Escaped assessment and retrospective works contract interpretation upheld for reassessment under trade tax law.

Reassessment under the U.P. Trade Tax Act was upheld because there was material to believe that part of the turnover had escaped assessment after the earlier order excluded the price of generator sets from taxable turnover, even though the supply element was the substantial part of the transaction and the commissioning element was minor. The Court held that the statutory power to reopen assessment is not barred by a prior different view, so a plea of change of opinion did not defeat the notice. It also held that the later Supreme Court interpretation on works contracts applied retrospectively and could be relied on for reassessment. The reassessment notice and proceedings were therefore valid.

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Issues: Whether reassessment proceedings under the U.P. Trade Tax Act, 1948 were valid on the ground of escaped assessment and whether the assessee could resist them on the plea of change of opinion and inapplicability of the later Supreme Court ruling on works contract.

Analysis: The assessment order had excluded the price of generator sets from the taxable turnover even though the materials showed that the supply value formed the substantial part of the transaction and the commissioning component was comparatively minor. On that basis, the Court found that there was material to form a belief that part of the turnover had escaped assessment. The statutory scheme of Section 21 permits reassessment where turnover has escaped assessment, and that power is not defeated merely because the earlier assessment reflected a different view. The Court also held that the legal interpretation given by the Supreme Court on the nature of such transactions applied retrospectively, and therefore the subsequent exposition of law could be relied upon for reassessment.

Conclusion: The reassessment notice and proceedings were held valid, and the writ petitions were rejected.

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