# M/s Parmarth Steel & Alloys Pvt. Ltd., Bijnor v. State of U.P. & Ors

- **Citation:** (2022) 4 ILRA 994
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-03-28
- **Case number:** Writ Tax No. 874 of 2010
- **Bench:** Surya Prakash Kesarwani, Jayant Banerji
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-parmarth-steel-alloys-pvt-ltd-bijnor-v-state-of-u-p-ors-48387
- **Pages:** 9

## Headnote

A. Trade Tax Law - Reassessment - U.P.
Trade Tax Act, 1948 - Section 21(1) - It is
settled principle of law that proceedings
u/s 21 of the Act, 1948 can be initiated if
the material on which the Assessing
Authority
bases
its
opinion,
is
not
arbitrary, irrational, vague, distant or
irrelevant. 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 S. 21 of the Act, 1948. If the
grounds 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. (Para 17)

B. Adequacy of grounds is not a matter
which would be gone into by the High
Court for the sufficiency of the grounds
which induced the assessing authority to
act is not a justiciable issue. The question
as to whether that material is sufficient
for making assessment or re-assessment
u/s 21 of the Act would be gone into after
notice is issued to the dealer and he has
been heard in the matter or given an
opportunity for that purpose. The assessing
authority would then decide the matter in the
light of material already in its possession as well
as fresh material procured as a result of the
enquiry which may be considered necessary.
(Para 17)

Facts of the present case leave no manner of
doubt that the Assessing Authority was having
relevant material in his hands on the basis of
which he had reason to believe that for the
Assessment Years in question, the petitioners
have evaded tax on undisclosed sales and made
huge transactions of purchases and sales out of
the Books of Account. (Para 18)

Writ petitions dismissed. (E-4)

Precedent followed:

## Text

994 INDIAN LAW REPORTS ALLAHABAD SERIES
carry the judgments into effect"; "the
power to enquire into the facts, to apply the
law, to pronounce the judgment and to
carry it into execution."

29. In the case of Nusli (supra)
Hon'ble Supreme Court vide paragraph 88
held that "there is difference between
existence of jurisdiction and exercise of
jurisdiction. The existence of jurisdiction is
reflected by the fact of amenabilities of the
jurisdiction to attack in the collateral
proceedings. If the court has an inherent
lack of jurisdiction its decision is open to
attack as nullity."

30. From the scheme of the Act as
discussed above it is evident that the
respondent no. 4 being proper officer under
the Act having territorial jurisdiction over
the petitioner assessee is competent to
exercise the powers conferred under the
Act in respect of assessee, falling under his
territorial jurisdiction. But as per minutes
of the meeting of the G.S.T. Council and
the circular issued in this regard, the
distribution of work for administrative
convenience was made and as per which
the case of the petitioner was assigned to a
central officer. Thus it is not a case that the
state officer i.e. the respondent no. 4 lacks
inherent jurisdiction but it is a case where
the jurisdiction has been exercised by the
respondent no. 4 in the absence of any
objection or pointing out by the petitioner
that the case has been assigned to a central
officer. The jurisdiction upon a proper
officer has been conferred by section 6 of
the Act. Thus a proper officer has
jurisdiction
over
the
assessees
for
assessment falling under his territorial
jurisdiction but in terms of the aforesaid
work allotment order No. 04/2021 dated
12.9.2018 he was to take up those cases
which have been allotted to him.

31. Considering the facts and
circumstances
and
discussions
made
above, we find that the impugned show
cause notice and the impugned assessment
order do not suffer from any inherent lack
of jurisdiction and instead it is the result of
contributory error of jurisdiction by the
respondent no. 4., in the circumstances that
the petitioner submitted to the jurisdiction of
the respondent no. 4 without informing or
without raising objection as to the assignment
of the case to the central officer and after well
participating in the assessment proceedings
allowed the assessment order to be passed by
the respondent no. 4. Had the petitioner
objected to it at the initial stage or during the
course of assessment proceedings, the
position could have been rectified by the
respondent no. 4 by informing the central
officer
to
complete
the
assessment
proceedings.

