Reassessment notice upheld where discrepancy in purchase records supported a reasonable belief of escaped turnover, not mere change of opinion.

Section 21 of the U.P. Sales Tax Act permits reassessment only where the assessing authority has reason to believe, on relevant material, that turnover has escaped assessment or been under-assessed. That belief cannot rest on mere change of opinion, but it need not be founded solely on material outside the original record. Here, the Court found a substantial discrepancy between purchases shown in the trading account and purchase lists, supported by additional information received after the original assessment. Because the record did not show earlier consideration of that specific discrepancy, the reopening was not a second thought. The notice was therefore within jurisdiction, and judicial review under article 226 did not extend to testing the sufficiency of the material once some basis for belief existed.

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Issues: Whether the reassessment notice issued under section 21 of the U.P. Sales Tax Act, 1948 was jurisdiction, and whether the material before the assessing authority disclosed a reasonable belief that turnover had escaped assessment or whether the action was merely a change of opinion.

Analysis: Section 21 authorises reopening only when the assessing authority has reason to believe that turnover has escaped assessment, been under-assessed, or has otherwise attracted reassessment. The belief cannot be purely subjective and must rest on relevant material having a rational connection with the alleged escapement. Applying that standard, the Court found material indicating a substantial discrepancy between the purchases shown in the trading account and those in the purchase lists, as well as additional information received after the original assessment from another dealer showing further discrepancy. The Court held that escapement under section 21 need not originate only from material wholly outside the original record, but a mere second thought or change of opinion on the same facts would not suffice. On the record, however, there was nothing to show that the assessing authority had earlier considered the specific discrepancy in purchases, and the case was therefore not one of change of opinion. The Court also held that, in proceedings under article 226 of the Constitution of India, it would not examine sufficiency of evidence where some material existed for the formation of reasonable belief.

Conclusion: The notice under section 21 was held to be within jurisdiction and not vitiated by change of opinion; the challenge failed.

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