Court overturns tax reassessment without hearing, emphasizes natural justice principles.

The court set aside the permission for reassessment granted by the Commissioner of Trade Tax for the assessment years 1993-94, 1994-95, and 1995-96 under U.P. and Central laws. The court emphasized the necessity of providing an opportunity of hearing to the petitioner before passing such orders, in line with the precedent set in a previous case. The matter was directed to be reheard by the Commissioner, U.P. Trade Tax, with the petitioner being given a chance to present their case, highlighting the importance of adhering to principles of natural justice.

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Issues: Challenge to permission for reassessment for assessment years 1993-94, 1994-95, and 1995-96 under U.P. and Central laws.

The writ petition challenged the legality and validity of the permission granted by the Commissioner of Trade Tax to initiate reassessment proceedings for the assessment years 1993-94, 1994-95, and 1995-96 under U.P. and Central laws. The petitioner, a public limited company engaged in the manufacture and sale of electron guns, contended that no opportunity of hearing was provided before the impugned order was passed, violating the principles of natural justice. The petitioner argued that based on the precedent set by the court in S. K. Traders, Modi Nagar, Ghaziabad v. Additional Commissioner, Grade 1, Trade Tax Zone, Ghaziabad, the authority should have granted an opportunity of hearing. The respondent, however, argued that Section 21(2) does not mandate providing a hearing before granting permission for reassessment. The court considered the arguments and examined the relevant sections of the law.

The court noted specific averments in the writ petition that no notice was received, and no hearing was granted before passing the impugned order. The respondent's counter-affidavit stated that Section 21(2) does not require a hearing before granting permission for reassessment and that the Commissioner of Trade Tax does not impose any tax through such orders. Referring to the precedent in S. K. Traders, Modi Nagar, Ghaziabad v. Additional Commissioner, Grade 1, the court emphasized the necessity of providing an opportunity of hearing to the assessee and recording reasons while granting permission for reassessment. The court found that the respondent failed to distinguish the precedent's ruling.

Based on the precedent and considering the lack of opportunity provided before passing the impugned order, the court set aside the order dated March 13, 2000, and directed the matter to be reheard by the Commissioner, U.P. Trade Tax, with an opportunity for the petitioner to present their case. The court allowed the writ petition, emphasizing the importance of adhering to principles of natural justice. No costs were awarded in the judgment.

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