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TMI Blog1996 (7) TMI 521X X X X Extracts X X X X X X X X Extracts X X X X ..... e entry: "Yarn of all kinds except those covered by any other notification". at the rate of 2 per cent. But issuance of notice under the aforesaid provision is founded on the basis of the decision of the learned single Judge in the case of Ganga Devi Agencies v. Commissioner of Sales Tax STI 1994 All. 212 wherein the commodity was held taxable as unclassified item. 3.. For the petitioners contention is, the said decision cannot be an authority to treat the said commodity as unclassified as the said decision was arrived in the absence of any evidence adduced by the dealer, viz., mono filament is of the technical specifications mentioned in the instructions of the Central Board of Customs and Central Excise, assessed to excise duty and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified item, unless this is clarified by this Court the authorities will be bound. 5.. From the aforesaid quoted passage in the case of Ganga Devi Agencies STI 1994 All. 212, it is clear that the said decision was arrived at in the absence of material placed by the dealer not only before this Court but even before any of the statutory authority under the Act. This Court in that decision further recorded, while concluding: "..........In my view therefore, in the absence of any material to show that the article in question is either capable of being used as yarn or is known as such in the trade or commercial circles, it is not possible to accept the same as yarn simply because it has a similar appearance." 6.. The said decision is a deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (SC); AIR 1973 SC 370: "...........Question in the circumstances arises as to what is the import of the words 'reason to believe', as used in the section. In our opinion, these words convey that there must be some rational basis for the assessing authority to form the belief that the whole or any part of the turnover of a dealer has, for any reason, escaped assessment to tax for some year. If such a basis exists, the assessing authority can proceed in the manner laid down in the section. To put it differently, 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 necessaril ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "........This proposition clearly envisages a formation of opinion by the Income-tax Officer on the basis of material already on record provided the formation of such opinion is consequent on 'information' in the shape of some light thrown on aspects of facts or law which the Income-tax Officer had not earlier been conscious of............on further research into law, he finds that there was a direct decision holding that category of receipt to be an income receipt. He would be entitled to reopen the assessment under section 147(b)........" 10.. Kalpana Kala Kendra v. Sales Tax Officer [1989] 75 STC 198 (All.); 1989 UPTC All. 597: "Section 21, U.P. Sales Tax Act, 1948-Notice under-Condition precedent for-Reason to believe-Opinion to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch has direct nexus with the reason to believe and rationale of escaped assessment. In the present case only reasons to believe disclosed is the case of Ganga Devi Agencies STI 1994 All. 212. As we have observed and clarified, the said decision was based since the dealer did not place any material before the authorities. This decision would not be of any binding effect on the various statutory authorities under the Act while dealing with cases of dealers, who place materials to substantiate their claim of the commodity falling within the entry "yarn of all kinds ". It is significant, this Court in that decision merely upheld the decision of the Sales Tax Tribunal, as it found dealer did not substantiate his claim by adducing any material. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision. In such cases which would be very rare class, notwithstanding show cause not having jurisdictional error or otherwise valid notice as in cases of section 10-B, this Court will not hesitate to interfere, in case its earlier decision is to be corrected or explained being inevitable. 16.. The present case falls under this last category. Both notices under section 21 or 10-B are based solely on the earlier decision of this Court. Showing cause in such cases and its result is known. The authorities will be well within their bounds to revise or reassess a dealer according to the law as laid down which escaped assessment. But in a case, as in the present case, where a case is made out requiring earlier decision to be explained or correc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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