Reasoned sanction and prior approval are mandatory before reassessment; premature notice lacks jurisdiction under the U.P. Trade Tax Act.

Approval under the proviso to section 21(2) of the U.P. Trade Tax Act, 1948 must be a reasoned order showing application of mind to the dealer's reply; a mechanical sanction is invalid. A notice issued under section 21 before obtaining the required prior approval is without jurisdiction and cannot be sustained. The note also states that, where reassessment proceedings are set aside in writ jurisdiction, fresh action is not automatically barred by the original limitation period and may be taken within a reasonable time on the facts. The impugned approval and notice were quashed and the matter remitted for fresh consideration after hearing the dealer.

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Issues: (i) Whether approval granted under the proviso to section 21(2) of the U.P. Trade Tax Act, 1948 was valid when it was passed without application of mind to the dealer's reply; (ii) whether the notice issued under section 21 of the U.P. Trade Tax Act, 1948 prior to the grant of approval was sustainable; (iii) whether the limitation prescribed for sanction and reassessment barred fresh proceedings after the earlier order was set aside.

Issue (i): Whether approval granted under the proviso to section 21(2) of the U.P. Trade Tax Act, 1948 was valid when it was passed without application of mind to the dealer's reply.

Analysis: The approval order was examined and found to be mechanical. It did not deal with the reply filed by the petitioner and contained no reason showing consideration of the objections raised before granting sanction. A sanction for initiating proceedings under section 21(2) must be supported by reasons and must reflect due application of mind.

Conclusion: The approval order was invalid and liable to be set aside.

Issue (ii): Whether the notice issued under section 21 of the U.P. Trade Tax Act, 1948 prior to the grant of approval was sustainable.

Analysis: The notice was issued before the approval was granted. Since prior approval was a condition precedent for initiation of proceedings, issuance of notice without such approval was beyond jurisdiction and could not be sustained.

Conclusion: The notice was illegal and liable to be set aside.

Issue (iii): Whether the limitation prescribed for sanction and reassessment barred fresh proceedings after the earlier order was set aside.

Analysis: The governing principle followed was that where proceedings are set aside in writ jurisdiction, the limitation for passing a fresh sanction or reassessment order does not rigidly apply. Fresh action may be taken within a reasonable period depending on the facts of the case.

Conclusion: Limitation was not a bar to passing fresh orders in the matter.

Final Conclusion: The writ petition succeeded. The impugned approval and notice were annulled, and the matter was sent back for fresh consideration after hearing the petitioner, with direction for expeditious disposal.

Ratio Decidendi: A sanction authorizing reassessment proceedings must be a reasoned order reflecting application of mind to the objections raised, and a notice issued before such sanction is obtained is without jurisdiction; where such proceedings are quashed, fresh action may be taken within a reasonable time notwithstanding the original limitation period.

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