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2022 (5) TMI 382 - HC - VAT and Sales TaxValidity of assessment order - validity of notices issued and approvals granted - Section 21 of the UP Trade Tax Act, 1948 - HELD THAT:- The materials available in the hard-disk revealed purchases of scrap by the petitioners from various dealers and sale of ingots to various local dealers and also to some Firms of Uttarakhand. It also came to light on the basis of materials available in the hands of the respondents that the petitioners made undisclosed purchases during the Assessment Year 2003-04 from M/s Kamakhya Steels Pvt. Ltd., Bijnore (658.28 MT). These details of evaded purchases/ sales which have been extracted above from the impugned notices under Section 21(1) of the Act, 1948. Evaded transactions in some greater detail are mentioned in the impugned notices. The impugned order granting permission under the proviso to Section 21(2) of the Act, 1948 for the Assessment Year 2005-06 was passed by the Additional Commissioner, Trade Tax on the basis of information received which revealed evaded/ unaccounted purchases/ sales of about Rs.2,31,81,000/- as evident from the Sale Ledger Account and other particulars available in the hard-disk and CD/ soft copy received from the Deputy Commissioner (SIB), Second Unit, Ghaziabad vide letter No.663, dated 27.03.2010, which is based on the report/ materials received from the Director General of Central Excise Intelligence, New Delhi. It is settled principles of law that proceedings under Section 21 of the Act, 1948 can be initiated if the material on which the Assessing Authority bases its opinion, is not arbitrary, irrational, vague, distant or irrelevant. There must be some rational basis for the assessing authority to form the belief that the whole or any part of the turnover of a dealer has, for any reason, escaped assessment to tax for some year. If such a basis exists, the assessing authority can proceed in the manner laid down in Section 21 of the Act, 1948. If the grounds are of an extraneous character, the same would not warrant initiation of proceedings under the above section - The question as to whether that material in sufficient for making assessment or re-assessment under section 21 of the Act would be gone into after notice is issued to the dealer and he has been heard in the matter or given an opportunity for that purpose. The assessing authority would then decide the matter in the light of material already in its possession as well as fresh material procured as a result of the enquiry which may be considered necessary. Thus, the Assessing Authority was having relevant material in his hands on the basis of which he had reason to believe that for the Assessment Years in question, the petitioners have evaded tax on undisclosed sales and made huge transactions of purchases and sales out of the Books of Account. Therefore, the permission under the proviso to sub-Section (2) of Section 21 of the Act, 1948 for the Assessment Years in question have been lawfully granted by the concerned Additional Commissioner, Trade Tax and the notices under Section 21(1) of the Act, 1948 have been lawfully issued by the concerned Assessing Authorities to the petitioners for the Assessment Years in question. There are no merits in the petition - petition dismissed.
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