Reassessment jurisdiction under U.P. VAT requires material showing escaped turnover; mere suspicion or roving inquiry is insufficient.

Reassessment under Section 29 of the U.P. VAT Act, 2007 could be initiated only on relevant material giving rise to a bona fide reason to believe that turnover had escaped assessment. Mere suspicion, or a fishing inquiry to verify whether liability might arise, was insufficient. On the facts, the materials relied on did not show that any flat had been booked or sold during the relevant assessment year, and no allotment had been made until later. Because tax on the works contract or deemed sale could arise only after a purchaser contract came into existence, the notice and sanction were held without jurisdiction and quashed.

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Issues: Whether the reassessment notice under Section 29 of the U.P. VAT Act, 2007 and the sanction granted under Section 29(7) were jurisdiction, in the absence of material showing escapement of turnover or a valid reason to believe for Assessment Year 2008-09.

Analysis: Reassessment under Section 29 could be initiated only if the assessing authority had a rational and germane basis to believe that turnover had escaped assessment. Mere suspicion, or a desire to verify whether liability might arise, was insufficient. On the facts, the materials referred to by the revenue, namely the survey report, later assessment orders, the assessee's earlier stand, and the purchase of construction material, did not show that any flat had been booked or sold during the relevant assessment year. The record instead showed that no flat was allotted until 12.11.2010. In light of the legal position governing works contracts and deemed sale, tax could arise only after a contract with a purchaser came into existence; construction undertaken before any such booking or allotment did not, by itself, establish a taxable event. The proposed reassessment was therefore based on a fishing and roving inquiry rather than on material capable of supporting jurisdiction.

Conclusion: The reassessment notice and the sanction order were without jurisdiction and liable to be quashed.

Final Conclusion: The challenge succeeded because the revenue failed to show the foundational material necessary to reopen assessment, and the writ petition was allowed.

Ratio Decidendi: Reassessment can be initiated only on the basis of relevant material giving rise to a bona fide reason to believe that turnover escaped assessment; absent such material and absent a taxable event during the relevant period, the notice is without jurisdiction.

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