Change of opinion bars reassessment where the issue was already examined in the original assessment.

Section 3AB of the U.P. Trade Tax Act did not apply where the price of country liquor and the price of bottles or poly pouches were separately charged, because the exemption was confined to composite pricing of goods and packing material. Reassessment under section 21 required a rational basis for escaped assessment and could not rest on a mere change of opinion. On the earlier assessment years, the reopening was invalid because the issue had already been examined in the original assessments; for the later years, where no prior opinion had been formed, the notices were sustained.

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Issues: (i) Whether, on the facts of the case, section 3AB of the U.P. Trade Tax Act, 1948 applies where the price of country liquor and the price of bottles or poly pouches are separately charged; (ii) Whether the notices issued under section 21 of the U.P. Trade Tax Act, 1948 for the assessment years 1997-98 to 2000-01 were sustainable, including on the question of change of opinion.

Issue (i): Whether, on the facts of the case, section 3AB of the U.P. Trade Tax Act, 1948 applies where the price of country liquor and the price of bottles or poly pouches are separately charged.

Analysis: The earlier Division Bench view accepted by the Court was that section 3AB applies only where the goods and packing material are sold for a composite price. Where the prices of country liquor and packing material are separately charged, the packing material does not get the benefit of exemption under section 3AB. The Court treated that view as correctly reflecting the statutory scheme and accepted the circular issued on that basis.

Conclusion: Section 3AB does not apply where the price of the liquor and the packing material is separately charged.

Issue (ii): Whether the notices issued under section 21 of the U.P. Trade Tax Act, 1948 for the assessment years 1997-98 to 2000-01 were sustainable, including on the question of change of opinion.

Analysis: Reassessment under section 21 requires reason to believe based on relevant material having a rational nexus with escaped assessment. The Court held that for the assessment years 1997-98 and 1998-99 the issue had already been examined in the original assessments and the reopening was only a change of opinion, which is impermissible. For the assessment years 1999-2000 and 2000-01, however, the issue had not been considered earlier and there was no prior opinion, so reopening could not be struck down on that ground. The Court therefore upheld the validity of the notices for those later years.

Conclusion: The notices for 1997-98 and 1998-99 were invalid, while the notices for 1999-2000 and 2000-01 were valid.

Final Conclusion: The writ petition succeeded only in part: reassessment proceedings were quashed for the earlier assessment years where the matter had already been decided, but the reassessment notices for the later years were sustained.

Ratio Decidendi: Reassessment cannot be initiated on a mere change of opinion where the very issue was examined and decided in the original assessment, but reopening is permissible where no prior opinion on that issue was formed and the statutory condition of reason to believe is otherwise satisfied.

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