Reassessment for wrong allowance upheld where original assessment lacked proper application of mind and circular correctly stated the law.

A circular that merely states the correct legal position for tax adjustment does not unlawfully interfere with the quasi-judicial function of the assessing authority, and it remains valid where consistent with binding precedent. Reassessment was also upheld because Section 21 of the U.P. Trade Tax Act permits reopening where turnover has escaped assessment or a deduction has been wrongly allowed on the basis of reason to believe. An original assessment granting adjustment without meaningful application of mind was treated as a case of wrong allowance, not a barred review of a conscious decision. The reassessment permission and notice were therefore within jurisdiction.

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Issues: (i) Whether the circular issued by the Commissioner of Trade Tax interfered with the quasi-judicial function of the assessing authority and was invalid; (ii) Whether permission under Section 21(2) of the U.P. Trade Tax Act and the consequent reassessment notice were liable to be quashed on the ground of change of opinion or lack of jurisdiction.

Issue (i): Whether the circular issued by the Commissioner of Trade Tax interfered with the quasi-judicial function of the assessing authority and was invalid.

Analysis: The challenge to the circular was not part of the pleaded relief, but the Court examined it because it was pressed in argument. The circular only drew the attention of assessing authorities to the correct legal position on adjustment of tax paid on paddy against central sales tax on rice. A direction that merely states the correct exposition of law does not amount to interference with quasi-judicial decision-making, especially when the same circular had already been upheld in earlier binding precedent.

Conclusion: The circular was held to be valid and not an unlawful interference with quasi-judicial functions.

Issue (ii): Whether permission under Section 21(2) of the U.P. Trade Tax Act and the consequent reassessment notice were liable to be quashed on the ground of change of opinion or lack of jurisdiction.

Analysis: The Court held that Section 21 permits reopening where turnover has escaped assessment or a deduction has been wrongly allowed, provided there is reason to believe. The original assessment order granted adjustment under Section 15(c) of the Central Sales Tax Act without any meaningful discussion of the legal entitlement, so the case was treated as one of wrong allowance and escapement of tax rather than a barred review of a conscious decision. The proviso to Section 21(2) also permits action even where the case involves change of opinion arising from lack of care or inadvertence. The reassessment proceedings were therefore within jurisdiction.

Conclusion: The permission under Section 21(2) and the reassessment notice were upheld.

Final Conclusion: The writ petitions failed because the adjustment allowed in the original assessment was contrary to law and the reassessment machinery was validly invoked to correct that error.

Ratio Decidendi: Where an assessment allows a deduction or adjustment without proper application of mind to the governing provision, the resulting escapement may be reopened under the reassessment power, and a circular correctly stating the law does not become invalid merely because it guides assessing authorities on its application.

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