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VAT and Sales Tax - Case Laws
Showing 41 to 60 of 65 Records
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2021 (2) TMI 496 - MADRAS HIGH COURT
Works Contract - recovery of tax alongwith penalty - appellant's argument was that they are civil contractors and in terms of Section 6(4) of the Act, payment of tax for the works contract done is based on the receipts for the relevant assessment year and taxes are to be paid by the appellant when the appellant receives payment or receivable from the person, for whom the works contract was undertaken by the appellant - HELD THAT:- Considering the fact that the assessments are of the years 2012-13 and 2013-14, that the matters are dragged on till now, that apart from the taxes, which were remitted by the dealer in the year 2015, the Department has not been able to recover tax nor the penalty, which has been quantified in the impugned assessment orders passed in the year 2017 and that the assessment orders remain as paper orders, this Court is of the view that one more opportunity can be granted to the appellant to go before the Assessing Officer by producing the original records to substantiate their claim. However, such an option shall be given subject to a stringent condition.
The appellant shall pay 50% of the disputed tax for each of the assessment years within a period of 60 days from the date of receipt of a copy of this common judgment and if the payment is made for both the assessment years within the time stipulated, the appellant will be entitled to treat the assessment orders dated 23.1.2017 for the years 2012-13 and 2013-14 as show causes notices, give their explanation, appear before the Assessing Officer on the date to be fixed by him and produce original records to justify their stand - Appeal allowed.
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2021 (2) TMI 484 - MADRAS HIGH COURT
Maintainability of petition - availability of alternate remedy - TNVAT Act - adjustment done towards the sales tax dues payable by the appellant - Section 19(17) of TNVAT Act - HELD THAT:- If we are to accept the submission of Mrs.G.Dhanamadhri, learned Government Advocate appearing for the respondent, the consequence, which would follow is that the Department has to refund the amount of ₹ 14,84,690/- together with interest from January 2015 i.e when the adjustment was made till the date it is paid and the interest should be definitely compensatory. From the facts placed before the Court in the two earlier writ petitions as well as before the learned Single Judge in the impugned order, it is clear that the excess input tax credit, which accrued to the said M/s.Essa Hosiery Mills is not in dispute. Therefore, it will be too late in the day for the Department now to reopen the entire issue and conduct an autopsy of the matter especially because the adjustment was at the behest of the Department.
Even assuming that the adjustment was erroneous and it had to be reversed, then the dealer would have to be refunded the entire amount with interest, which, in our opinion, should be not less than 18% per annum. Thus, considering the factual situation and bearing in mind the interest of the Revenue, we are of the considered view that the order dated 04.12.2015 impugned in the present writ petition has to be quashed.
Appeal allowed.
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2021 (2) TMI 482 - MADRAS HIGH COURT
Time Limitation of assessment order - reversal of input tax credit on the inter-state sales effected to Government Departments - applicability of judgment of the Hon'ble Supreme Court dated 12.10.2018 in the case of TVS Motor Company Ltd. Vs. State of Tamil Nadu and others [2018 (10) TMI 887 - Supreme Court].
HELD THAT:- The tax case revision is allowed, the impugned order passed by the Tribunal is set aside and the matter is remanded to the Tribunal for a fresh consideration. The Tribunal shall permit the petitioner – dealer to file additional grounds of appeal duly supported by decisions and thereunder, the appeal shall be heard and decided on merits and in accordance with law.