32. For all the reasons aforestated, the
writ petition is dismissed leaving it open for
the assessee-petitioner to challenge the
impugned assessment order in appeal under
section 107 of the CGST/UPGST Act.
----------

(2022)04ILR A994
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 28.03.2022

BEFORE

THE HON'BLE SURYA PRAKASH
KESARWANI, J.
THE HON'BLE JAYANT BANERJI, J.

Writ Tax No. 874 of 2010
With Writ Tax Nos. 875 of 2010, 353 of 2012,
13 of 2014

M/s Parmarth Steel & Alloys Pvt. Ltd.,
Bijnor ...Petitioner
Versus
State of U.P. & Ors. ...Respondents
4 All. M/s Parmarth Steel & Alloys Pvt. Ltd., Bijnor Vs. State of U.P. & Ors.
995
Counsel for the Petitioner:
Sri Krishna Agrawal, Sri P. Agrawal

Counsel for the Respondents:
C.S.C.

A. Trade Tax Law - Reassessment - U.P.
Trade Tax Act, 1948 - Section 21(1) - It is
settled principle of law that proceedings
u/s 21 of the Act, 1948 can be initiated if
the material on which the Assessing
Authority
bases
its
opinion,
is
not
arbitrary, irrational, vague, distant or
irrelevant. 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 S. 21 of the Act, 1948. If the
grounds 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. (Para 17)

B. Adequacy of grounds is not a matter
which would be gone into by the High
Court for the sufficiency of the grounds
which induced the assessing authority to
act is not a justiciable issue. The question
as to whether that material is sufficient
for making assessment or re-assessment
u/s 21 of the Act would be gone into after
notice is issued to the dealer and he has
been heard in the matter or given an
opportunity for that purpose. The assessing
authority would then decide the matter in the
light of material already in its possession as well
as fresh material procured as a result of the
enquiry which may be considered necessary.
(Para 17)

Facts of the present case leave no manner of
doubt that the Assessing Authority was having
relevant material in his hands on the basis of
which he had reason to believe that for the
Assessment Years in question, the petitioners
have evaded tax on undisclosed sales and made
huge transactions of purchases and sales out of
the Books of Account. (Para 18)

Writ petitions dismissed. (E-4)

Precedent followed:

1. St. of U. P. & ors. Vs Aryaverth Chawal Udyog
(supra), (2015) 17 SCC 324 (Para 9)

2. The Commissioner of Sales-tax U.P. Vs M/s.
Bhagwan Industries (P) Ltd., Lucknow, AIR 1973
SC 370 (Para 16)

Present petitions challenge notices for
reassessment u/s 21(1) of the U.P. Trade
Tax Act, 1948.

(Delivered by Hon'ble Surya Prakash
Kesarwani, J. & Hon'ble Jayant Banerji, J.)

1. These cases have been remanded
by the Hon'ble Supreme Court by order
dated 28.8.2019 passed in civil appeals.

2. The aforesaid writ petitions have
been filed challenging the notices for
reassessment under Section 21(1) of the
U.P. Trade Tax Act, 1948.

3. After the aforesaid order of the
Hon'ble Supreme Court, these writ petitions
were listed on 18.2.2021, 5.3.2021 and
4.3.2022.

4. On 4.3.2022, this Court passed the
following order:

"Case called out. None appears for the
petitioner to press this writ petition.

List/put up in the additional cause list
in
the
week
commencing
21.3.2022
alongwith connected matter."

