Reassessment on mere change of opinion is impermissible, and prior hearing is mandatory under a binding circular.

Reassessment under Section 21 of the U.P. Trade Tax Act, 1948 cannot rest merely on a change of opinion, and reopening on that basis is impermissible. The Court also treated the departmental circular as binding on tax authorities and held that it required an effective opportunity of hearing before passing a reassessment order; failure to do so amounted to breach of natural justice. The text further notes that, despite the reassessment being found unsustainable on merits, the writ was not finally decided against the remand order because the assessment order had merged in the appellate order.

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Issues: (i) Whether reassessment proceedings under Section 21 of the U.P. Trade Tax Act, 1948 could be initiated merely on a change of opinion. (ii) Whether the assessing authority was bound to afford a hearing before passing the reassessment order in view of the departmental circular and the requirements of natural justice.

Issue (i): Whether reassessment proceedings under Section 21 of the U.P. Trade Tax Act, 1948 could be initiated merely on a change of opinion.

Analysis: Reassessment cannot be sustained where it rests only on a mere change of opinion. The material before the Court showed that the reopening did not disclose a legally sustainable basis beyond such change of opinion, and reassessment on that footing was impermissible.

Conclusion: The issue was answered in favour of the assessee.

Issue (ii): Whether the assessing authority was bound to afford a hearing before passing the reassessment order in view of the departmental circular and the requirements of natural justice.

Analysis: The departmental circular was treated as binding on the tax authorities, and the Court held that it required an opportunity of hearing before any reassessment order could be made. The order was also viewed as having been passed without affording an effective opportunity to object, resulting in violation of natural justice.

Conclusion: The issue was answered in favour of the assessee.

Final Conclusion: Although the reassessment action was found to be unsustainable on merits, the writ petition was not finally adjudicated against the Tribunal's remand order because the assessment order had merged in the appellate order, and the petitioner was left to pursue its objections before the authorities in accordance with law.

Ratio Decidendi: Reassessment based solely on a change of opinion is impermissible, and a binding departmental circular requiring prior hearing must be followed by the assessing authority before passing a reassessment order.

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