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2021 (2) TMI 481 - HIMACHAL PRADESH HIGH COURT
Maintainability of petition - availability of alternate remedy of appeal - Re-assessment of tax - demand of tax - HELD THAT:- The power of re-assessment, of, under-assessed or escaped assessment, of, tax as borne in the apposite returns, filed by the taxable unit, becomes visibly vested in the assessing authority, through statutory empowerment, becoming conferred, upon the assessing authority. In sequel thereto, the latter through an order borne in Annexure P-12A, anvilled its reassessment, of, the initially assessed tax qua the petitioner-Unit, upon, an audit observation - The apposite order of reassessment, as, embodied in Annexure P- 12-A, displays qua an allusion being made to the audit observations, appertaining to the purported under-assessed or escaped tax, and, further reveals qua theirs arising from purported breaches being visited, to, the provisions of Section 11(1) and 11 (3) of the Act
Hon’ble Apex Court, in case rendered in case titled as FIS Global Business Solutions India Pvt. Ltd. Versus Principal Commissioner of Income Tax-3, New Delhi and another decided on 16.11.2018 in [2018 (12) TMI 130 - DELHI HIGH COURT], (i) wherein it has been expostulated that the expostulations of law, borne in a judgment rendered in case title as Carlton Overseas Pvt. Ltd. v. Income Tax Officer & Ors [2009 (8) TMI 57 - DELHI HIGH COURT] (ii) inasmuch as the reassessment of the completely assessed tax, upon, apposite tax returns, filed by the taxable unit, being valid, only upon, tangible material being made available to the revenue, and, also that hence an audit objection or an audit report issued by the revenue rather not constituting potent material - The afore expostulations of law borne in the judgment, for all the hereinabove reasons, is pointedly and squarely applicable to the factual matrix available hereat, and, in consonance therewith, this Court proceeds to set aside the impugned Annexures, through its invoking the power of judicial review, invested under Article 226 of the Constitution.
Petition allowed.
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2021 (2) TMI 476 - RAJASTHAN HIGH COURT
Scope of Casual Dealer - whether the respondent can be treated to be a casual trader or not? - HELD THAT:- This court finds that the Tax Board has considered the judgment passed by this court in identical matter i.e.Sales Tax Officer v. Jagdish Prasad [2013 (5) TMI 1028 - RAJASTHAN HIGH COURT] wherein the department's appeal was rejected by the High Court and it was held that such a person who gets the vehicle for his own use would fall within the provisions of Section 10 (B) (I) (II) and would have to be taken as casual trader. Since the assessment had been done more than two years back, the provisions of limitation with regard to bar of reopening assessments after two years would therefore apply - Keeping in view thereof, the Tax Board has found that the action taken by the present petitioner beyond limitation and the order dated 9-10-2012 was accordingly set aside.
Revision petition dismissed.
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2021 (2) TMI 405 - MADRAS HIGH COURT
Maintainability of petition - availability of alternative remedy of appeal - Validity of assessment order - TNVAT Act - assessment year 2014-15 and 2015-16 - HELD THAT:- It is found that not only the stand taken by the appellant was examined by the Assessing Officer but the Assessing Officer has gone one step further to observe that the dealers have not furnished any documentary evidence for proof for movement of goods without which the physical occurrence of the transaction cannot be established. Therefore, we are not inclined to accept the submission made on behalf of the appellant that the Assessing Officer has brushed aside the legal position and concluded the assessment rather the Assessing Officer has rendered a opinion on the available facts and taking note of the reply given by the appellant.
Therefore, if according to the appellant this conclusion is factually wrong that needs to be agitated in an appeal and to be adjudicated by the appellate authority and not by a writ court. Therefore, the learned Single Bench was right in relegating the appellant to avail the available remedy of appeal - the writ appeals are dismissed with liberty to the appellant to file an appeal before the first appellant authority and if such appeal is filed within a period of thirty days from the date of receipt of copy of this judgment, the appellate authority shall entertain the appeal without reference to limitation and take a decision on merit
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2021 (2) TMI 374 - MADRAS HIGH COURT
Violation of principles of natural justice - no personal hearing was granted after the evidence and documents were filed by the appellant/writ petitioner pursuant to the notices issued by the respondent proposing to revise the assessment - Section 27 of the TNVAT Act - HELD THAT:- The Hon'ble Division Bench in SRC Projects Private Limited vs. Commissioner of Commercial Taxes, Chennai & Anr. [2008 (9) TMI 914 - MADRAS HIGH COURT], has considered as to why opportunity of personal hearing is to be afforded - Therefore, opportunity of personal hearing especially, in matters relating to taxation is a very effective tool where the dealer and the Assessing Officer have an opportunity to interact and certain facts will emerge during the interaction, which may not be apparent on print. That apart, we have also noted that the current situation is not very conducive both for the appellant as well as the state exchequer and the appellant has also claimed for refund, which according to them, they are rightfully entitled. This Court deems it appropriate to modify the ultimate conclusion arrived at by the learned Single Bench by directing an opportunity to be granted to the appellant, which shall be subject to certain conditions.
