JUDGMENT M. Katju, J.
1. This writ petition has been filed praying for quashing of the impugned notice dated 28.11.1987 under Section 21 of the U.P. Sales Tax Act for the assessment year 1983-84.
2. Heard learned counsel for the parties.
3. The petitioner no. 1 is a registered partnership firm of which the petitioner no. 2 is one of the partners. It is alleged in para 2 of the petition that the petitioners are carrying on the business of manufacture and sale of Menthol and Dementholised oil. It is alleged in para 4 that the Sales Tax Department has always been treating the Dementholised oil as oil of all kinds and has been taxing it as such. For assessment year 1983-84 the petitioner filed returns for the sale of Dementholised oil in U.P. amounting to Rs. 37,730/- which was accepted by the Additional Sales Tax Officer and taxed at the rate of 4%. In earlier years also the sales of Dementholised oil has been taxed at the rate of 4% under the entry 'oil of all 'kinds'
4. In paras 10 and 11 of the writ petition it is stated that from 1.3.1979 Mentha oil was taxable at the point of first purchase at the rate of 10%. It is alleged in para 17 of the petition that on 28.11.1987 a notice was issued by the Additional Sales Tax Officer, Bareilly stating that the petitioner has deposited sales tax on sale of Dementholised oil only at 4% whereas it was payable at 10%. True copy of the notice dated 28.11 1987 is Annexure-2 to the petition.
5. In that notice the petitioner was asked to show cause why reassessment be not done under Section 21. It is alleged that the aforesaid notice was issued consequent to the circular of the Commissioner of Sales Tax, U.P. that Dementholised oil and Mentha oil are one and the same commodity vide circular dated 12.4.1983 (vide Annexure-3 to the petition). It is alleged that the aforesaid circular dated 12.4.1983 is illegal.
6. In para 25 of the petition it is alleged that the aforesaid notice under Section 21 has been issued mechanically without looking into the facts at all. In para 26 it is alleged that there was no reasonable belief in the S.T.O., Bareilly that any turnover of the petitioner has escaped assessment to tax.
7. In para 29 of the writ petition it is alleged that Mentha oil is the raw material for the manufacture of Menthol. In para 33 the difference between the Dementholised oil and Mentha oil has been stated.
8. A counter affidavit has been filed and we have perused the same.
9. In paras 5 and 6 of the counter affidavit it is stated that in the year 1978-79 and 1979-80 Dementholised oil was subjected to tax at 4% in view of the decision of the High Court.
10. In para 7 of the same it is stated that there is no difference between Mentha oil and Dementholised oil. Mentha oil was subjected to tax for the first time at 4% from 1.3.1979 to 31.8.1979. From 1.9.1979 the was increased to 10% vide notification dated 31.8.1979.
11. Since there is no difference between Mentha oil and Dementholised oil the Dementholised oil was also taxed at 10%.
12. In para 10 of the counter affidavit it is stated that the Government has made a final decision vide G.O. dated 6.12.1986, copy of which is Annexure-CA 1, and in view of this order from 12.4.1983 tax on Dementholised oil is to be levied at 10%.
13. In para 11 of the counter affidavit it is stated that as regards the decision of the High Court referred to in paras 15 and 16 of the writ petition the entry at that time stood as follows:
15. The other notification regarding taxability of Mentha oil was issued with effect from 1.3.1979. Hence the aforesaid notification does not cover Mentha oil which has been separately notified as Mentha oil, and Dementholised has been treated as the same commodity under the aforesaid GO. The said notification does not cover Dementholised oil as well with effect from 1.3.1979. Hence Dementholised oil is no more liable to be taxed under the entry "oils of all kinds" with effect from 1.3.1979 but is taxable at 10% at first purchase in the same way as Mentha oil.
16. On the facts of the case we find no merit in this petition. It is mentioned that for the first time a payable entry of tax for Mentha oil was notified vide notification no. 1770 dated 28.2.1979. This notification was superseded by notification no. 8225 dated 31.8.19/9, and notification no 5787 dated 7.9.1981 providing for sales tax at 10% on first purchase of Mentha oil. The relevant notification for the assessment year in question i.e. A.Y. 1983-84 is the notification no. 5787 dated 7.9.1981.
17. A bare perusal of the assessment order for A.Y. 1983-84 (vide Annexure-4 to the petition) shows that the Assessing Authority has not noticed while passing the assessment order the notification no. 5787 dated 7.9.1981 which provides for sales tax at 10%. Hence it is prima facie evident that turnover was assessed to tax at a rate lower than at which it was assessable. Hence in our opinion the notice under Section 21 was valid. In this connection a division Bench of this Court in Ms Shyam Babu Vaishya and Company v. Assistant Commissioner of Trade Tax, 2004 U.P.T.C. 210 has held that action can be taken for reassessment on the basis of material already on record at the time of original assessment if escapement of assessment to tax was due to concealment by the assessee or negligence and ignorance on the part of the Assessing Officer.
18. In the aforesaid decision this Court held (vide para 20) that the scope of Section 21 of the U.P. Trade Tax is wider than that of Section 147 of the Income Tax Act.
19. In the present case we are of the opinion that prima facie there was negligence and ignorance on the part of the Assessing Officer as he assessed the sales tax at 4% instead of 10%. Hence notice under Section 21 cannot be held to be invalid.
20. Petition is dismissed. Interim order is vacated.