- (1.) BY means of the present writ petition the petitioner, a propri etorship firm carrying on the business of purchase and sale of foodgrains, has sought quashing of notice issued under Section 21 (1) of U. P. Trade Tax Act by the respondent No. 1, Trade Tax Officer, Sector 11, Agra dated 9-5-2002. The facts of the case in brief are as follows:
(2.) THE petitioner is a registered dealer under U. P. Trade Tax Act and is carry ing on the business of foodgrains who claimed certain exemption of tax paid Arhar amounting to Rs. 12,51,750 on the basis of Form III-C (2) issued by the selling dealer, namely, M/s. P. Kishan Chandra and Company, Agra. Similarly it claimed exemption on the purchases made from M/s. Puran Chandra and Broth ers and others amounting to Rs. 4,80,000 against Form III-C (2 ). In all the peti tioner claimed exemption of tax paid on foodgrains amounting to Rs. 48,85,000/- against eight Forms III-C (2 ). THE Assessing Officer on the basis of these forms granted exemption from payment of tax to the petitioner, while framing the as sessment order for the relevant assessment year 1998-99 with the rider that the said exemption shall remain in operation till the verification of these forms. Sub sequently, on verification it transpired that the petitioner claimed exemption from trade tax on the basis of these forms to a much higher figure than the sales disclosed by the selling dealers. A notice under Section 21 (2) of the Act was issued by the Additional Commissioner (Grade-1) Trade Tax, Agra Zone, Agra before granting sanction to reopening of the assessment proceedings against the petitioner, on the allegations that the selling dealer, namely, M/s P. Kishan Chandra and Company had made sales to the extent of Rs. 1,51,750 instead of Rs. 12,51,750. Similarly, M/s. Puran Chandra and Company, the another selling dealer had made sales worth Rs. 1,15,000, but the petitioner had got exemption on Rs. 3,32,000. !n addition to above, M/s. Sanjay Dal Mill, the other selling dealer, from whom the purchases worth Rs. 48,63,000 were disclosed and ex emption on the basis of Form III-C (2) was obtained on worth Rs. 48,63,000, was a non-existent one. A reply was submitted by the petitioner which was found inadequate and the Additional Commissioner (Grade-1) by the order dated 12-3-2002 granted sanction to the Assessing Officer to reopen the assessment on the ground that the turnover of the petitioner dealer has escaped assessment. In pursuance to the permission granted by the Additional Commissioner, the im pugned notice was issued by the Trade Tax Officer, Sector-11, Agra vide Annex-ure-7 to the writ petition calling upon the petitioner to appear before him along with the account books on the date fixed. THE said notice is under challenge in the writ petition. Sri Rakesh Ranjan Agrawal, learned Counsel for the petitioner submits that very initiation of the proceedings under Section 21 (2) of the Act is bad inasmuch as the petitioner made the purchases from the afore stated firm who gave it forms III-C (2) which are prima facie genuine documents and were issued by the Trade Tax department to the concerned dealers (selling dearler ). Reliance was placed upon a decision of the Apex Court in Chunni Lal Parshadi Lal v. C. S. T. , 1986 (62) STC 112 as also on Star Paper Mills Ltd. Saharanpur v. CST 2004 UPTC 317. The crux of the argument is that the petitioner has made pur chases from the registered dealers and the forms handed over by them were produced in the assessment proceedings and the genuineness of those forms were not doubted by the Assessing Officer and as such, no case for reopening of the assessment under Section 21 of the Act has been made out. The initiation of the proceedings under Section 21 of the Act is thus wholly arbitrary, submits the learned Counsel for the petitioner. The learned Counsel for the department, on the other hand, submits that at this stage the department is in possession of sufficient material to form the belief that the turnover of the petitioner dealer has escaped assessment. The question as to whether there was collusion between the selling dealer and the petitioner shall be gone into by the Assessing Authority in the reassessment proceedings. The submission is that this Court has limited jurisdiction to examine as to whether the initiation of the proceedings for reassessment is justified in law or not. In other words, he submits that the question of sufficiency of material cannot be gone into at this stage.
(3.) CONSIDERED the respective submissions of the learned Counsel for the parties. A bare perusal of Section 21 (1) of the Act would show that if the Assessing Authority has reason to believe that the whole or any part of the turnover had escaped assessment of tax or was under-assessed or was assessed at a lower rate of tax or any deduction or exemption has been wrongly allowed, the Assess ing Authority may, after issuing notice to the dealer, make reassessment.;