The assessing authority has the power to initiate reassessment under Section 12a of the Karnataka Sales Tax Act, 1957, even if the entire turnover was before the authority but had been assessed at a lower rate than prescribed.

( 1 ) THESE writ petitions have been referred, at the stage of preliminary hearing, to division Bench u/s 9 of the Karnataka high Court Act, 1961. The following question of law arises for consideration : whether u/s 12a of the Karnataka sales Tax Act, 1957 (Act for short) the assessing authority has the power to make a reassessment, if after making an assessment, it finds that the assessment of tax on the turnover of anv item of goods had been made at a rate lower than the rate at which that particular turnover, was assessable to tax under the Act ?

( 2 ) THE facts, in brief, are as follow- (i) in W P. No. 1235/1986: - The assessee in this case is a dealer registered under the provisions of the Act. The period of assessment concerned is 1-4-82 to 31-3- 1983. The Assistant Commissioner of commercial Taxes (Assessment-1) Bangalore 9 was the assessing authority. Out of the gross turnover of the assessee during the relevant period the turnover relating to sales of Rayon yarn was to the tune of Rs. 3,87,29,328/ -. In the assessment order the authority levied tax at the rate of 3 per cent. The order of assessment was dated 22-8-1985. Within four months thereafter, namely, on 19-12-1985, the assessing authority issued a notice u/s 12a of the Act to the petitioner. The contents of that notice read : "notice UNDER SECTION 12a of THE K. S. T. ACT 1957 (PERIOD: 1-4 82 TO 31-3-83) please take notice that the assessment for the period from 1-4-82 to 31-3-83 in respect of your company had been concluded vide order dated 22-8 85. In the said assessment order you have been assessed under the K S. T Act, 57 on turnovers as detailed below :

Gross turnover

Rs

4,33,64,297-57

Exempted turnover

Rs

1,57,70,195-69

Taxable turnover

Rs.

2,75,94,101-88

out of the taxable turnover determined, a turnover amounting to Rs. 1,87,29,328 00 had been assessed to tax @ 3% classifying the same as sales of rayon Yarn and a tax amount of Rs. 5,61,879-85 had been levied Tax @ 3%- was levied wrongly on Rayon Yarn as falling under Entry 24 of Second Schedule to the K. S. T. Act, 1957, which envisages"all kinds of mill yarn excluding cotton yarn, spun silk yarn and filature silk". 2. With effect from 1-4-82 vide Act 13 of 1982, Entry 147 had been i ntroduced and the entry reads as under :"all kinds of man-made or synthetic staple fibres or fibres or filament yarn. . . Rate of tax. . . 6%".

( 3 ) RAYON Yarn dealt with and sold by you during the year 82-83, is a synthetic fibre answering the description of man-made or synthetic staple fibres and hence falls squarely under this Entry. It is, therefore, evident that a turnover amounting to Rs. 1,87,29,328/- relating to sales of Rayon yarn had been assessed at a rate lower than the rate at which it is assessable under the Act, in view of the fact that it should have been subjected to tax @ 6% for the reasons mentioned above.

( 4 ) BY virtue of powers vested in me u/s. 12a of the K. S. T. Act, 1957, it is now proposed to re-assess this part of the turnover amounting to Rs. 1,87,29,328/- @ 6% treating the same as an item falling under Entry 147 of the Second Schedule to the K. S. T. Act, 1957. The proposed turnovers to be reassessed are as under:- turnovers to be reassessed are as under:

Gross turnover

Rs. 4,33,64,298-57

Exempted turnover

Rs. 1,57,70,195-69

Taxable turnover

Rs. 2,75,94,101-88

CLASSIFICATION

Sale of Rayon Yard under Entry 147 of Second Schedule

Rs.

1,87,29,328/- @ 6% Rs. 11,23,759-70

Sale of Kesophane Film (Cellulose)

Rs.

88,64,773-88 @ 7% Rs. 6,20,534-15

Rs. 17,44,293-85

Total

Rs.

17,44,293-85

S. C. @ 10%

Rs.

1,74,429-38

T. O. T. % 5%

Rs.

1,37,970-50

Grant Total

Rs.

20,56,693-73

Less tax already assessed

Rs.

14,38,625-90

Balance now determined

Rs.

6,18,067-87

please show cause why the turnovers proposed as above should not be assessed u/s. 12a of the Act. . . . . . . . ". As can be seen from the above notice, the assessing authority issued the notice on his finding that the 'synthetic fibre' was i