1984 (1) TMI 282 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Interpretation of "information" u/s 18(1) of the Bihar Sales Tax Act, 1959.
2. Validity of reassessment based on information from the original record.
3. Correctness of the Division Bench's view in Satya Narainji Mills v. State of Bihar.

Summary:

1. Interpretation of "information" u/s 18(1) of the Bihar Sales Tax Act, 1959:

The core issue was whether the "information which has come into his possession" as per section 18(1) of the Bihar Sales Tax Act, 1959, for reassessment purposes must necessarily originate from an external source outside the original record. The court concluded that the term "information" is not confined to external sources and can stem from the existing record itself. The statute does not limit the source of such knowledge, and to restrict it to external sources would be an unwarranted insertion of words into the statute.

2. Validity of reassessment based on information from the original record:

The court emphasized that the information must come into the possession of the prescribed authority after the original assessment. Information that was already known to the authority at the time of the original assessment cannot be grounds for reopening the assessment. The court also clarified that a mere change of opinion or second thoughts by the prescribed authority on the same set of facts and materials already available on the record does not constitute "information" for the purposes of reassessment.

3. Correctness of the Division Bench's view in Satya Narainji Mills v. State of Bihar:

The Division Bench's view in Satya Narainji Mills' case, which held that "information" must necessarily come from an external source, was overruled. The court found that the Division Bench had not adequately considered relevant precedents and had primarily relied on an isolated observation in A. Raman and Co.'s case, ignoring subsequent detailed observations and binding precedents.

Conclusion:

(i) "Information" u/s 18(1) of the Act for reassessment need not necessarily spring from a source external to the original record.

(ii) A mere change of opinion or having second thoughts by the prescribed authority on the same set of facts and materials on the record does not constitute "information" under section 18(1) of the Act for reassessment purposes.

(iii) Satya Narainji Mills v. State of Bihar does not lay down the law correctly and is hereby overruled.

The cases will now go back to the Division Bench for a decision on merits in accordance with the settled legal issues.

SARWAR ALI, J.-I agree.

JHA, J.-I agree.