The writ appeals are allowed and the ultimate conclusion arrived at by the learned Single Bench for dismissing the writ petitions is set aside and the appellant is directed to remit 15% of the disputed tax for each of the assessment years on or before 29.03.2021. If the appellant complies with the said condition within 7 days there from, the appellant shall file their objections by treating the impugned assessment orders dated 25.02.2019 as show cause notices, file the documents which they propose to rely upon. The Assessing Officer upon going through the same and familiarizing himself with the subject, shall afford an opportunity of personal hearing to the authorized representative of the appellant, hear the appellant in full and pass a speaking order on merits and in accordance with law.
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2021 (2) TMI 332 - MADRAS HIGH COURT
Restriction on use of 'C' Forms for the inter-state purchases of six commodities - circular dated 05.09.2019 - HELD THAT:- Since as on date, the order made in the writ appeal is final, the writ petition has to be necessarily allowed. It is accordingly allowed. The petitioner is entitled to the inclusion of 'High Speed Diesel Oil' as a commodity in the registration certificate. Let this exercise be carried out within a period of four (4) weeks from the date of uploading of this order. The request of the petitioner for issuance of 'C' Forms is allowed as a consequence thereof.
Petition allowed.
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2021 (2) TMI 299 - GUJARAT HIGH COURT
Recovery proceedings - Attachment of registered property of the petitioners - Section 152 of Bombay Land Revenue Code, 1879 - whether the impugned notice under Section 152 of the Bombay Land Revenue Code, 1879 could have been issued for the purpose of recovery of tax as determined, pending the appeal and the stay application before the Gujarat Value Added Tax Tribunal at Ahmedabad? - HELD THAT:- It is not in dispute that the appeal and the stay application is pending as on date before the Tribunal. We are of the view that as the appeal and the stay application is yet to be adjudicated by the Tribunal, there should not be any further proceedings under Section 152 of the Land Revenue Code. In fact, we may observe that no such notice under Section 152 of the Code could have been issued. Thus, at-least till the stay application is disposed of, the department should not initiate any action for the purpose of recovering the tax demand.
The impugned notice dated 18.07.2019 issued by the respondent no.2 under Section 152 of the Land Revenue Code is quashed - application disposed off.
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2021 (2) TMI 298 - MADRAS HIGH COURT
Refund the additional sales tax collected - Section 55 of TNGST Act - HELD THAT:- It goes without saying that the assessment made on the petitioner by the second respondent requires to be revised by following the law, which has been laid down in the aforesaid mentioned decisions. Therefore, we are of the view that the Tribunal should have exercised its jurisdiction and issued appropriate directions to the Assessing Officer instead of rejecting the application filed by the petitioner under Section 55 of the Act.
The impugned order is set aside and the matter is remanded back to the Assessing Officer to apply the aforesaid mentioned decisions and pass fresh orders in accordance with law - Petition allowed by way of remand.
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2021 (2) TMI 297 - GAUHATI HIGH COURT
Correctness of the rejection of the application seeking refund - Time limitation - rejection on the ground that the same was filed beyond the prescribed period of 180 days without sufficient explanation being furnished explaining the delay in filing the application for refund - HELD THAT:- It is seen that Section 50 of the Assam Value Added Tax, 2003 provides that, if it is found on assessment or reassessment that a dealer has paid tax, interest or penalty in excess of what is due from him, the Prescribed Authority shall, on a claim being made by the dealer in the prescribed manner and within the prescribed time refund to the dealer the amount of tax, penalty and interest paid in excess by him - The Rule 29 of the Assam Value Added Tax Rules 2005 provides that a claim for refund as provided under Section 50(1) of the AVAT Act, 2003 shall be made in Form 37 within 180 (one hundred and eighty days) from the date of assessment or reassessment. The said Rule prescribes the manner in which the Form is to be filled and submitted seeking claim of refund. Provisio to Rule 29(1)(a) of the AVAT Rules gives a latitude to the Prescribed Authority to entertain an application seeking refund submitted even after the prescribed period of 180 (one hundred and eighty days) from the date of assessment or reassessment as the case may be. The Prescribed Authority may consider the refund claim if it is satisfied that the dealer had sufficient cause for not making an application within the said period. What will be sufficient cause has not been described in the statute. The Prescribed Authority is given the liberty to entertain such claims that may be filed even after the expiry of prescribed period of 180 (one hundred and eighty days) from the date of assessment or reassessment on sufficient causes being shown by the dealer. Accordingly, it is implied under the provisions of Section 50 of the AVAT Act 2003 read with Rule 29(1)(a) AVAT Rules 2005 that if cause(s) shown by a dealer are not considered to be sufficient then the Prescribed Authority must reflect and disclose the reasons therefor in the order passed by the Prescribed Authority rejecting any claim for refund made by a dealer, namely the petitioner company in the present proceeding.
