Reassessment notice jurisdiction depends on prior material and bona fide belief; later reasons cannot cure the defect.

A reassessment notice under the U.P. Trade Tax Act is valid only if, before issuance, the Assessing Officer has relevant material giving rise to a bona fide and rational reason to believe that turnover has escaped assessment. The pre-existing jurisdictional basis must exist prior to notice; it cannot rest on arbitrary or extraneous grounds. Recording reasons in the notice itself may not always be mandatory, but the material and formation of belief must be shown on the file before issuance. Subsequent disclosure of reasons cannot cure the absence of that foundation, and a later notice setting out reasons does not validate the original notice.

---

---

Issues: Whether reassessment notices issued under Section 21 of the U.P. Trade Tax Act were valid when no reasons were recorded before issuance and whether subsequent disclosure of reasons could cure the defect.

Analysis: The jurisdiction to initiate reassessment depends on the Assessing Officer having, before issuing notice, material giving rise to a bona fide and rational belief that turnover has escaped assessment. The belief must be based on relevant material, must have a nexus with the alleged escapement, and cannot rest on an arbitrary or extraneous basis. Recording of reasons in the notice itself may not always be mandatory, but the material and the formation of belief must exist prior to issuance of the notice. On the facts, no reason was recorded in the order sheet or otherwise shown to have been considered before the notice dated 05.09.2005 was issued. The later notice dated 14.09.2005 setting out reasons could not validate the original notice. The departmental circular also required reasons to be indicated in the notice and on the file.

Conclusion: The reassessment notices were invalid for want of prior recorded reasons and were liable to be quashed.

Final Conclusion: The writ petition succeeded and the impugned reassessment proceedings were set aside.

Ratio Decidendi: A notice for reassessment is without jurisdiction unless, before its issuance, the Assessing Officer has relevant material leading to a bona fide reason to believe that turnover has escaped assessment; subsequent reasons cannot cure the absence of that pre-existing jurisdictional foundation.

---