TaxTMI 
TaxTMI 
2014 (9) TMI 340
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....es Act and is engaged in the business of manufacture and sale of M.S. Bar/ Tor Steel/ T.M.T. Bar etc. The petitioner, being a new unit, holds an eligibility certificate under Section 4-A of the U.P. Trade Tax Act. For the assessment year 2003-04 under U.P. Trade Tax Act as well as under Central Sales Tax Act, the books of account were rejected and a best judgment assessment was passed on 28.02.2005 after considering the material evidence. The petitioner, being aggrieved, filed an appeal before the Joint Commissioner (Appeals)-II, Trade Tax, NOIDA, both under U.P. Trade Tax Act and Central Sales Tax Act, which is pending consideration. During the pendency of the appeal, the petitioner received a notice dated 05.09.2005 under Section 21 of th....
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.... it was indicated that a Special Investigation Branch, Trade Tax, NOIDA had surveyed an iron steel trading firm M/s P.K. Enterprises on 19.03.2005 and seized certain form-49, which were checked by digital ultraviolet photography, in which it was found that the original name of the purchaser was omitted and the name of M/s P.K. Enterprises was written, and on this basis, an opinion was formed that certain part of the turnover of the petitioner had escaped assessment. The learned counsel submitted that it was not necessary that reasons should be recorded in the notice or on the file and that the Assessing Officer could issue a notice under Section 21 based on subjective satisfaction on the tangible material available on the file, on the basis....
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....Traders, Modi Nagar, Ghaziabad vs. Additional Commissioner, Grade-I, Trade Tax, Zone Ghaziabad and another, 2008 UPTC 392. Similar view was reiterated by another Division Bench in Anand Prakash Agarwal vs. Commissioner of Income Tax (Central) and others, Writ Petition No.1367 of 2005 and other companion cases, decided on 29.5.2014. The Division Bench after considering the case in Assistant Commissioner of Income Tax vs. Rajesh Jhaveri Stock Brokers P. Ltd., (2007) 291 ITC 500 (SC), held that at the stage of issuance of notice the only question to be considered was whether there was relevant material on which a reasonable person could have formed the requisite belief. In M/s Rubber Chem Sadabad Gate Hathras vs. The Additional Commissioner ....
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.... to tax for some year. If there are, in fact, some reasonable grounds for the assessing authority to believe that the whole or any part of the turnover of a dealer has escaped assessment, it can take action under the section. Reasonable grounds necessarily postulate that they must be germane to the formation of the belief regarding escaped assessment. If the ground are of an extraneous character, the same would not warrant initiation of proceedings under the above section. If, however, the grounds are relevant and have a nexus with the formation of belief regarding escaped assessment, the assessing authority would be clothed with jurisdiction to take action under the section. Whether the ground are adequate or not is not a matter which woul....
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....nder Section 21 of U.P. Sales Tax Act, it was necessary that the Assessing Officer should have before him the material, which induced a reasonable belief in his mind that the turnover of the assessee either in whole or in part had escaped assessment. The satisfaction of the Sales Tax Officer as to the escapement of the turnover was not subjective but has to be based upon relevant material. In Sales Tax Officer Vs. Uttareswari Rice Mills, AIR 1972 SC 2617, the Supreme Court held that the language of Section 12(8) of the Orissa Sales Tax Act, 1947, which is similar to the provision of Section 21 of the U.P. Trade Tax Act does not expressly or by necessary implication postulates recording of reasons in the notice, which is issued to the deale....
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.... indicate from the counter affidavit that the survey report was on the record, which was considered by the Assessing Officer at the time of issuance of the notice date 05.09.2005. In the absence of any reasons being recorded, one finds that the notice was issued without recording any reason therein thereby indicating non-application of mind. Subsequent recording of reasons in the notice dated 14.09.2005 will not validate the original notice dated 05.09.2005. The mandate under Section 21 of the Act is, that there must be reasons to believe that some part of the turnover had escaped assessment to tax. The reasons to believe must be formed on the basis of material before the issuance of the notice by the Assessing Officer, i.e. prior to 05.09....