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2015 (8) TMI 1185 - HC - VAT and Sales TaxRe-assessment of turnover escaping assessment – Production as per SIB standards – Books of accounts of petitioner were duly audited and assessment order was passed –Thereafter, AO seek permission of Additional Commissioner under Section 21(2) of U.P. Trade Tax Act to make reassessment on reason of report received from SIB authorities after assessment order, which was permitted and subsequent notices were issued to petitioner – Held that:- As per section 21 reassessment proceedings can be initiated only on basis of material on which belief can be formed that some turnover has escaped assessment – Apparently clear that words "reason to believe" in Section 21 conveys that there must be some rational basis for assessing authority to form belief that whole or any part of turnover of dealer has for any reasons escaped assessment – Sole ground for forming reason to believe is that as per settled norms production should be 94%, whereas petitioner has indicated lesser production –This belief of assessing authority is patently perverse and against figures shown in assessment order and/or balance sheet – Balance sheet indicates that out of total brass scrap, finished goods have been produced and that there was only melting loss of approximately 4% that is to say, there was production of 96% – Standards indicated in confidential report of SIB authorities that there should be production figure of 94% – Very basis for making ground for reassessment and for having reason to believe that some turnover had escaped assessment is lacking – Consequently, impugned notice quashed – Decided in favour of petitioner.
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