In Brief
Larsen & Toubro Ltd., a construction company, had goods consumed during works contracts on which exemption was claimed in its 1991-92 assessment. An audit team later found that Rs 3.12 crore in goods had been exempted without supporting Form IX-C declarations. The tax authority reopened the assessment under Section 19 of the Bihar Finance Act, 1981, and demanded additional tax. The Supreme Court held that the audit objection, while capable of being 'information', must satisfy the Assessing Authority that turnover has escaped assessment. Here, the Assessing Officer was not satisfied and merely acted on the audit party's direction—lacking the required independent jurisdictional foundation. The Court allowed the appeal and set aside the reassessment order.
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