Reopening assessment not justified where seller relied on purchaser declarations and eligibility certificates already used in completed assessment.

A notice reopening assessment under section 21 of the U.P. Trade Tax Act was held unsustainable where the selling dealer had already disclosed turnover and completed assessment on the basis of forms furnished by purchasing dealers. The court noted that the seller's duty was limited to verifying the declaration and the goods covered by the eligibility certificate; it was not required to examine whether the certificate had been correctly issued or whether the purchaser was entitled to full exemption or only a concessional rate. Any defect in the eligibility certificate, or misuse by the purchaser, had to be pursued against the certificate-holder or issuing authority, not by reopening the seller's concluded assessment. A mere change of view on the same facts did not justify reassessment, and the notice was quashed.

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Issues: Whether a notice issued for reopening assessment under section 21 of the U.P. Trade Tax Act could be sustained on the ground that the purchasing dealers were wrongly granted full exemption under section 4-B and had furnished form 3-Kha to the selling dealer.

Analysis: The turnover was already disclosed and assessed on the basis of the forms furnished by the purchasing dealers. The selling dealer's obligation was confined to verifying the declaration and the goods covered by the eligibility certificate; it was not required to examine whether the certificate had been correctly issued or whether the purchaser was entitled to total exemption or only a concessional rate. Any error in granting the eligibility certificate, or any misuse of it by the purchaser, could be proceeded against by lawful action against the certificate-holder or the issuing authority, but that did not justify reopening the seller's completed assessment under section 21. A mere later change of view on the same facts also could not support reopening.

Conclusion: The notice for reopening assessment was not sustainable and was liable to be quashed in favour of the assessee.

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