1994 (7) TMI 335 - HC - VAT and Sales Tax

Summary

Issues Involved:
The judgment addresses the challenge to a notice u/s 21 of the U.P. Sales Tax Act, 1948, seeking to quash the notice dated February 13, 1980. The key issues include the validity of the notice, disclosure of reasons, change of opinion, and the legality of reassessment.

Validity of Notice and Disclosure of Reasons:
The petitioner, a company manufacturing safety razor blades, challenged a notice u/s 21 of the U.P. Sales Tax Act, arguing that it lacked specificity regarding the applicable tax acts and did not provide a valid reason for the notice. The notice was challenged for not disclosing reasons and for potentially being a case of change of opinion, as it was issued without substantial grounds.

Change of Opinion and Reassessment:
The judgment examined the assessment order and found that the impugned notice amounted to re-examining the same matter without new evidence, constituting a change of opinion. It was emphasized that a notice cannot be issued solely based on a change of opinion without fresh material for the relevant assessment year.

Legal Precedents and Application:
Citing legal precedents, the judgment highlighted that a notice u/s 21 cannot be issued solely on the basis of a change of opinion without new material. The court referred to cases under the Income-tax Act, emphasizing that reassessment cannot be initiated merely due to a change of opinion without additional substantive grounds.

Conclusion:
Based on the analysis, the court quashed the notice u/s 21 of the U.P. Sales Tax Act dated February 13, 1980, as it was deemed to be a change of opinion without valid reasons. The writ petition was allowed with costs, in favor of the petitioner.

This summary provides a detailed overview of the judgment, addressing the issues of notice validity, disclosure of reasons, change of opinion, legal precedents, and the ultimate decision to quash the notice under section 21 of the U.P. Sales Tax Act.