5. Today, case has been called out. No
one appears for the petitioners to press the
writ petitions even in the revised call.
996 INDIAN LAW REPORTS ALLAHABAD SERIES

6. In the aforesaid Writ Tax No. 874
of 2010, Writ Tax No. 875 of 2010, Writ
Tax No. 353 of 2012 and Writ Tax No. 13
of 2014, the petitioners have prayed for the
following relief:

Relief as
prayed
in Writ
Tax No.
874
of
2010

Relief as
prayed
in Writ
Tax No.
875
of
2010
Relief as
prayed
in Writ
Tax No.
353
of
2012
Relief as
prayed
in Writ
Tax No.
13
of
2014

i) issue
a
suitable
writ
order or
directio
n in the
nature
of
writ
of
certiorar
i
quashin
g
the
permissi
on
granted
by
the
opposite
party
no. 3 on
30.4.201
0 for the
assessm
ent year
200304,
200405,
200506,
2006-07
i) issue
a
suitable
writ
order or
directio
n in the
nature
of
writ
of
certiorar
i
quashin
g
the
permissi
on
granted
by
the
opposite
party
no. 3 on
30.4.201
0 for the
assessm
ent year
200304,
200405,
2005-06
& 200607
and
i. Issue a
writ,
order or
directio
n in the
nature
of
certiorar
i
quashin
g
the
impugne
d
reassessm
ent
proceedi
ngs for
the
assessm
ent year
2005-06
under
Sub
Section
(2)
of
Section
21
of
the Act.
ii. Issue
a
writ,
order or
directio
i) issue
a
suitable
writ
order or
directio
n in the
nature
of
certiorar
i
quashin
g
notices
dated
19.10.20
13
issued
by
Respond
ent
No.7).
ii) issue
a
suitable
writ
order or
directio
n in the
nature
of
certiorar
and the
consequ
ential
notice
under
Section
21(1)
for
the
assessm
ent year
2003-04
(ANNE
XURE
NO. 10
& 12) of
this Writ
Petition
as well
as
the
notice
issued
under
sub
section
1
of
section
21
of
the Act
by
the
opposite
party
no. 4 for
the
assessm
ent year
2007-08
(ANNE
XURE
NO. 12)
to
this
Writ
Petition
after
summon
ing the
the
consequ
ential
notice
under
Section
21(1)
for
the
assessm
ent year
2003-04
(ANNE
XURE
NO. 11
& 13) of
this
Writ
Petition
as well
as
the
notice
issued
under
sub
section
1
of
section
21
of
the Act
by
the
opposite
party
no. 4 for
the
assessm
ent year
2007-08
(ANNE
XURE
NO. 13)
to
this
Writ
Petition
after
summon
n in the
nature
of
certiorar
i
quashin
g
the
impugne
d notice
dated
12.03.20
12
(Annexu
re No. 1
to
the
writ
petition)
issued
by
the
respond
ent no. 3
and
further
proceedi
ng
pending
before
respond
ent no. 3
for
assessm
ent year
2005-06
under
Sub
Section
(2)
of
Section
21
of
the Act.
iii. Issue
a
writ,
order or
directio
n in the
i
quashin
g
the
approval
dated
24.3.201
1 for the
assessm
ent year
2004-05
granted
by
the
Opposit
e Party
No.
3
under
subsecti
on 2 of
Section
21
(ANNE
XURE
NO. 1)
to
this
Writ
petition
after
summon
ing the
records.
iii) Issue
a
suitable
writ
order or
directio
n in the
nature
of
writ
of
mandam
us/
prohibiti
on
directin
4 All. M/s Parmarth Steel & Alloys Pvt. Ltd., Bijnor Vs. State of U.P. & Ors.
997
records.
ii) issue
a
suitable
writ
order or
directio
n in the
nature
of
mandam
us/prohi
bition
directin
g/prohib
iting the
Opposit
e Party
No.
4
not
to
impose
and
realise
tax
under
section
21
of
the Act
for
the
assessm
ent year
200304,
200405,
200506,
2006-07
& 200708
during
the
pendenc
y of this
Writ
ing the
records.
ii) issue
a
suitable
writ
order or
directio
n in the
nature
of
mandam
us/prohi
bition
directin
g/prohib
iting the
Opposit
e Party
No.
4
not
to
impose
and
realise
tax
under
section
21
of
the Act
for
the
assessm
ent year
200304,
200405,
200506,
2006-07
& 200708
during
the
pendenc
y of this
nature
of
mandam
us
prohibiti
ng/
directin
g
the
respond
ent nos.
3 and 4
not
to
proceed
in
any
manner
in
pursuan
ce
of
notice
dated
12.03.20
12
(Annexu
re No. 1
to
the
writ
petition)
for
assessm
ent year
2005-06
under
Sub
Section
(2)
of
Section
21
of
the Act.
g/
prohibiti
ng
the
Opposit
e Party
no. 3 &
4 not to
proceed
in
any
manner
in
pursuan
ce of the
notice
under
Section
21
of
the Act
for
the
assessm
ent year
200405,
2005-06
& 200607.