The impugned order is interfered with and is accordingly set aside and quashed - matter is remanded back to the respondent authorities to re-decide on the question of grant of refund as prayed for by the writ petitioner - Petition allowed by way of remand.
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2021 (2) TMI 251 - SC ORDER
Benefit of concessional rate of 2% of CST - Post GST era - Denial of benefit of purchases of HSD Diesel, Natural Gas in the course of inter-State Trade or Commerce - Declaration of 'C' forms of the CST Act, 1956 - HELD THAT:- Issue notice.
Matters be posted for final disposal on on 17th February, 2021 (NMD) - There shall be stay of operation of the impugned judgment passed by the High Court of Judicature at Madras till the next date of hearing.
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2021 (2) TMI 250 - GUJARAT HIGH COURT
Maintainability of appeal - failure to make payment of pre-deposit - HELD THAT:- It appears that the Assessment Orders for the respective years were challenged before the First Appellate Authority and Tribunal, as referred to above. However, all the appeals having been dismissed only the ground of nonpayment of pre-deposit amount and accordingly, without entering into the merits of the case, the appeals were dismissed summarily.
The appeals filed before the First Appellate Court must be heard on merits, more particularly, out of ₹ 12 lakhs, the substantial amount of pre-deposit of ₹ 7,43,000/- is already deposited on different dates before the concerned authorities. We also take into consideration the statement made at the bar by learned advocate Mr. Trivedi that writ applicant will deposit the remaining amount of ₹ 4,33,000/- within a period of 8 weeks from today - Application disposed off.
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2021 (2) TMI 249 - GUJARAT HIGH COURT
Refund of the amount recovered during the search - Amount has not been appropriated by passing the audit assessment orders and the same now having become time barred - HELD THAT:- It appears from the materials on record that the writ applicants are engaged in the business of excavation and grinding of black trap stones and sale of the products like grit, rubbles etc.
There is no legal justification for withholding the amount referred to above, which is otherwise refundable to the writ applicants in passing of any assessment orders for the relevant assessment years. It could be said that such withholding of the refund is contrary to the provisions of the Section 36 of the VAT Act, 2003.
The respondents are directed to pay to the writ applicants an amount of ₹ 14,61,850/- together with the statutory interest @ 6 % within a period of six weeks from the date of communication of this order - Application allowed.
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2021 (2) TMI 248 - GUJARAT HIGH COURT
Legality and validity of the order of attaching the bank account of the writ-applicant in exercise of power under Section 44 of the GVAT Act - service of notice under Section 34(8A) of the GVAT Act - HELD THAT:- Ordinarily, we would not have entertained this writ-application on the ground that the impugned order dated 08.07.2019 passed under Section 34(8A) of the GVAT Act, 2003 is an appealable order. However, in view of certain pleadings in the writ-application, we thought fit to issue notice and call upon the respondents to justify its action of invoking Section 34(8A) of the Act.
The communication is ordered to be taken on record. The plain reading of the aforesaid communication would indicate that the matter was closed for the assessment year 2010-11 - as the condition precedent for invoking Section 34(8A) of the Act is not fulfilled in the present case, not only the impugned order dated 08.07.2019 of assessment is rendered illegal, but even the subsequent action in the form of attachment order under Section 44 of the Act would be rendered without jurisdiction.
The impugned order dated 08.07.2019 passed by the respondent no.2 Annexure-D to the writ-application is hereby quashed and set aside - Application allowed.
