Reopening of trade tax assessment fails where ink purchases alone do not establish a works contract or tangible escapement material.

Reopening of a trade tax assessment under section 21 of the U.P. Trade Tax Act requires a bona fide reason to believe based on tangible, relevant material with a live nexus to escapement of turnover, and the reassessment notice was unsustainable where that standard was not met. Mere reliance on the assessee's use of ink for printing books, without more, did not show that the assessee was carrying on a works contract. The publishing agreement indicated publication and sale of books for royalty, including supply at discounted rates to the Government, but it did not disclose the essential ingredients of a works contract. The authority acted on presumption rather than relevant material and failed to apply its mind to the contract terms.

---

---

Issues: Whether the authorization to reopen the trade tax assessment and the consequential reassessment notice were valid when the only basis was that the assessee used ink for printing books under a publishing agreement, and whether such material showed a works contract or other tangible material giving rise to a reason to believe that turnover had escaped assessment.

Analysis: Reopening under section 21 of the U.P. Trade Tax Act requires a bona fide reason to believe, supported by tangible and relevant material having a live nexus with escapement of assessment. A mere reference to purchase of ink, without more, does not establish that the assessee was executing a works contract. The agreement showed publication and sale of books for royalty, with supply at discounted rates to the Government, but it did not disclose the essential ingredients of a works contract. The authority did not demonstrate application of mind to the contract terms and proceeded on a presumption rather than on relevant material.

Conclusion: The reopening was not supported by tangible material or a valid reason to believe, and the authorization and consequential notice were unsustainable.

---