Petition
before
this
Hon'ble
Court or
till
the
finalizat
ion
of
proceedi
ng
by
the
Central
Excise
Departm
ent.
iii) issue
a
suitable
writ
order or
directio
n in the
nature
of
writ
of
mandam
us
directin
g
the
Opp.
Parties
not
to
take any
action
against
the
petitione
r under
Section
21
till
the
finalizat
ion
of
proceedi
ngs
in
Writ
Petition
before
this
Hon'ble
Court or
till
the
finalizat
ion
of
proceedi
ng
by
the
Central
Excise
Departm
ent.

iii) issue
a
suitable
writ
order or
directio
n in the
nature
of
writ
of
mandam
us
directin
g
the
Opp.
Parties
not
to
take any
action
against
the
petitione
r under
Section
21
till
the
finalizat
ion
of
998 INDIAN LAW REPORTS ALLAHABAD SERIES
pursuan
ce of the
search
dated
10.7.200
7 under
the
Central
Excise
Act,
1944.
proceedi
ngs
in
pursuan
ce of the
search
dated
10.7.200
7 under
the
Central
Excise
Act,
1944.

7. Perusal of the reliefs sought by
the petitioners reveal that notices under
Section 21 of the UP Trade Tax Act,
1948 and the approval granted, relating to
assessment
years
2003-04,
2004-05,
2005-06
and
2006-07
have
been
challenged by the petitioners. The above
noted first three writ petitions are
pending in this Court from about a
decade and the fourth writ petition is
pending from about eight years. The
order sending back the matter to this
Court was passed by Hon'ble Supreme
Court on 28.8.2019. Two and half years
have also passed since the order of the
Hon'ble Supreme Court. Perusal of the
order-sheet as briefly noted above also
shows that the petitioners are not
appearing to press the writ petitions.

Since, none appears for the petitioners
even in the revised call and also since there
is an order of the Hon'ble Supreme Court
with certain directions, therefore, we
proceed to decide these old writ petitions
with the assistance of the learned Standing
Counsel.

8. Hon'ble Supreme Court, by the
aforesaid order, has remitted back the
matter with the following observation:

"As
a
result,
the
impugned
judgment(s)
are
set
aside
and
the
proceedings are remanded to the High
Court for reconsideration on merits in
accordance with law and in light of the
reported decision in Aryaverth Chawal
Udyog (supra)."

9. In the case of Aryaverth Chawal
Udyog (supra) reported in (2015) 17 SCC
324 (paragraphs 28 to 30), Hon'ble
Supreme Court has held as under:

"28. This Court has consistently held
that such material on which the assessing
Authority bases its opinion must not be
arbitrary, irrational, vague, distant or
irrelevant.
It
must
bring
home
the
appropriate rationale of action taken by the
assessing Authority in pursuance of such
belief. In case of absence of such material,
this Court in clear terms has held the
action taken by assessing Authority on
such "reason to believe" as arbitrary and
bad in law.

