Reassessment reopening requires recorded reasons and fresh material; a mechanical sanction cannot revisit issues already examined.

Reopening of assessment under Section 21(2) of the U.P. Trade Tax Act was held unsustainable where the original assessment had already examined the trade discounts, credit notes and refund entitlement. The sanction order did not record independent reasons, did not engage with the dealer's reply, and was unsupported by fresh material or any tangible basis. On that footing, the reopening was treated as mechanical and based on non-application of mind, and the consequential reassessment could not be sustained. The decision emphasises that reassessment cannot be used to revisit matters consciously considered in the original assessment on a mere change of opinion.

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Issues: Whether the sanction and reassessment proceedings under Section 21(2) of the U.P. Trade Tax Act were valid when the original assessment had already examined the trade discounts, refund by credit notes, and entitlement to refund, and whether the impugned sanction order was vitiated for want of reasons and fresh material.

Analysis: The original assessment had considered the petitioner's discount structure, the credit notes issued to customers, the relevant accounts, and the question whether the excess tax deposited was refundable. A specific finding had been recorded that the discounts were passed on and that the excess tax was refundable to the extent found in the assessment order. The sanction order for reopening merely referred to the proposal and reply but did not disclose any independent reason or examine the petitioner's response. No fresh material or tangible basis was shown to justify reopening, and the new defence taken in the counter affidavit was not the foundation of the sanction or reassessment. In these circumstances, the exercise of power was mechanical and reflected non-application of mind.

Conclusion: The sanction under Section 21(2) and the consequential reassessment could not be sustained; the challenge succeeded and the petitioner obtained relief.

Final Conclusion: Reassessment was invalid because the authority acted without recorded reasons and without new material, after the relevant issues had already been examined in the original assessment.

Ratio Decidendi: Reopening of assessment under Section 21(2) cannot be sustained on a mechanical sanction order; it must rest on recorded reasons and fresh, relevant material, and cannot be used to revisit matters already consciously examined in the original assessment on a mere change of opinion.

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