RAVINDRA KUMAR TIWARIversusTHE COMMISSIONER, COMMERCIAL TAX, UP

         HIGH COURT OF JUDICATURE AT ALLAHABAD
                SALES/TRADE TAX REVISION No. - 352 of 2018

Ravindra Kumar Tiwari
                                                              .....Revisionist(s)
                                       Versus

The Commissioner, Commercial Tax, UP
                                                                    .....Opposite

                                                                         Party(s)


Along with :
1.   Sales/trade Tax Revision No. 353 of 2018:
     Ravindra Kumar Tiwari
                                  Versus
     The Commissioner, Commercial Tax, UP

Counsel for Revisionist(s)                            :   Aloke Kumar
Counsel for Opposite Party(s)                         :   C.S.C.

Court No. - 7
                    HON'BLE PIYUSH AGRAWAL, J.

1. Heard learned counsel for the parties.

2. The present revision has been filed against the order dated 30.08.2018
passed by the Commercial Tax Tribunal, Jhansi in Second Appeal No. 80 of
2014 for Assessment Year 2000-01. The present revision was admitted by
this Court vide order dated 05.12.2018 on the following questions of law:

     "(i) Whether any reassessment proceedings could have been drawn up
     against the assessee when, admittedly, there did not exist any material
     that may have resulted in formation of 'reason to believe' as to
     escapement of turnover of sand?

     (ii) Whether, in absence of any fresh material, reassessment could have
     been undertaken on the simple change of opinion arising from the
     facts noted in the original assessment order?"

3. Learned counsel for the revisionist submits that the revisionist was
granted permission for excavating sand in the disputed year and deposited
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                               2


a sum of Rs. 10,88,000/- towards royalty. The assessing authority, while
framing the assessment order dated 01.05.2002, accepted the quantity of
sand sold but disbelieved the selling rate. Proceedings under Section
21(2) were initiated on the basis of some information received that an
amount of Rs. 9,67,587/- was deposited by the revisionist towards royalty
apart from the above-mentioned amount. An ex-parte order dated
16.01.2006 was passed. Subsequently, an application under Section 30
was filed, which was allowed on 31.05.2006, recalling the ex parte order.
On 27.02.2008, again a reassessment order was passed on the basis of the
alleged information, against which an appeal was filed. In appeal, a
specific pleading was made that the record be summoned for verifying the
correctness of the information which necessitated the passing of the
reassessment order. Instead of summoning the record, the matter was
remanded by order dated 11.05.2011.

4. Thereafter, an ex-parte reassessment order was passed on 31.03.2012.
Being aggrieved by the said order, an appeal was filed. Again, a request
was made for summoning the record for verification of the correctness of
the information. The appeal was proceeded with and partly allowed. Still
aggrieved by the order, a second appeal was filed before the Commercial
Court. By the impugned order dated 30.08.2018, the Tribunal dismissed
the appeal. Hence, the present revision.

5. Learned counsel for the revisionist submits that the reassessment
proceedings have been initiated on the alleged ground of information
being received that Rs. 9,67,587/- had been deposited towards royalty,
which has not been disclosed. The said information from day one, was
sought to be called upon for verification, but none of the authorities
summoned the record to verify the same and thereafter passed the order.

6. He further submits that the proceedings under Section 21(2) cannot be
initiated merely on the basis of a change of opinion. He further submits
that no material has been brought on record which necessitated the
initiation of the proceedings. In support of his submission, he relies upon
the Division Bench judgment of this Court in the case of M/s. Vikrant
Tyres Limited versus State of U.P. and others, reported in 2005
U.P.T.C. 501 and the judgment of Hon'ble Apex Court passed in the case
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of State of Uttar Pradesh & others versus M/s. Aryaverth Chawl
Udyog & others, reported in 2017 U.P.T.C. 262.

7. Per contra, learned Standing Counsel supports the impugned order.

8. After hearing the parties, the Court has perused the record.

9. The record shows that the original assessment order was passed,
thereafter, reassessment proceedings were initiated on the alleged ground
that the assessee had deposited royalty of a sum of Rs. 9,67,587/-. The
said fact had been concealed. The revisionist pleaded that the said
information may be verified, but no material has been brought on record
to show as to whether the said information was available on record. This
Court has held that reassessment proceedings cannot be initiated on the
same material.

10. In the case of M/s. Vikrant Tyres Limited (supra), this Court has
held as under:

     "14. Re-assessment on the same material by same authority, if permitted,
     for no valid reason, will open flood gate for arbitrary action exposing one
     to unending process, permitting uncertainty, re-opening of closed
     chapters without assigning good reason, depending upon whims of
     individuals and in the end precipitating anomalous situations."

11. The Division Bench of this Court has held that reassessment on the
same material, if permitted, will open a flood gate for arbitrary action. For
initiation of reassessment proceedings, the authorities have to disclose
fully and truly all material necessary for reassessment. In absence thereof,
the proceedings cannot be permitted.

12. For reassessment proceedings, "reason to believe" means a
satisfaction reached on the basis of facts and material available before the
assessing authority. In case of change of opinion, there must be a nexus
which is required to be established between the change of opinion and the
material present before the assessing authority.

13. The material in existence remained the same during the assessment
proceedings and no additional material or facts have been referred to for
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                                                                   4


                                    explaining such reason to believe. The assessing authority has to record a
                                    reason to believe for initiation of reassessment proceedings.

                                    14. The Apex Court in the case of Aryaverth Chawl (supra) has
                                    categorically held that in the absence of material available, reassessment
                                    proceedings cannot be initiated. In the case in hand, the opinion of the
                                    authorities is that they have brought material to show that the revisionist
                                    had deposited royalty of Rs. 9,67,587/-, apart from the amount of Rs.
                                    10,88,000/- disclosed during the original assessment proceedings. The
                                    record shows that no such information was available on record, but still
                                    the reassessment proceedings were initiated against the revisionist, which
                                    cannot be justified.

                                    15. In view of the above, the impugned order cannot sustain and is hereby
                                    quashed.

                                    16. The present revision is allowed. Questions of law are answered
                                    accordingly.



                                                                                          (Piyush Agrawal,J.)
                                    September 21, 2026
                                    Abhishek Gupta




Digitally signed by :-
ABHISHEK GUPTA
High Court of Judicature at Allahabad