Reassessment needs tangible material, and unrebutted PWD supply records defeated the Bitumen tax levy.

Reassessment under section 21 of the U.P. Trade Tax Act requires objective material with a rational nexus to a belief that turnover has escaped assessment; mere suspicion, conjecture, or dissatisfaction with the original assessment is insufficient, so proceedings initiated without adverse material against the dealer's documents were invalid. Tax on Bitumen could not be sustained where the dealer produced an application, affidavit, and certificate showing PWD supply for road work, and the record contained no contrary material rebutting that explanation. The reassessment and the Bitumen levy were therefore set aside, and the assessee obtained relief with costs.

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Issues: (i) whether reassessment proceedings under section 21 of the U.P. Trade Tax Act, 1948 could be initiated in the absence of material giving rise to a reason to believe that turnover had escaped assessment; and (ii) whether tax could be levied on Bitumen when the dealer produced material showing that it was supplied by the PWD department and no adverse material existed against that claim.

Issue (i): Whether reassessment proceedings under section 21 of the U.P. Trade Tax Act, 1948 could be initiated in the absence of material giving rise to a reason to believe that turnover had escaped assessment.

Analysis: Reassessment under section 21 requires objective material having a rational connection with the belief that turnover has escaped assessment. Mere suspicion, conjecture, or dissatisfaction with the earlier assessment is insufficient. The record showed that the cash memos and tax-paid purchases were not disbelieved, and the reassessment was founded mainly on the selling dealer's alleged failure to produce books and sale lists, without any adverse finding against the purchaser's documents or any enquiry showing escapement.

Conclusion: The initiation of reassessment proceedings was invalid and is answered in favour of the assessee.

Issue (ii): Whether tax could be levied on Bitumen when the dealer produced material showing that it was supplied by the PWD department and no adverse material existed against that claim.

Analysis: The dealer produced an application under section 12-B of the U.P. Trade Tax Act, 1948, supported by an affidavit and a certificate from the Superintending Engineer, showing that the Bitumen was supplied by the PWD department for road work. In the absence of contrary material on record, and with no finding that the Bitumen was purchased or used by the dealer in the manner assumed by the department, the levy could not be sustained.

Conclusion: The levy of tax on Bitumen was unsustainable and is answered in favour of the assessee.

Final Conclusion: The revision succeeds, the reassessment and the levy on Bitumen are set aside, and the dealer obtains complete relief with costs.

Ratio Decidendi: Reassessment can be sustained only when there is tangible material creating a rational nexus with a belief of escaped assessment, and a tax levy cannot stand where the dealer's documentary explanation remains unrebutted by contrary material.

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