Reassessment under tax law requires fresh evidence and cannot be initiated solely based on a change of opinion or subsequent legal circular.

1. These appeals are directed against the common judgment and order passed by the High Court of Judicature at Allahabad, Bench at Lucknow in Aryaverth Chawal Udyog v. State of U.P., 2008 (6) All LJ 338 : 2008 SCC Online All 579 dated 22-5-2008, whereby and whereunder, the High Court, while upholding the legality of Circular No. 137, dated 29-3-2007/30-3-2007 issued by the Commissioner of Trade Tax, has quashed the reassessment proceedings initiated under S.21 of the U.P. Trade Tax Act, 1948 (for short "the Act").

2. Since these appeals arise out of a common judgment and order of the High Court and factual matrix in all the appeals is also identical, while disposing of these appeals by this common judgment and order, we would only notice facts in the lead matter, Civil Appeal No. 6714 of 2009, in respect of respondent assessee, M/s Aryaverth Udyog, Gauhanna, Akbarpur, District Ambedkar Nagar, Uttar Pradesh.

3. Briefly stated, the facts in the lead case are: the relevant assessment year involved in this appeal is 2001-2002. The respondent assessee is a registered dealer under the Act and the Central Sales Tax Act, 1956 (for short "the 1956 Act"). It is engaged in the business of manufacture of rice from paddy in the State of Uttar Pradesh. The assessee consumes paddy purchased within the State of Uttar Pradesh to manufacture rice at their rice mills and sells the rice so manufactured within the State and outside in course of inter - State trade under the 1956 Act.

4. Under S.14 of the 1956 Act, rice and paddy are "declared goods" as goods of special importance. The said goods are liable to be taxed at the point of first purchase under the notification issued under S.3 - D(i) of the Act. During the relevant assessment year, the assessee has purchased paddy within the State of Uttar Pradesh and paid purchase tax @ 2%.

5. S.15(c) of the 1956 Act, provides for restrictions and conditions in regard to tax on sale or purchase of declared goods within a State. Under S.8 of the 1956 Act, the tax liability of a registered dealer is 4% on the inter - State sales of rice. The assessee claimed set - off under S.15(c) of the 1956 Act, in respect of purchase tax already paid on the purchase of paddy within the State of Uttar Pradesh against the tax liability created under the 1956 Act. The assessing authority allowed the aforesaid claim and deducted the tax deposited on the purchase of paddy within the State of Uttar Pradesh from the total tax liability of the assessee, by assessment order dated 31-12-2003.

6. Thereafter, the Commissioner of Trade Tax, Uttar Pradesh, Lucknow has issued Circular No. 137 [Vidhi. 2(i) - Nyay - 2006-07 of 2313] dated 29-3-2007 - 30-3-2007 (for short "the Circular") and clarified the position of law under S.15(c) of the 1956 Act, to the effect that the said provision does not contemplate set - off of tax liability on paddy purchased within the State of Uttar Pradesh with the tax liability on the inter - State sale of rice. Further, that no deduction in respect of tax deposited by the assessee on the purchase of paddy within the State of Uttar Pradesh from tax liability on the sale of rice under the 1956 Act, manufactured from such paddy is permissible and directed that the aforesaid assessment orders be revived in consonance with the instructions under the circular.

7. In the light of the aforesaid, since the period of limitation for initiation of proceedings under S.21(1) of the Act had lapsed, the assessing authority forwarded a proposal for obtaining legal sanction of the Additional Commissioner of Trade Tax to reopen the assessment u