TMI Blog2010 (4) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... with consequential benefit. However, liberty is given to the respondents to proceed afresh and pass a fresh order after giving due opportunity of hearing to the parties. W.P. allowed. - - - - - Dated:- 6-4-2010 - DEVI PRASAD SINGH AND CHAURASIA S.C. , JJ. Heard Shri Pradeep Agrawal, learned counsel for the petitioner and Shri H.P. Srivastava learned Additional Chief Standing Counsel. The petitioner, a registered dealer under the U.P. Trade Tax Act, 1948, is a Government organization having branches all over the State. The main object of the petitioner is to make purchase of wheat, paddy and foodgrain under the prices support scheme. The petitioner also provides fertilizers and seeds to the farmers at subsidised rates. The petitioner also engaged in import business of coal from outside the State of U.P. and supply to the brick kiln owners. The controversy relates to the assessment year 2003-04. The Food and Civil Supplies Department of State of U.P. under the prices support scheme announced the policy of purchase of paddy under the scheme. It was also provided that the paddy purchased by the petitioner under the prices support scheme can be supplied to the rice miller ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... While assailing the impugned order learned counsel for the petitioner had raised two-fold arguments. Firstly, no tax could be imposed on the petitioner since, the rice bran and rice polish and kinkee were not taken back from the millers in terms of the agreement. The second fold submission of the petitioner's counsel is that all these aspects of the matter have been considered by the assessing authority while assessing the tax and no defects were found. The power conferred by sub-section (2) of section 21 cannot be used on the same facts and circumstances, to reopen the assessment. For convenience relevant portion of section 21 of the Uttar Pradesh Trade Tax Act, 1948 is reproduced as under: 21. Assessment of tax on the turnover not assessed during the year. (1) If the assessing authority has reason to believe that the whole or any part of the turnover of dealer, for any assessment year or part thereof, has escaped assessment to tax or has been under-assessed or has been assessed to tax at the rate lower than that at which it is assessable under this Act, or any deductions or exemptions have been wrongly allowed in respect thereof, the assessing authority may, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mposed two-fold duty while invoking the provision contained in sub-section (1) of section 21 of the Act. The first is, there must be some reason to believe that the assessing authority had committed fault on the ground enumerates in terms of sub-section (1) and secondly, the enquiry should be held by the assessing authority. It is settled law that while interpreting the statutory provisions contained in an Act or statute, any one should not be read in isolation but it should be read in reference to context. According to Maxwell, a construction which would leave without effect any part of the language of a statute will normally be rejected. The honourable Supreme Court by catena of judgment held that while interpreting any section of a statute, every word and provision should be looked into in context to which it is used and not in isolation vide Grasim Industries Limited v. Collector of Customs [2002] 128 STC 349 (SC); [2002] 4 SCC 297, Easland Combines v. Commissioner of Central Excise [2003] 1 SCC 410, A.N. Roy v. Suresh Sham Singh [2006] 5 SCC 745 and Deewan Singh v. Rajendra Pd. Ardevi [2007] 10 SCC 528. The honourable Supreme Court while considering the principles regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been under-assessed by reason of failure to disclose fully and truly the facts material for assessment, the existence of the belief and the reasons for the belief, but not the sufficiency of the reasons, will be justiciable. The expression therefore predicates that the Income-tax Officer holds the belief induced by the existence of reasons for holding such belief. It contemplates existence of reasons on which the belief is founded, and not merely a belief in the existence of reasons inducing the belief; in other words, the Income-tax Officer must on information at his disposal believe that income has been under-assessed by reason of failure fully and truly to disclose all material facts necessary for assessment. Such a belief, be it said, may not be based on mere suspicion: it must be founded upon information. In the case of Smt. Kesar Devi v. Union of India reported in [2003] 7 SCC 427 the honourable Supreme Court in a case of Aslam Mohammad Merchant v. Competent Authority reported in [2008] 3 CRI LJ 3621; [2008] 14 SCC 186, had reiterated the aforesaid principle of law as under: 28. Both the statutory elements, namely, 'reason to believe' and 'recording o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is bad in law or the petitioner is liable to pay tax on the rice bran, rice polish and kinkee. At least prima facie finding should have been recorded by the Additional Commissioner to indicate that how and in what manner the petitioner is liable to pay tax under the escaped liability. The reply submitted by the petitioner should have been considered by the Additional Commissioner and reason should have been assigned as to why the ground enumerated in the reply submitted by the petitioner (annexure 6) is not correct or it is not believable. Article 14 is the pulse beat of the Constitution. Even if, the statute does not provide it shall always be obligatory on the part of administration or quasi-judicial authority to assign reason while affecting civil right of a person or party. The provision contained in section 21 of the Trade Tax Act abundantly makes it clears that while exercising power conferred by sub-section (1) of section 21, the competent authority had to assign reason and discuss the material on record which makes out a case of escaped assessment to tax. In view of the above, the impugned order does not seems to survive and writ petition deserves to be allowed. Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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