2008 (5) TMI 621 - ALLAHABAD HIGH COURT

Reassessment proceedings and orders passed under section 21 of the Act - Held that:- Section 15(c) of the Central Act provides reduction of tax leviable on the turnover of rice under the U.P. Trade Tax Act with the tax levied on the paddy out of which such rice was procured. It does not provide any reduction of tax under the Central Act by the tax paid on paddy under the State law out of which such rice was procured.

The proceedings under section 21 of the Act have been initiated without any material on the basis of which belief could be formed that there was escaped assessment, namely, that the tax levied on the interState sales of rice under the Central Act has been wrongly reduced by the tax levied on paddy under the U.P. Trade Tax Act out of which such rice was procured except on account of change of opinion.

The initiation of proceedings under section 21(1) of the Act on account of change of opinion are not permissible and, therefore, the initiation of proceedings under section 21 of the Act in the cases of the petitioners are bad in law.