In case of the same material being
present before the assessing Authority
during both, the assessment proceedings
and the issuance of notice for reassessment proceedings, it cannot be said
by the assessing Authority that "reason to
believe" for initiating reassessment is an
error discovered in the earlier view taken
by
it
during
original
assessment
proceedings.
(See:
Delhi
Cloth
and
General Mills Co. Ltd. v. State of
Rajasthan, (1980) 4 SCC 71).

29. The standard of reason exercised
by the assessing Authority is laid down as
that of an honest and prudent person who
would act on reasonable grounds and
come to a cogent conclusion. The
necessary sequitur is that a mere change of
opinion while perusing the same material
cannot be a "reason to believe" that a case
4 All. M/s Parmarth Steel & Alloys Pvt. Ltd., Bijnor Vs. State of U.P. & Ors.
999
of escaped assessment exists requiring
assessment proceedings to be reopened.
(See: Binani Industries Ltd. v. CCT,(2007)
15 SCC 435; A.L.A. Firm v. CIT, (1991) 2
SCC 558). If a conscious application of
mind is made to the relevant facts and
material available or existing at the
relevant point of time while making the
assessment and again a different or
divergent view is reached, it would
tantamount to "change of opinion".

If an assessing Authority forms an
opinion during the original assessment
proceedings on the basis of material facts
and subsequently finds it to be erroneous; it
is not a valid reason under the law for reassessment. Thus, reason to believe cannot
be said to be the subjective satisfaction of
the assessing Authority but means an
objective
view
on
the
disclosed
information in the particular case and
must be based on firm and concrete facts
that some income has escaped assessment.

30. In case of there being a change of
opinion, there must necessarily be a nexus
that requires to be established between the
"change of opinion" and the material
present before the assessing Authority.
Discovery of an inadvertent mistake or
non-application of mind during assessment
would not be a justified ground to reinitiate
proceedings under Section 21(1) of the Act
on the basis of change in subjective opinion
(CIT v. Dinesh Chandra H. Shah, (1972) 3
SCC 231; CIT v. Nawab Mir Barkat Ali
Khan Bahadur, (1975) 4 SCC 360)."

10. The aforequoted judgement in the
case of Aryaverth Chawal Udyog (supra)
has been reproduced by the Hon'ble
Supreme Court in the aforesaid order dated
28.8.2019 while remanding the matter.

Writ Tax Nos.874 & 875, both of
2010:-

11. Perusal of the impugned order
dated 13.04.2010 relating to Assessment
Years 2003-04, 2004-05, 2005-06 and
2006-07 under proviso to Section 21(2) of
the U.P. Trade Tax Act, 1948 (hereinafter
referred to as ''the Act, 1948'), reveals that
the Additional Commissioner has granted
the permission to invoke extended period
of limitation to initiate proceedings for
reassessment
on
the
basis
of
huge
documentary material received by the
department in hard-disk and CD relating to
the petitioners found in search/ survey
conducted
by
the
Central
Excise
Department on 10.07.2007 on the business
premises of the petitioners and some other
related premises. The materials received
and materials coming in possession of the
respondent-department
revealed
huge
undisclosed
sales/
purchases
by
the
petitioner during the years in question. As
per materials available on record, the
documents received in hard-disk and CD
revealed unaccounted sales of 1557 metric
tons
M.S.
ingots
apart
from
huge
unaccounted purchases of raw material and
scrape which were not disclosed during the
course of regular assessment proceedings.
The Additional Commissioner granted
repeated opportunities to the petitioners to
submit reply but on the dates fixed, the
petitioners merely sought adjournments. As
per impugned notices under Section 21(1)
of the Act, 1948 for the Assessment Year
2003-04, the unaccounted/ undisclosed
sales of M.S. ingots of 1557.142 MT came
to light. As per impugned notice under
Section 21(1) of the Act, 1948 for the
Assessment Year 2007-08 (U.P.) for the
period from April, 2007 to June, 2007, the
undisclosed/ unaccounted sales of 6358.58
metric ton came to light on the basis of
material on record. It also came to light on
examination of the documentary materials
available in the hard-disk and DVD that the
1000 INDIAN LAW REPORTS ALLAHABAD SERIES
petitioners
have
made
following
unaccounted purchases of iron ingots from
one M/s Jain Steel, Bijnor:

