1985 (7) TMI 340 - HC - VAT and Sales Tax

Summary

Issues:
1. Reopening of assessment under section 19(1) of the M.P. General Sales Tax Act, 1958 after the first appeal.
2. Competency to reopen assessment under section 19(1) of the State Act after final orders in first and second appeals.
3. Interpretation of provisions of section 38(6) of the M.P. General Sales Tax Act in relation to reassessment under Central Sales Tax Act, 1956.

Issue 1: Reopening of assessment under section 19(1) of the M.P. General Sales Tax Act, 1958 after the first appeal:
The case involved the assessee, a cotton bales dealer, who was assessed to sales tax under the Central Sales Tax Act for the Diwali year 1967-68. Disputes arose regarding the taxation of packing materials separately. The assessing authority reopened the case under section 19(1) of the State Act to reassess the tax rate on certain items. The Tribunal upheld the assessee's contention that the assessment could not be reopened after the first appeal. However, the High Court, relying on previous decisions, held in favor of the department, stating that reassessment under section 19(1) is permissible even if the issue was not raised in the first appeal.

Issue 2: Competency to reopen assessment under section 19(1) of the State Act after final orders in first and second appeals:
In another case, the assessing authority reopened the assessment under section 19(1) of the M.P. General Sales Tax Act, 1958 after the second appeal, concerning the tax rate on iron hoops. The Tribunal ruled in favor of the assessee, stating that the order passed in the second appeal was final and could not be reopened. However, the High Court disagreed, emphasizing that if the conditions under section 19(1) are met, the assessing authority has the jurisdiction to reassess, even if the issue was not present before the Tribunal in the second appeal.

Issue 3: Interpretation of provisions of section 38(6) of the M.P. General Sales Tax Act in relation to reassessment under Central Sales Tax Act, 1956:
The Tribunal and the High Court deliberated on the interpretation of section 38(6) of the M.P. General Sales Tax Act in the context of reassessment under the Central Sales Tax Act, 1956. The Tribunal believed that the finality of the order passed in the second appeal prevented the assessing authority from reopening the assessment. However, the High Court clarified that under the provisions of the Central Sales Tax Act read with section 19(1) of the State Act, reassessment is permissible if the conditions stipulated in section 19(1) exist, regardless of the finality of the order in the second appeal.

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