Reassessment limitation under sales tax law upheld as a rational safeguard linked to notice and reason-to-believe requirements.

A proviso extending the time for completing reassessment under the U.P. Sales Tax Act was treated as a rational incident of the reassessment scheme, because the authority must first have reason to believe turnover has escaped assessment and must serve notice before proceeding. The classification was not arbitrary, since the extra time compensated for the procedural steps needed to form the requisite belief and issue notice. On that basis, the limitation structure was held to maintain equality rather than create hostile discrimination, and the proviso was upheld as consistent with article 14.

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Issues: Whether the first proviso to sub-section (2) of section 21 of the U.P. Sales Tax Act, which permits assessment within one year from service of notice even after expiry of four years, is violative of article 14 of the Constitution of India.

Analysis: Section 7(3) and section 21 operate in the context of dealers who have not filed returns, but section 21 contains additional safeguards: the assessing authority must have reason to believe that turnover has escaped assessment, and a notice must be served before reassessment. The proviso extends the time for completing reassessment because time is necessarily consumed in gathering material to form the requisite belief and in serving notice. The classification is not arbitrary, since the proviso compensates for those procedural requirements and removes the inequality that would otherwise operate against the revenue. The limitation structure is thus treated as a justified adjustment to the assessment scheme rather than as hostile discrimination. The decision relied on the distinction between these provisions and earlier authorities concerning different statutory schemes.

Conclusion: The first proviso to sub-section (2) of section 21 is not violative of article 14 and is valid.

Ratio Decidendi: A statutory proviso extending the limitation period for reassessment does not offend article 14 when it is a rational incident of additional preconditions such as reason to believe and prior notice, and therefore operates to maintain equality rather than create discrimination.

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