Reassessment jurisdiction fails where recorded reasons do not show escaped turnover or satisfy Rule 9(3) conditions.

Reassessment under Section 29 of the U.P. Value Added Tax Act, 2008 required a recorded, bona fide reason to believe that turnover had escaped assessment, supported by material. Rule 9(1) allowed deduction of actual labour, service and profit components, while Rule 9(3) applied only where separate accounts were not maintained, were unreliable, or did not credibly show those components. As the recorded reasons and sanction order did not quantify the alleged excess deduction or identify any material showing faulty or absent accounts, the jurisdictional preconditions were not satisfied. The sanction for reassessment was therefore without jurisdiction and the writ petition succeeded.

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Issues: Whether the sanction for reassessment was valid when the recorded reasons did not disclose any quantified escapement of turnover and did not establish the factual preconditions for invoking Rule 9(3) for works-contract deductions.

Analysis: Reassessment jurisdiction under Section 29 of the U.P. Value Added Tax Act, 2008 could be assumed only on a recorded and bona fide reason to believe that turnover had escaped assessment. Rule 9(1) permits deduction of actual labour, service and profit components, while Rule 9(3) operates only as an exception when accounts do not separately show such components, are not worthy of credence, or are not maintained at all. The reasons and the sanction order neither quantified the alleged excess deduction nor stated any material showing that the petitioner had failed to maintain separate accounts or that its books were unreliable. In the absence of such jurisdictional facts, the proposed reassessment amounted to an impermissible review or inquiry into facts that had not been lawfully founded as escaped turnover.

Conclusion: The sanction for reassessment was without jurisdiction and could not be sustained.

Final Conclusion: The writ petition succeeded and the sanction order permitting reassessment for the relevant assessment year was quashed.

Ratio Decidendi: Reassessment cannot be initiated unless the authority records a bona fide reason to believe, supported by material, that taxable turnover has escaped assessment and the statutory preconditions for the exceptional deduction-computation rule are shown to exist.

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