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TMI Blog2009 (7) TMI 1170X X X X Extracts X X X X X X X X Extracts X X X X ..... etitions are one and the same, they are taken up together for disposal by this common order. The background facts of the case in a nutshell essentially are as follows: The petitioner is a firm registered under the U.P. Trade Tax Act, 1948 (hereinafter referred to as, "the Act") since 1994. Raj Kumar Agarwal is the proprietor of the firm and was carrying on the business of manufacture and sale of cloth after purchasing the cotton, yarn and weaving the same from the open market. The cloth was exempted from payment of tax. For the assessment year in question the petitioner filed trading account before the authority concerned and disclosed the sale of cloth and claimed exemption. The assessing authority, Hapur, passed the orders under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that his nephew, who was present, at the time of survey dated January 25, 2005, in fact, gave the information to the survey officer in regard to the closure of another unit, M/s. Nirmal International which was in the partnership of his brother late Kailash Chandra Agarwal, and was closed on October 30, 1998. After the closure of the unit (M/s. Nirmal International) the machine were also sold out by late Kailash Chandra Agarwal. It was further submitted that the petitioner had no connection with the business of Sri Kailash Chandra Agarwal. Abhishekh Agarwal did not have any knowledge of the business of the petitioner as he was doing service outside the State of Uttar Pradesh. The petitioner appended the affidavit of Abhishekh Agarwal and als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the petitioner and Sri Avinash Chandra Tripathi, learned Standing Counsel appearing on behalf of the respondents. The original record pertaining to the case containing SIB report and survey report dated January 25, 2000 was also placed before this court. It is not disputed that the survey of business premises of the petitioner was made on January 25, 2005 and statement of the nephew of the petitioner was recorded and no stock of cloth or machinery was found in the premises of the petitioner. The defence of the petitioner is that the statement made by Abhishekh Agarwal was in respect of the firm M/s. Nirmal International which was closed in the year 1999 and not pertaining to the firm owned by the petitioner. The story of the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut had not verified the sale of the machinery. The apex court in the case of Commissioner of Sales Tax, U.P. v. Bhagwan Industries (P.) Ltd. [1973] 31 STC 293; AIR 1973 SC 370 has observed as follows (at page 299 of STC): "9. The controversy between the parties has centered on the point as to 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a 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." Thus the apex court in the aforesaid case has clearly held that what can be challenged, is the existence of the belief and not the sufficiency of reasons for the belief. A bare perusal of the record shows that it cannot be said th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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