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2021 (2) TMI 247 - MADRAS HIGH COURT
Jurisdiction - Inter-state sales or not - resident dealer in Tamil Nadu or not - Assessing Officer was of the view that since the furnished goods manufactured by M/s.UHEL moved to other states from the State of Tamil Nadu, the State of Tamil Nadu is the appropriate State to assess the transactions under Section 9(1) of the CST Act - HELD THAT:- Section 3 of the CST Act falls under Chapter 2, which is a chapter dealing with formulation of principles for determining when sale or purchase of goods takes place in the course of inter-state trade or commerce or outside a State or in the course of import or export. Section 3 explains as to when a sale or purchase of goods is said to take place in the course of inter-state trade or commerce. To qualify as a sale to have been taken place in the course of inter-state trade or commerce, two conditions have been stipulated, which are highly exclusive on account of the use of the expression "or" - Therefore, if the sale or purchase occasions the movement of goods from one State or another, it would qualify for a sale in the course of inter-state trade or commerce or if a sale or purchase is effected by a transfer of documents of title to the goods during the movement from one State to another, it would qualify as a sale in the course of inter-state trade or commerce.
The Tribunal took note of the sub-contract entered into between the first respondent-assessee and M/s.UEHL, dated 24.06.1983. The terms and conditions of the said subcontract have been extracted in paragraph 14 of the impugned order passed by the Tribunal. On a perusal of the same, it is abundantly clear that what has been entrusted to M/s.UEHL is only a job work. The contract entered into by the first respondent-assessee with a party in Orissa or any other State is the main contract, for which, the assessee has entered into a sub-contract by supplying raw materials, so as to enable the sub-contractor to manufacture as per the design supplied by the first respondent-assessee. The first respondent-assessee has further instructed the sub-contractor, upon permission of the job worker to despatch the goods directly to others where the contract is being performed and is being fulfilled by the first respondent.
Whether movement of goods from the State of Tamil Nadu, at the instance of the sub-contractor, to another State, could be construed as a sale in the course of inter-state trade or commerce. Indisputably, the title to the goods, though in the form of a raw material, continued to remain with the first respondent-assessee. What was entrusted with the UEHL was only a job work and the specifications have been clearly set out in the sub-contract. Therefore, the Tribunal rightly took into consideration the nature of the transaction and also took note of the important fact that the contract is a composite contract executed by the first respondent outside the State of Andhra Pradesh, for which, the first respondent showed various materials pertaining to various job workers for various purpose and the contracts were executed only by the first respondent at the designated place, which is situated outside the State of Andhra Pradesh.
The Tribunal has not committed any error for us to substitute our opinion. Furthermore, the manner in which the Tribunal has appreciated the nature of contract and as to how the title to the goods was never transferred to M/s.UEHL are all findings on facts, which are perverse or unsustainable for us to interfere under Article 226 of The Constitution of India - Petition dismissed.
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2021 (2) TMI 246 - MADRAS HIGH COURT
Addition for non-maintenance of stock book - levy of additional sales tax - estimation of 1% addition for non-maintenance of stock book on the reasoning that the assessee is not a manufacturer - levy of additional sales tax for the assessment year 1996-97 since the taxable turnover did not exceed 100 crores as per amended provision of Section 2(1)(aa) - validity of deletion of consequential surcharge, additional sales tax and penalty - HELD THAT:- The substantial questions of law which have been raised for consideration has been answered in Philips India Limited vs The Assistant Commissioner (CT), Fast Tract Assessment Circle II and others [2004 (5) TMI 538 - MADRAS HIGH COURT] where it was held that the provision under Section 55 of the TNGST Act and the relevant rules would be applicable for the purpose of effecting rectification. The Tamil Nadu Additional Sales Tax Act, 1970 is not a self contained code. It merely supplements Tamil Nadu General Sales Tax Act. It is necessary to read and construe the Tamil Nadu General Sales Tax Act and the Tamil Nadu Additional Sales Tax Act together.
The tax case revision stands disposed of.
