### Reassessment notice based on tangible survey material regarding deemed sale of diesel is valid.

The petitioner, a cement manufacturer, procures High Speed Diesel (HSD) at concessional rates for captive mining and manufacturing.

For operational execution, the petitioner enters into contracts with third-party agencies (e.g., M/s National Transport Company) for mining and transportation.

Following an order by the Commissioner, Commercial Tax Department, a survey was conducted on 06.09.2019.

The resulting survey report dated 18.02.2020 alleged that the petitioner provided HSD to contractors at lower service rates compared to contracts where contractors provided their own fuel.

The department viewed this "adjustment" as a taxable "sale" under the Rajasthan VAT Act.

Consequently, show cause notices were issued for the FY 2015-16 to reopen assessments under Section 25 of the RVAT Act.

The petitioner challenged the report and notices, alleging they were based on a "change of opinion" and pre-determined liability.

1. Whether the inspection/survey report and consequential show cause notices are liable to be quashed on grounds of being pre-decisional or issued without jurisdiction.

2. Whether the reassessment proceedings were initiated merely on a "change of opinion" without new incriminating material.

3. Whether the supply of diesel to contractors to facilitate execution of work constitutes a "sale" under Section 2(35) of the RVAT Act, 2003.

The court primarily applied Section 25(1) of the Rajasthan Value Added Tax (RVAT) Act, 2003, which empowers authorities to assess or reassess tax where there is "reason to believe" a dealer has avoided or evaded tax.

It considered the definition of "sale" under Section 2(35) of the RVAT Act.

The court also referenced Section 3 of the Rajasthan State Road Development Fund Act, 2004 regarding cess liability.

On procedural grounds, it followed the principles of alternative remedy and judicial restraint regarding show cause notices as established in *Radha Krishan Industries v. State of Himachal Pradesh*.

The court found that the survey report was not a "final determination" but a recommendation based on tangible material, specifically a letter dated 15.04.2013 showing differential pricing for contracts with and without diesel.

This material provided a prima facie "reason to believe" that escaped assessment occurred, justifying the invocation of Section 25(1).

The court rejected the "change of opinion" argument, noting the petitioner failed to show any prior categorical decision by the authorities on the same facts.

Regarding the allegation of pre-determination, the court held that the notices were part of a lawful inquiry and the respondents' undertaking to hear objections fairly nullified the claim of bias.

The court also distinguished the interim orders of the Single Judge, finding that the specific contractual price-differences constituted "cogent and actionable" material that warranted a full inquiry rather than summary quashing.

It held that the petition was premature as it challenged a show cause notice before the conclusion of the statutory inquiry.

The Court relegated the petitioner back to the assessing authority (Respondent No. 2) to file an explanation and participate in the inquiry.

The respondents were directed to intimate a fresh date for hearing and pass an order only after considering the petitioner's material.

The final determination of whether the transaction constitutes a "sale" was left to the assessing authority.