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2019 (1) TMI 764 - GUJARAT HIGH COURTJurisdiction - Classification of goods - rate of tax - trading of Ammonium Nitrate - initially taxable under Entry 18(1) of Schedule II to the VAT Act which was subsequently deleted and goods were subsequently classified under the residuary Entry - Entry 42A of ScheduleII to the VAT Act - the order of assessment was neither challenged by the petitioner nor was taken in revision by the revisional authority and thus, achieved finality. On 01.02.2018, the Asst. Commissioner of State Tax issued the impugned Notice purportedly in exercise of powers u/s.34(8A) of the VAT Act. Held that:- In terms of subsection (2) of Section 34 of the VAT Act, it is open for the Commissioner, if any of the grounds mentioned therein are present, to serve a notice upon a dealer requiring him to appear on a date and place specified and to produce necessary documents and supporting evidence. Subsection (6) of Section 34 authorizes the Commissioner to complete best judgment assessment in case a dealer does not cooperate with the scrutiny assessment undertaken by the Commissioner. Subsection (7) of Section 34 empowers the Commissioner to impose penalty under certain circumstances - Subsection (8A) of Section 34, which is of importance to us, was inserted by the Gujarat Value Added Tax (Amendment) Act, 9 of 2013 with effect from 01.04.2013. The Statement of Objects and Reasons for introduction of the said provision provided that the same was added “so as to provide to assess the dealers separately in respect of any period for certain transactions or claims not recorded or recorded in an incorrect manner to evade the tax”. The legislative intent, thus, for introduction of the said subsection (8A) clearly is to enable the Revenue to bring to tax certain transactions which are noticed in the course of any of the proceedings under the VAT Act. Such proceedings may be for assessment of the dealer for some other Financial Year or may even be appellate or revisional proceedings. If the proceedings in question relate to appellate or revisional proceedings, the authority would place the issue before the concerned authority with a direction to assess the dealer in respect of such transaction or claim - powers under subsection (8A) of Section 34 of the VAT Act would be available when a certain claim or a transaction has not been subjected to audit assessment under subsection (2) of Section 34 of the VAT Act. The powers under subsection (8A) of Section 34 are not akin to the powers of reassessment u/s.35. Essentially, under subsection (8A) of Section 34, if the authority, in the course of any proceedings, notices any evasion of tax, he can address to such an issue, without carrying out full assessment and if such authority happens to be either the appellate or the revisional authority, the issue would be placed before the assessing authority. Two things, thus, become abundantly clear. Firstly, the powers under subsection (8A) of Section 34 are not similar to the powers of reassessment flowing from Section 35 of the VAT Act and secondly, such powers cannot be exercised when audit assessment has already been completed in case of a dealer with respect to a certain period. Any other view will make the limitation period provided in Section 35(1) of the VAT Act substantially, if not, completely redundant. Notices issued by the competent authority in the later two years u/s.35 of the VAT Act - Held that:- Perusal of the provision of subsection (1) of Section 35 of the VAT Act would demonstrate that unlike in case of Section 147 of the Income Tax Act, 1961, it does not make any distinction between a notice of reassessment within and beyond 04 years. It permits reassessment of turnover that has escaped assessment, whether the escapement is on account of any failure on the part of the assessee to disclose truly and fully all material facts or otherwise. However, the concept of change of opinion would certainly apply. Petition allowed - decided in favor of petitioner.
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