TMI Blog2014 (1) TMI 1380X X X X Extracts X X X X X X X X Extracts X X X X ..... falls for consideration at this stage. The point to be noted, as is reflected in the original order of the assessment dated 5 January 2007, is that for the year in question the petitioner reflected total purchases of only ₹ 1.22 lacs and sales of ₹ 54,114/-. On this material, it cannot be held that the formation of belief was extraneous or that the grounds which weighed with the third respondent have no nexus with the formation of belief. Section 12-A of the Trade Tax Act provides that in any assessment proceedings, when any fact is specially within the knowledge of the assessee, the burden of proving that fact shall lie upon him, and in particular, the burden of proving the existence of circumstances bringing the case withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gular assessment for 2004-05 was completed on the basis that the petitioner had effected sales in the total sum of ₹ 54,114/- and purchases of ₹ 1,22,512/-. The third respondent, while granting approval under the proviso to Section 21(2), recorded that during the search conducted in the premises of M/s. Parmarth Iron Pvt. Ltd., Bijnor, electronic records maintained by the aforesaid company indicated that the petitioner had engaged in transactions of sales and purchase with the aforesaid company to the extent of ₹ 4.31 crores during the year 2004-05. On 17 March 2011 a notice was issued to the petitioner in response to which the petitioner submitted that it had no dealing of purchase and sale with M/s. Parmarth Iron Pvt. Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and hence in any view of the matter no liability of tax can be fastened on the petitioner. Hence, it has been submitted that there could be 'no reason to believe', within the meaning of the proviso to Section 21(1) of the Trade Tax Act, that any part of the turnover of the petitioner as a dealer had escaped assessment to tax or that it had been under assessed. Moreover, it has been submitted that though a Division Bench of this Court had dismissed petitions filed by M/s. Parmarth Steel and Alloys Pvt. Ltd. and M/s. Parmarth Iron Pvt. Ltd. (Writ Tax Nos.874 and 875 of 2010 on 8 May 2013) but that should not come in the way of the petitioner inasmuch as the reopening of the assessment in the case of those two parties was on the basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of Section 21 of the U.P. Sales Tax Act, 1948 in The Commissioner of Sales Tax, U.P. Vs. Bhagwan Industries (P) Ltd., Lucknow reported in AIR 1973 SC 370. The observations of the Supreme Court are:- ............ 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 assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut it should show application of mind. In the present case the third respondent while authorising a reopening of the reassessment for the year 2004-05 has furnished a tangible basis upon which the formation of belief has been founded. The search which was conducted upon M/s. Parmarth Iron Pvt. Ltd., Bijnor resulting in recovery of data maintained in the electronic form indicated transactions of a value of ₹ 4.31 crores with the petitioner for the year 2004-05. The petitioner has undoubtedly disputed having had any transaction with the aforesaid party but this is not the matter which falls for consideration at this stage. The point to be noted, as is reflected in the original order of the assessment dated 5 January 2007, is that fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of reassessment for the year 2004-05 or the assessment for the years 2005-06 and 2006-07. All that needs to be determined at this stage is as to whether there was 'reason to believe' within the meaning of Section 21 and for the reasons which we have arrived at, we hold that the requirement of Section 21 was satisfied. Accordingly, the notice issued for 2005-06 and 2006-07 and the notice for a regular assessment are also in accordance with law. The mere fact that on 12 May 2011, a Division Bench of this Court in another petition (M/s. Shiv Shakti Stores Vs. State of U.P. ors, Writ Tax No.674 of 2011) had, while granting time to file a counter, directed that until the next date of listing, the assessment proceedings under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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