeeded in favour of the assessee.

Issue (ii): whether the alleged stock transfers could be treated as inter-State sales without examining the individual transactions and without existing jurisdictional facts.

Analysis: Inter-State sale under Section 3 of the Central Sales Tax Act, 1956 requires that the movement of goods from one State to another be occasioned by the contract of sale or be effected by transfer of documents of title during movement. The order could not rest on the fact that one vehicle was later sold inter-State or on general assumptions about high-value cars. Each transaction had to be examined on its own facts. Assessment by sampling or by drawing conclusions from one instance was impermissible. The material did not establish that all disputed transfers were inter-State sales.

Conclusion: The alleged transfers were not proved to be inter-State sales on the basis adopted by the revenue, and the finding went in favour of the assessee.

Final Conclusion: The assessment reopening and consequential demand were quashed because the revenue failed to establish valid grounds for reassessment or to prove that the disputed stock transfers constituted taxable inter-State sales.

Ratio Decidendi: Reopening under the Central Sales Tax Act cannot rest on assumptions or generalized inferences and must be founded on legally sustainable jurisdictional grounds, while liability to treat stock transfers as inter-State sales must be established transaction-wise on evidence satisfying the statutory test under Section 3.

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