Court quashes reassessment order, emphasizes notice requirement for natural justice

The court allowed the writ petition, quashing the order permitting reassessment under section 21(2) of the U.P. Trade Tax Act, 1948 without prior notice to the petitioners for assessment years 1990-91, 1991-92, and 1992-93. The court emphasized the requirement of notice before granting permission for reassessment after the limitation period had expired, citing principles of natural justice. The court directed the Commissioner/Additional Commissioner to issue a fresh order after providing the petitioners with an opportunity, without awarding costs.

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Issues involved: Challenge to order permitting reassessment u/s 21(2) of U.P. Trade Tax Act, 1948 without prior notice to assessee.

Summary:
The petitioners challenged an order permitting reassessment for assessment years 1990-91, 1991-92, and 1992-93 u/s 21(2) of the U.P. Trade Tax Act, 1948 without prior notice. The Additional Commissioner granted permission for reassessment without issuing a show-cause notice, leading to the petitioners approaching the court. The petitioners argued that natural justice principles required notice before granting permission for reassessment after the four-year limitation period. The respondents contended that no notice was necessary as per the Act. The court examined the relevant provisions and previous decisions to determine the legality of the order.

The court noted that the assessing authority had passed assessment orders for the relevant years within the prescribed time limits. However, permission for reassessment was sought from the Commissioner under section 21(2) of the Act after the limitation period had expired. The court emphasized that the petitioners had acquired a valuable right after the four-year period, necessitating notice before granting permission for reassessment. Citing previous judgments, the court held that even if the statute did not explicitly require notice, principles of natural justice mandated it unless specifically excluded. The court distinguished the cases relied upon by the respondents, stating that the present case aligned with the decision in Manaktala Chemicals Pvt. Ltd.

Ultimately, the court allowed the writ petition, quashing the impugned order for reassessment. It directed the Commissioner/Additional Commissioner to issue a fresh order after providing an opportunity to the petitioners. No costs were awarded in the circumstances of the case.

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