Reassessment notice under sales tax law upheld where relevant material supported a reasonable belief of escaped turnover.

A reassessment notice under section 21 of the U.P. Sales Tax Act is not invalid merely because the Sales Tax Officer did not record reasons or disclose the material before issuance, where the statute imposes no such express requirement. The notice remains sustainable if the assessee is effectively informed of the case to be met during proceedings. Relevant material showing sales to two dealers in amounts higher than those disclosed supplied a reasonable basis to believe that part of the turnover had escaped assessment. Prior limited remand proceedings did not keep the entire assessment open. The challenge to the notice therefore failed.

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Issues: (i) whether a notice issued under section 21 of the U.P. Sales Tax Act was invalid because the Sales Tax Officer did not record reasons or disclose the material before issuing it; (ii) whether there was relevant material before the Sales Tax Officer to form a reasonable belief that part of the turnover had escaped assessment.

Issue (i): Whether a notice issued under section 21 of the U.P. Sales Tax Act was invalid because the Sales Tax Officer did not record reasons or disclose the material before issuing it.

Analysis: The statutory scheme did not require the Sales Tax Officer to record reasons before initiating proceedings under section 21. Unlike the Income-tax Act provisions referred to by the Court, the U.P. Sales Tax Act contained no such express requirement. In the absence of a statutory mandate, non-recording of reasons could not by itself invalidate the notice. The notice also did not have to set out the material or specify the escaped items in the notice itself, so long as the assessee was effectively informed of the case to be met during the proceedings.

Conclusion: The notice was not invalid on the ground that reasons were not recorded or disclosed.

Issue (ii): Whether there was relevant material before the Sales Tax Officer to form a reasonable belief that part of the turnover had escaped assessment.

Analysis: The material placed in the counter-affidavit showed information received from other Sales Tax Officers indicating sales by the assessee to two dealers in amounts higher than those disclosed in assessment proceedings. That material was relevant and capable of inducing a reasonable belief that part of the turnover had escaped assessment. The Court also rejected the contention based on prior receipt of information, noting that the earlier assessment order was made only pursuant to a remand limited to specific exemptions and did not leave the whole assessment open.

Conclusion: Relevant material existed and the notice under section 21 was justified.

Final Conclusion: The challenge to the reassessment notice failed, and the petition was dismissed with costs.

Ratio Decidendi: A reassessment notice is valid if the authority has relevant material giving rise to a reasonable belief of escaped turnover, and the notice is not vitiated merely because reasons are not recorded or set out when the statute does not require such disclosure.

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