The main legal point established in the judgment is that reassessment orders must demonstrate an independent application of mind by the prescribed authority, and a mere reference to an exemption notification does not suffice to justify the initiation of a reassessment proceeding.

Aftab Alam, J.

1. The two appeals are directed against a common judgment passed by a learned single Judge of this Court dismissing two writ petitions filed by the appellant and upholding the reassessment orders passed by the Deputy Commissioner of Commercial Taxes in exercise of powers u/s. 19(1) of the Bihar Finance Act, 1981 ("the Act", hereinafter).

2. L. P. A. No. 1100 of 1996 arising out of C. W. J. C. No. 847 of 1986 relates to assessment period 1982-83. L. P. A. No. 1101 of 1996 arising out of C. W. J. C. No. 846 of 1986 relates to assessment period 1983-84. Apart from the difference in the periods of assessment, the two cases are identical on all issues of facts and law. These appeals were accordingly heard together and are being disposed of by this order.

3. The relevant facts are brief and simple and can be stated thus : The appellant is the manufacturer and seller of implements which are used in agricultural operations for spraying insecticides and pesticides, etc. The sprayers manufactured and sold by the appellant are of various types, e.g. foot sprayers, knap-sack sprayers and hand-compressor sprayers, rocking sprayers, etc. According to the appellant during the two assessment periods those implements were sold only or at least mostly to the Government Departments and the Government too taking them as agricultural implements did not pay any sales tax on their purchase. The appellant submitted its returns for the two assessment periods showing its sales tax liability as nil. The competent authority issued notice u/s. 17(2)(a) of the Act and proceeded to pass the assessment orders. The assessment orders for the two assessment periods were finally passed in which the competent authority accepted the appellants position and held that the appellant was not liable to pay any sales tax for the two assessment periods.

4. It appears that later on there was an audit objection in which it was pointed out that the implements (sprayers) manufactured and sold by the appellant were not entitled to exemption from payment of sales tax for the reason that those were not agricultural implements since sprayers were not included in the list of agricultural implements in the notification, dated December 26, 1977 issued by the State Government.

5. On the basis of the auditors objection the competent authority (the Deputy Commissioner, Sales Tax) initiated a reassessment proceeding u/s. 19(1) of the Act and issued notices to the appellant. In response to the notice the appellant submitted its show cause questioning the initiation of the reassessment proceeding and also taking the plea that the sprayers manufactured by it were agricultural implements entitled to exemption from sales tax, notwithstanding the fact that those were not separately included in the notification. It appears that after filing the objections the appellant did not appear before the Deputy Commissioner on the date fixed in the proceeding and in that circumstance the Deputy Commissioner passed ex parte orders levying taxes on the sale of sprayers by the appellant at eight per cent. The two reassessment orders for the periods 1982-83 and 1983-84 were challenged by the appellant before this Court in C. W. J. C. Nos. 847 and 846 of 1986 respectively.

6. Before the writ court the appellant assailed the reassessment orders on two grounds : one that the reassessment proceeding was wholly without jurisdiction inasmuch as the audit objection did not satisfy the statutory requirement of the prescribed authority coming into possession of an information and the other that the sprayers manufactured and sold by it were in any case entitled to exemption being agricultural implements even though those were not separately included in the list under the notification.

7. In support of the first ground the appellant relied upon, amongst others, a Supreme Court decision in Indian and Eastern Newspaper Society V/s. Commissioner of Income-tax, New Delhi -, and a Full Bench decisio