Prior sanction for reopening assessment must record reasons and address objections before reassessment can proceed.

Prior sanction for reopening an assessment must be preceded by recorded reasons and fair consideration of the assessee's objections. A mechanically granted approval without dealing with the objections is invalid, and the reassessment notice and all proceedings founded on that sanction cannot survive. The sanction and consequential reassessment steps are therefore liable to be quashed, with the matter to be reconsidered afresh in accordance with law.

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Issues: (i) whether permission granted under Section 21(2) of the U.P. Trade Tax Act for reopening assessment was valid when no reasons were recorded and the objections filed by the assessee were not dealt with; and (ii) whether the consequential reassessment notices and orders could survive.

Issue (i): whether permission granted under Section 21(2) of the U.P. Trade Tax Act for reopening assessment was valid when no reasons were recorded and the objections filed by the assessee were not dealt with.

Analysis: The assessee had submitted objections in response to the show-cause notice seeking sanction for reassessment. The sanctioning authority did not record any reasons and did not consider the objections. The governing principle applied was that, before granting permission for reassessment under the proviso to Section 21(2), the authority must afford an opportunity of hearing and must record reasons. A mechanically passed sanction order cannot be sustained.

Conclusion: The sanction order under Section 21(2) was invalid and liable to be set aside.

Issue (ii): whether the consequential reassessment notices and orders could survive.

Analysis: Once the foundational sanction for reopening was held unsustainable, all proceedings initiated in pursuance of that sanction necessarily fell with it. The reassessment notices and the later reassessment orders were only consequential actions based on the defective permission.

Conclusion: The consequential notices and reassessment orders were quashed.

Final Conclusion: The reassessment machinery could not be sustained because the prerequisite sanction was granted without reasons and without due consideration of the assessee's objections, and the matter was left to be reconsidered afresh in accordance with law.

Ratio Decidendi: When the statute requires prior sanction for reopening assessment, the sanctioning authority must record reasons and fairly consider the assessee's objections before granting approval; otherwise, the sanction and all consequential reassessment proceedings are liable to be set aside.

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