Judgment

KHANNA, J. :- This appeal by special leave by the Commissioner of Sales Tax Uttar Pradesh is directed against the judgment of Allahabad High Court whereby it answered the following two questions referred to it under S. 11 of U. P. Sales Tax Act (hereinafter referred to as the Act) in the negative:

"(I) Whether the assessing officer under these circumstances could be said to have had an honest belief that the turnover had partially escaped taxation so as to start proceedings under Section 21?

(II) Whether the aforesaid two preliminary notices asking for the production of accounts can be taken to be notices under Sec. 21 for the starting of the proceedings so as to warrant passing of the assessment within one year of the service thereof?"

2. The matter relates to the assessment year 1957-58. The respondent assessee, Bhagwan Industries (P) Ltd., carries on the business of selling atta, maida and sooji. Its business comprises various units including Venkateshwar Flour Mills, Lucknow. It was assessed on December 26, 1958 for the purpose of sales tax for the year 1957-58 under rule 41 (5) of the U. P. Sales Tax Rules. The estimated turnover was determined to be Rs. 46,00,000, out of