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2019 (8) TMI 909 - HC - VAT and Sales TaxReopening of assessment - time limitation - DVAT Act - limitation on assessment and re-assessment - Section 34 of the DVAT Act - Default assessment of tax and penalty and interest - HELD THAT:- In the present case, the reopening of the assessment is sought to be done beyond the period of 4 years and before the expiry of 6 years of the assessment period. The jurisdictional requirement for invoking the extended period of 6 years is that the Commissioner should note the reasons to believe that the tax was not paid and that the failure to pay such tax should be on account of ‘concealment, omission or failure’ by the Assessee to disclose ‘full material particulars’. The notings on file in the present case reveal that the trigger for the reopening of the assessment was the report of the DGCEI according to which Amit Gupta, Director of Progressive Alloys India Pvt. Ltd., along with associated registered dealers viz., M/s. Forward Minerals and Metals Pvt. Ltd., M/s. Unnati Alloys Pvt. Ltd., M/s. Moral Alloys Pvt. Ltd. and M/s. Brilliant Metals Pvt. Ltd. were passing on inadmissible CENVAT credit on the ‘cenvatable invoice’ without physical delivery of goods. The report observed that the period for which the exercise was carried out by the DGCEI pertained to Financial Years 2011-12 and 2012-13 and that this period had become time barred. It was then noted that since the DGCEI had raised serious doubts over the working of the Assessee firm the ‘possibility of evasion of tax by the firm cannot be ruled out.’ The twin requirements of (i) the Commissioner having to form the requisite ‘reason to believe’, and (ii) for such reasons to have a live nexus with the failure to pay tax as a result of the Assessee’s concealment, omission or failure to disclose material particulars, is not fulfilled in the present case. It is trite that ‘reason to believe’ is different from ‘reason to suspect’ - The statutory requirement is that there must be reason to believe that there has been some omission, concealment or failure by the Assessee to disclose full material particulars. There is nothing in the file noting, much less in the notice dated 29th October, 2017, which suggests that the Commissioner had arrived at a subjective satisfaction that tax was not paid on account of the Petitioners ‘concealment, omission or failure to disclose full material particulars.’ Admittedly, in the present case in the reassessment proceedings the Respondent has sought to make no distinction between the liability under the DVAT and that under the CST Act. In terms of Section 5 of the DVAT Act these two could not be combined. There is no question of treating this as a mere ‘technical problem’ and permitting the Respondents to repeat the exercise by proceeding against the Petitioner separately. Apart from the facts that this is not merely a ‘technical problem’, such exercise would be clearly time barred at this stage - the Court holds that the reopening of the assessment in the present case by the Respondent by invoking the extended period of 6 years in terms of the proviso to Section 34 (1)(a) of the DVAT Act was bad in law. Impugned assessment order set aside - petition allowed.
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