Reassessment on unexamined disclosed material upheld where diesel purchases were not properly considered for turnover assessment.

Reassessment under Section 21 of the U.P. Trade Tax Act was treated as permissible where disclosed diesel purchases had not been properly examined for their relevance to manufacture, sale, turnover, and captive power generation. The Court indicated that material already on record can support a belief of escaped turnover if it was not consciously considered in the original assessment, but reopening is barred where it amounts only to a second view on already examined material. On the same reasoning, the sanction and notices were upheld because the record showed a rational basis for reopening and the case was not one of mere change of opinion.

---

---

Issues: (i) Whether reassessment under Section 21 of the U.P. Trade Tax Act could be initiated on the basis of disclosed diesel purchases where the assessing authority had not examined their relevance to production and turnover. (ii) Whether the sanction and notices for reassessment were vitiated for want of recorded reasons and for being based on a mere change of opinion.

Issue (i): Whether reassessment under Section 21 of the U.P. Trade Tax Act could be initiated on the basis of disclosed diesel purchases where the assessing authority had not examined their relevance to production and turnover.

Analysis: The disclosed material did not show that the assessing authority had applied its mind to the bulk purchase and consumption of diesel in relation to manufacture, sale, turnover, and allied uses of electricity generated by captive generating sets. Section 21(1) permits reassessment where the authority has reason to believe that turnover has escaped assessment, and such belief can arise even from material already on record if it was not properly considered. Reassessment is barred only where the authority merely seeks a second view on material already consciously examined.

Conclusion: The reassessment could validly be initiated, and this issue is decided against the assessee.

Issue (ii): Whether the sanction and notices for reassessment were vitiated for want of recorded reasons and for being based on a mere change of opinion.

Analysis: The Court found sufficient material supporting the belief of escaped turnover, and held that the failure to record or discuss reasons in the manner suggested by the assessee did not invalidate the proceedings where the authority had a rational nexus for reopening. The case was not one of mere change of opinion, because the original assessment had omitted consideration of the relevance of diesel consumption to the taxable turnover.

Conclusion: The sanction and notices were not vitiated, and this issue is decided against the assessee.

Final Conclusion: The writ petition failed because reassessment was held permissible on the facts, and the impugned reassessment proceedings were sustained.

Ratio Decidendi: Reassessment may be initiated where material already on record was not properly applied to the original assessment and gives the authority reason to believe that turnover has escaped assessment, but not where the notice reflects only a mere change of opinion on consciously considered material.

---