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2019 (12) TMI 804 - HC - VAT and Sales TaxRe-assessment - Authorization granted by respondent no.2 under Section 29(7) of the Value Added Tax Act, 2008 - business of construction of road and bridges - Petitioner had opted for Composition Scheme as announced by State Government for Civil Contractors for assessment year 2007-08, 2008-09 and 2009-10 - HELD THAT:- The action of respondent no.2 proceeding to grant authorisation for re-assessment for including capital goods for value of work contract purchased from outside the State along with raw material to the quantum of turnover of Compounding Scheme for the year under consideration is highly unjustified, as the assessee had already been taxed @ 2% for work done as the goods used in execution of work contract, was to the extent of 5% of the total contract money - Apart from that total contract money under consideration for assessment year 2010-11 of the composition scheme was only ₹ 1,80,71,92,729/- and petitioner-assessee having imported goods valuing ₹ 3,36,13,446/- which is less than 5% of total contract money, therefore, the assessing authority had rightly taxed @ 2%, thus the order of authorization for re-assessment under Section 29(7) of the VAT Act cannot be sustained on the premises that plant and machinery has not been included. Once the matter of the assessee for previous year was accepted by the Tribunal as far as the capital goods are concerned, which were outside the Composition Scheme, the respondentauthority was not correct to pass order of authorisation under subsection 7 of Section 29 for the re-assessment, as the same had attained finality and was binding - As the order of authorisation for re-assessment is based on the fact that the capital goods should have been included in the value of work contract and was liable to be assessed @ 6%, respondent no.2 had no other material on record to form the basis for reason to believe that the income has escaped assessment. The order dated 15.3.2019 authorising the respondent no.3 for re- assessment for assessment year 2010-11 is against the well settled principle of law and is unsustainable. Once the Assessing Authority has assessed the value of work contract and passed assessment order and taxed the assessee @ 2%, since the value of goods imported from outside the State, was less than 5% of the total amount of contract money, the respondent no.2 did not have any material to believe that whole or any part of turnover of dealer has escaped assessment to tax or has been under assessed or assessed to tax at a lower rate than at which it was assessable. Petition allowed.
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