1972 (7) TMI 83 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to notice under section 21 of the U.P. Sales Tax Act based on lack of recorded reasons and absence of material for reasonable belief of escaped turnover.

Analysis:
The petitioner, a registered dealer, challenged a notice under section 21 of the U.P. Sales Tax Act for the assessment year 1966-67, alleging that the Sales Tax Officer did not record any reasons before issuing the notice and lacked material for forming a reasonable belief of escaped turnover. The court noted that unlike the Income-tax Act, the U.P. Sales Tax Act does not mandate recording reasons for such notices. The absence of statutory requirement for recording reasons does not invalidate the proceedings. The court emphasized that while the notice need not specify the items of turnover or material, the Sales Tax Officer must sufficiently inform the assessee of the case to be met, aligning with principles of natural justice. Referring to relevant case law, the court held that the notice in question was valid.

2. Sufficiency of material for reasonable belief of escaped turnover and jurisdiction of Sales Tax Officer post remand order.

The petitioner contended that the Sales Tax Officer had material before passing the assessment order and could have used it then. The court rejected this argument, stating that the assessment order in question was post a remand order limited to scrutinizing specific exemptions, not a fresh assessment. The court emphasized that the Sales Tax Officer's belief of escaped turnover must be based on relevant material, which was present in this case. The court held that the notice under section 21 was justified, dismissing the petitioner's contention of lack of material. The court further clarified that the Sales Tax Officer's jurisdiction post remand was restricted to the matters specified in the remand order, precluding a general reassessment.

In conclusion, the court dismissed the petition, upholding the validity of the notice under section 21 of the U.P. Sales Tax Act and emphasizing the necessity of relevant material for forming a reasonable belief of escaped turnover. The court also clarified the jurisdiction of the Sales Tax Officer post a remand order, highlighting the limitations on reassessment scope in such cases.