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2015 (1) TMI 1138 - ALLAHABAD HIGH COURTNotice for reassessment issued u/s 21(2) of U.P. Trade Tax Act – Grant of exemption on sale of books from payment of trade tax as per Notification No.TT-2-63/XI-9(116)/94-U.P. Act-15/48-Order-95 dated 16th January, 1995 – Held that:- There has been a total non-application of mind - the mere fact that the petitioner is importing ink for the purpose of importing books does not lead to any conclusion that the printing of books is for the purpose of execution of a works contract - there must be more material other than the purchase of ink to come to a prima facie satisfaction that the purchase of ink was for the execution of a works contract - mere purchase of ink is not sufficient to hold that the petitioner was engaged in the execution of a works contract - the order of authorization does not indicate that the authority had perused the terms and conditions of the contract, which led him to believe that the contract was nothing else but a works contract and was not a contract for the publication of books - The reasons given by the authority in the authorization order is, that since there exists a contract between the petitioner and the State Government, therefore, it is presumed that it is a works contract - On such presumption, notices under Section 21(2) of the Act cannot be issued nor can authorization be granted for reassessment. The contract clearly indicates that it relates to printing and supply of printed material and is not a works contract - works contract is normally done on the basis of specification of printing given by the buyer, which in the instant case is lacking - there is nothing on record to indicate that the petitioner is executing the printing of the books as a works contract for a buyer - the foundational requirement of sub-section (1) of Section 21 of the Act for reopening the assessment is lacking - The reason to believe that income had escaped assessment is not based on any tangible material and the reasons to believe that has been formed that some income had escaped assessment is not based on any relevant material nor there is a live link between the formation of the belief and the material available before the authority - in the absence of a vital link having not being established between the reasons and the evidence before the authority, the reason to believe for reopening the assessment was not given in good faith but was based on extraneous or irrelevant consideration - the reasons recorded is not based on any material evidence and the order of authorization and the consequential notice issued for reassessment cannot be sustained – Decided in favour of petitioner assessee.
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