Reasoned sanction required for reassessment proceedings; non-speaking approval was quashed and fresh action was allowed within reasonable time.

Sanction under section 21(2) of the U.P. Trade Tax Act, 1948 was invalid because the approving authority did not consider the assessee's reply or record reasons, making the exercise mechanical and non-speaking; the approval was therefore quashed. The Court also held that once the order is set aside in writ jurisdiction, the limitation applicable to the original proceeding does not automatically bar fresh action, though the authority must proceed within a reasonable time; the plea of limitation was rejected and fresh consideration was permitted.

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Issues: (i) Whether the sanction or approval granted under section 21(2) of the U.P. Trade Tax Act, 1948 was sustainable when the reply to the notices was not considered and no reasons were recorded; (ii) whether the limitation prescribed for initiating or completing fresh proceedings would bar action after the impugned order was set aside.

Issue (i): Whether the sanction or approval granted under section 21(2) of the U.P. Trade Tax Act, 1948 was sustainable when the reply to the notices was not considered and no reasons were recorded.

Analysis: The impugned order disclosed no consideration of the assessee's reply and proceeded mechanically in favour of revenue. The Court treated this as a non-speaking exercise of power. Relying on the settled view that approval for initiating reassessment-type proceedings must be supported by reasons and consideration of the objections raised, the order was held to be vitiated.

Conclusion: The sanction or approval was held unsustainable and was set aside in favour of the assessee.

Issue (ii): Whether the limitation prescribed for initiating or completing fresh proceedings would bar action after the impugned order was set aside.

Analysis: The Court followed the Division Bench view that once proceedings are set aside in writ jurisdiction, the statutory limitation for the earlier proceeding does not control the fresh proceeding, though the authority must act within a reasonable time. On that basis, limitation was not treated as a bar to passing a fresh order after remand.

Conclusion: The plea of limitation was rejected and fresh proceedings were permitted.

Final Conclusion: The writ petition succeeded, the impugned sanction was quashed, and the matter was remitted for fresh consideration after dealing with the assessee's reply.

Ratio Decidendi: An approval or sanction for initiating proceedings under section 21(2) of the U.P. Trade Tax Act, 1948 must be a reasoned order reflecting consideration of the assessee's objections, and once such order is set aside in writ jurisdiction, the earlier limitation does not necessarily bar a fresh decision taken within a reasonable time.

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