Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2014 (8) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (8) TMI 922 - HC - VAT and Sales TaxReopening of assessment - UPTT - why reassessment proceedings under Section 21 of the Act should not be reopened on the ground that enzymes was not a chemical since it only acts as a catalyst and, therefore, is taxable at the rate of 10% as an unclassified item - Held that:- There has been no discussion in the original assessment order as to whether enzyme is a chemical or not. In the absence of any finding being given by the Assessing Officer on this aspect, the issue as to whether enzyme is a chemical or not has not been determined. When there is an application of mind and an opinion is formed, in that case reopening the assessment proceedings could be held to be illegal as it would amount to a change of opinion but, in the instant case, we find that there has been no determination as to whether enzyme is a chemical or not. No finding has been given by the Assessing Officer. Consequently, no opinion has been formed. In the absence of determination of a vital issue as to whether enzyme is a chemical or not, the competent authority was justified in granting permission to the Assessing Officer to reopen the assessment. The word "reasons to believe" would mean cause or justification. The Assessing Officer was justified in forming an opinion that there has been an under assessment. The expression "reason to believe" cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. The same principle applies to the competent authority while granting permission. Only a limited reason is required to be given by the competent authority while granting permission to reopen the assessment. The Court finds that there was sufficient application of mind in coming to a conclusion that it was a case of under assessment and that a finding is required to be given as to whether enzyme is a chemical or not. reassessment proceedings can only take place when there is an assessment order and there is reason to believe that there has been a case of under assessment or escaped assessment. In the event, there is no assessment order there can be no reassessment proceedings. Consequently, initiation of proceedings under Section 21 of the Act when there is no assessment order is a clear case of non application of mind. Consequently, the order of the competent authority granting permission to reopen the assessment proceedings under Section 21 (2) of the Act as well as the consequential notice issued by the Assessing Officer under Section 21 of the Act for the assessment year 2006-07 under U.P. Trade Tax Act was wholly illegal and is quashed - Decided in favour of assessee.
|