Assessment Year Quantity in metric ton
 2003-04 1353.51
 2004-05 8808.74
 2005-06 5728.865
 2006-07 7757.930

12. Apart from above, the materials
available in the hard-disk also revealed
purchases of scrap by the petitioners from
various dealers and sale of ingots to various
local dealers and also to some Firms of
Uttarakhand. It also came to light on the
basis of materials available in the hands of
the respondents that the petitioners made
undisclosed
purchases
during
the
Assessment Year 2003-04 from M/s
Kamakhya Steels Pvt. Ltd., Bijnore (658.28
MT). These details of evaded purchases/
sales which have been extracted above
from the impugned notices under Section
21(1) of the Act, 1948. Evaded transactions
in some greater detail are mentioned in the
impugned notices.

Writ Tax No.13 of 2014:-

13. In this writ petition, the approval
dated 24.03.2011 for the Assessment Year
2004-05 was granted by the Additional
Commissioner under the proviso to Section
21(2) of the Act, 1948 noticing the
information
received
by
the
Deputy
Commissioner
(Special
Investigation
Branch) Second Unit, Ghaziabad through
letter No.659 dated 26.03.2010 from the
Director
General
of
Central
Excise
Intelligence, New Delhi regarding adverse
material found in search/ survey conducted
at the business premises of M/s Parmarth
Iron Pvt. Ltd. Bijnor and some other units.
The CD/ soft copy and hard-disk as
received by the respondents revealed Sale
Ledger Account and other particulars
relating to the petitioner which revealed
unaccounted/ evaded purchases/ sales of
about
Rs.4,31,35,901/-
during
the
Assessment Year 2004-05. After following
due procedure of law, the permission was
granted by the Additional Commissioner
under proviso to Section 21(2) of the Act.

14. As per notice for the Assessment
Year 2004-05, it is evident that the
respondents
were
having
relevant
information in their possession against the
petitioner
indicating
huge
evaded/
unaccounted
transactions
during
the
Assessment Year 2004-05.

Writ Tax No.353 of 2012:-

15. The impugned order granting
permission under the proviso to Section 21(2)
of the Act, 1948 for the Assessment Year
2005-06 was passed by the Additional
Commissioner, Trade Tax on the basis of
information received which revealed evaded/
unaccounted purchases/ sales of about
Rs.2,31,81,000/- as evident from the Sale
Ledger
Account
and
other
particulars
available in the hard-disk and CD/ soft copy
received from the Deputy Commissioner
(SIB), Second Unit, Ghaziabad vide letter
No.663, dated 27.03.2010, which is based on
the report/ materials received from the
Director
General
of
Central
Excise
Intelligence, New Delhi.

16. In the case of The Commissioner
of Sales-tax U.P. vs. M/s. Bhagwan
Industries (P) Ltd., Lucknow, AIR 1973
SC 370 (Paras 9 & 10), Hon'ble Supreme
Court has held as under:

"9. The controversy between the
parties has centered on the point as to
4 All. M/s Parmarth Steel & Alloys Pvt. Ltd., Bijnor Vs. State of U.P. & Ors.
1001
whether the assessing authority in the
present case had reason to believe that any
part of the turnover of the respondent had
escaped
assessment
to
tax
for
the
assessment year 1957-58. 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
necessarily postulate that they must be
germane to the formation of the belief
regarding escaped assessment. If the
grounds 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
grounds
are
adequate or not is not a matter which
would be gone into by the High Court or
this Court, for the sufficiency of the
grounds which induced the assessing
authority to act is not a justiciable issue.
What can be challenged is the existence of
the belief but not the sufficiency of
reasons for the belief. At the same time, it
is necessary to observe that the belief must
be held in good faith and should not be a
mere pretence.

