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2017 (9) TMI 326 - HC - VAT and Sales TaxClassification of goods - leaf springs - whether leaf springs are classifiable under Schedule-II Part-IV of the M.P. VAT Act liable to tax @12.5% or as iron and steel under Entry 30 (v) of Part II of Schedule II? - jurisdiction of the authority to reassess merely on the basis of change of opinion - sub-section (3) of Section 21 of M.P. VAT Act - obligation on the part of Assessing Authority to pass an order within one year from the date of initiation of proceedings - Held that: - in view of the provisions of sub-section (3) of Section 21 of M.P. VAT Act, it can be said that impugned order of re-assessment does not get invalidated even if it is passed beyond the period of one year from the date of initiation of proceedings with the issuance of show cause notice - contention made on behalf of the petitioner that it was beyond jurisdiction of the Assessing Authority to have passed the order of re-assessment after expiry of one year from the date of issuance of show cause notice is answered in the negative. Whether the change of opinion can be the basis for re-assessment? - Held that: - the law is settled that mere change of opinion in absence of any other material will not be sufficient for reassessment - re-assessment of tax is permissible only when it has been under assessed or has escaped assessment, or has been assessed at a lower rate, or any wrong deduction has been made while making the assessment or a rebate of input tax has incorrectly been allowed, while making the assessment or is rendered erroneous and prejudicial to the interest of revenue. Consequent to or in the light of any judgment or order of any Court or Appellate Board, which has become final. Thus, except these circumstances no other grounds available for the Commissioner to reassess the tax - in the present case, it was only on the basis of opinion formulated by order dated 5.6.2007 the Commissioner has re-assessed the tax of the period 2006-07 which cannot be upheld. Therefore, the demand raised for additional sum being the difference i.e. 8.5% amounting to ₹ 47754454/- is set aside. Consequently the demand carried for said amount is also quashed. Sub section (3) stipulates that any order passed by the Commissioner under sub-section (1) and (2) shall have a prospective effect and shall be binding on the authorities referred to in Section 3 in all proceedings under this Act except appeals - the order passed on 5.6.2007 was applicable for next financial year i.e. 2007-2008 and not 2006- 2007 - For this reason also the impugned order cannot be upheld. Petition allowed - decided in favor of petitioner.
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