Reasoned sanction for reassessment must consider objections before notice can survive under trade tax law.

Sanction to reopen assessment under section 21(2) of the U.P. Trade Tax Act was held invalid where the authority granted permission mechanically, without considering the assessee's objections and without recording reasons. The court followed the principle that the assessee must be heard at the sanction stage and that the decision must reflect application of mind. Because the sanction order was non-speaking and arbitrary, the consequential reassessment notice could not survive and was set aside. Fresh consideration after hearing the assessee was directed.

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Issues: Whether the sanction granted for reopening assessment under section 21(2) of the U.P. Trade Tax Act, 1948, without dealing with the assessee's objections and without recording reasons, was valid and whether the consequential reassessment notice could survive.

Analysis: The assessee had filed a detailed reply to the show-cause notice seeking sanction for reopening, but the Additional Commissioner granted permission without giving reasons or considering the objections. The decision followed the earlier binding view that, while considering a proposal for sanction to reopen assessment, the assessee must be heard and reasons must be recorded. An order passed mechanically and without application of mind cannot sustain the exercise of power under the proviso to section 21(2), and any notice issued in pursuance of such invalid sanction falls with it.

Conclusion: The sanction order and the consequential reassessment notice were invalid and were set aside, and fresh consideration after hearing the assessee was directed.

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