10. It may also be mentioned that at
the stage of the issue of notice the
consideration which has to weigh is
whether there is some relevant material
giving rise to prima facie inference that
some turnover has escaped assessment.
The question as to whether that material
in sufficient for making assessment or reassessment under section 21 of the Act
would be gone into after notice is issued to
the dealer and he has been heard in the
matter or given an opportunity for that
purpose. The assessing authority would
then decide the matter in the light of
material already in its possession as well
as fresh material procured as a result of
the enquiry which may be considered
necessary." (Emphasis supplied)

17. It is settled principles of law that
proceedings under Section 21 of the Act,
1948 can be initiated if the material on
which the Assessing Authority bases its
opinion, is not arbitrary, irrational, vague,
distant or irrelevant. 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
Section 21 of the Act, 1948. If the grounds
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 grounds are
adequate or not is not a matter which would
be gone into by the High Court for the
sufficiency of the grounds which induced
the assessing authority to act is not a
justiciable
issue.
The
question
as
1002 INDIAN LAW REPORTS ALLAHABAD SERIES
to whether that material in sufficient for
making assessment or re-assessment under
section 21 of the Act would be gone into
after notice is issued to the dealer and he
has been heard in the matter or given an
opportunity for that purpose. The assessing
authority would then decide the matter in
the light of material already in its
possession as well as fresh material
procured as a result of the enquiry which
may be considered necessary.

18. Facts of the present cases as briefly
noted above leaves no manner of doubt that
the Assessing Authority was having relevant
material in his hands on the basis of which
he had reason to believe that for the
Assessment
Years
in
question,
the
petitioners have evaded tax on undisclosed
sales and made huge transactions of
purchases and sales out of the Books of
Account. Therefore, the permission under
the proviso to sub-Section (2) of Section 21
of the Act, 1948 for the Assessment Years in
question have been lawfully granted by the
concerned Additional Commissioner, Trade
Tax and the notices under Section 21(1) of
the Act, 1948 have been lawfully issued by
the concerned Assessing Authorities to the
petitioners for the Assessment Years in
question. Under the circumstances, we do
not find any merit in these writ petitions.

19. For all the reasons aforestated, all
the writ petitions are dismissed.
----------
(2022)04ILR A1002
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 20.04.2022

BEFORE

THE HON'BLE MRS. SANGEETA CHANDRA, J.

Matters Under Article 227 No. 660 of 2022
Munna Lal & Anr. ...Petitioners
Versus
Union of India & Ors. ...Respondents

Counsel for the Petitioners:
Prashant Agarwal

Counsel for the Respondents:
A.S.G., Sanjeev Singh
Shop
lease
expired-Cant
Board
issued
willingness to renew the lease-Principal Director
rejected
the
proposal-no
renewal
instead
auction-Appeal-rejected-Lease expired after 30
years-only question to be considered was for
fresh
grant-Fresh
grant
alone
could
be
considered for a public premise-constructed by
cantonment board on cantonment land -through
public auction.

Petition dismissed. (E-9)

List of Cases cited:

1. Accountant and Secretarial Services (P) Ltd.
Vs U.O.I., 1988 (4) SCC 324

2. Hari Singh Vs Military Estate Officer, 1972 (2)
SCC 239

3. New India Assurance Co. Ltd. Vs Nusli Neville
Wadia & anr., 2008 (3) SCC 279
(Delivered by Hon'ble Mrs. Sangeeta
Chandra, J.)

1. Heard learned counsel for the
petitioner, Sri Varun Pandey, learned
counsel appearing for respondent nos.1 to 4
and Sri Sanjeev Singh, learned counsel
appearing for respondent nos.6 and 7.

2. Since the respondent no.5 is the
Estate Officer i.e. Quasi-Judicial Authority,
whose order has been challenged in this
petition, there is no need to issue notice to
the respondent no.5.
3. This petition has been filed
challenging the judgement and order dated