Inter-State sales tax and reassessment limits: section 15(c) applies only to State levy relief, and change of opinion cannot justify reopening.

Section 15(c) of the Central Sales Tax Act, 1956 was construed to reduce only the State levy on rice procured from paddy on which State tax had been paid; it did not extend to reduce Central sales tax on inter-State sales of rice. Reassessment under section 21 of the U.P. Trade Tax Act, 1948 required fresh, relevant material forming a bona fide reason to believe that assessment had escaped tax; a mere change of opinion on the same facts, prompted by a circular, was insufficient. On that basis, the reassessment action was quashed while the section 15(c) interpretation was upheld.

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Issues: (i) Whether section 15(c) of the Central Sales Tax Act, 1956 permits reduction of tax payable on inter-State sales of rice by the tax paid on paddy under the State law; (ii) Whether reassessment proceedings under section 21 of the U.P. Trade Tax Act, 1948 were valid when initiated without fresh material and only on a change of opinion.

Issue (i): Whether section 15(c) of the Central Sales Tax Act, 1956 permits reduction of tax payable on inter-State sales of rice by the tax paid on paddy under the State law.

Analysis: Section 15 of the Central Sales Tax Act, 1956 was held to be a provision controlling State taxation of declared goods within a State. Clause (c) was interpreted literally to mean that where tax has been levied on paddy under the State law, the tax leviable on rice procured out of such paddy is reduced by that amount only in relation to the State levy on rice. The language of clause (c) did not extend the reduction to tax levied under the Central Sales Tax Act on inter-State sales. The decision distinguished authorities that relied on special State-law explanations or on section 8(2A) of the Central Sales Tax Act, 1956, and held that those cases did not govern the present controversy.

Conclusion: Section 15(c) does not permit reduction of Central sales tax on inter-State sales of rice by the tax paid on paddy under the State law.

Issue (ii): Whether reassessment proceedings under section 21 of the U.P. Trade Tax Act, 1948 were valid when initiated without fresh material and only on a change of opinion.

Analysis: The reassessment power under section 21 was treated as dependent on a bona fide reason to believe based on relevant material having a rational nexus with escaped assessment. The notices did not disclose any fresh or independent material, and the record showed that the proceedings were triggered by the Commissioner's circular and by a different view taken on the same facts already examined in the original assessments. A mere change of opinion was held insufficient to confer jurisdiction for reassessment.

Conclusion: The reassessment proceedings were invalid and could not be sustained.

Final Conclusion: The writ petitions succeeded only to the extent that the reassessment action was quashed, while the interpretation of section 15(c) adopted by the Commissioner was upheld against the petitioners.

Ratio Decidendi: A reassessment notice cannot be sustained in the absence of fresh, relevant material showing escaped assessment, and section 15(c) of the Central Sales Tax Act, 1956 reduces only the State levy on rice procured from paddy, not the tax on inter-State sales under the Central Act.

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