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2021 (2) TMI 245 - MADRAS HIGH COURT
Maintainability of petition - availability of statutory appeal remedy of appeal - Reopening of assessment - Exemption from tax or not - tea dust - soap - hand made matches - Section 84 of the TNVAT Act - AO rejected the petition on the ground that the power under Section 84 can be invoked only for correction of clerical and arithmetical mistakes alone and therefore, the petition is not maintainable - HELD THAT:- There is a primordial mistake committed by the Assessing Officer by invoking Section 84 of the Act for reopening the assessment. Mr.Mohammed Shaffiq, learned Special Government Pleader appearing for the respondent is right in his submission that power to reopen assessment is traceable to Section 27 of the TNVAT Act. It is the further submission of the learned Special Government Pleader that at best making a reference to Section 84 of the Act in the show cause notice dated 30.04.2014 can be treated as quoting a wrong provision and if the goods sold by the appellant- Society to the fair price shops are exigible to tax, then there is an error in the assessment, which needs to be rectified. Under normal circumstances, we would have laboured on this issue, but the facts of the present case precludes us from doing so. It is not as if the Assessing Officer was not aware of what was the scope of his power under Section 84 of the Act as could be seen from the order dated 09.10.2014, wherein he states that the power can be exercised only for correction of clerical and arithmetical mistakes - thus it cannot be accepted that the submission that referring to Section 84 in the show cause notice dated 30.04.2014 was quoting a wrong provision of the Act.
In any event, if the assessment has to be reopened, it requires to be done in terms of Section 27(1) of the Act. The Assessing Officer is bound to disclose as to under which Sub-Section, he proposes to bring the case of the dealer for assessing the turn over on the ground that the sale has escaped assessment or the dealer has been assessed at a lower rate than the rate at which it is assessable. A plain reading of the show cause notice dated 30.04.2014 will clearly show that there is no such proposal made by the Assessing Officer assuming the Assessing Officer invoked his power under Section 27(1) of the Act - the Assessing Officer did not go into the correctness of the claim made by the appellant by referring to G.O.P.No.272, Revenue dated 11.02.1967, which was issued when the erstwhile Tamil Nadu General Sales Tax Act was invoked and the Entry 43 of Part B of Fourth Schedule of the TNVAT Act.
The reopening of the assessment is bad in law - If we are to approve the stand taken by the Assessing Officer in the order dated 09.10.2014 and hold that the power under Section 84 of the Act is to correct only arithmetical and clerical mistakes, then we have to consequently hold that the reopening of the assessment invoking Section 84 of the Act vide notice dated 30.04.2014 and the consequential revised assessment order dated 09.06.2014, as illegal.
Petition is allowed.
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2021 (2) TMI 200 - ALLAHABAD HIGH COURT
Validity of initiation of reassessment proceedings - rate of tax on Multi Function Digital (MFD) - Change of opinion - reason to belief - Whether the Tribunal erred in law in upholding the validity of initiation of reassessment proceedings, when the same was based on belief which was totally irrelevant and also amounts to change of opinion? - HELD THAT:- The principle that has to ever remain clear is - the assessee may be subjected to reassessment proceeding only when the jurisdictional fact is first found to exist. That fact is the existence of a valid "reason to believe" that any turnover has "escaped assessment to tax".
In the facts of the present case, the submission advanced by Sri Mishra as to change of opinion cannot be accepted since the original assessment order dated 17.03.2010 is completely silent as to the reason why the assessing authority chose to tax on MFD @ 4%. No basis or other reason was recorded by the Assessing Officer to tax the commodity MFD @ 4%. In absence of any opinion being formed and expressed at that stage, no change of opinion may arise or be alleged when at a subsequent stage, the assessing authority forms any opinion.
At the same time, merely because no opinion had been formed by the Assessing Officer at the stage of original assessment, it would not automatically lead to the conclusion, either that any turnover had escaped assessment or that the Assessing Officer had absolute discretion to initiate reassessment proceedings as has been suggested by the learned Standing Counsel relying on a decision of the Division Bench of this Court in KALPANA KALA KENDRA VERSUS SALES TAX OFFICER, CIRCLE-20, KANPUR [1988 (12) TMI 318 - ALLAHABAD HIGH COURT]. In that case also, the original assessment order was silent as to the enquiry, if any, to accept the returned turnover. However, at the stage of the initiation of the reassessment proceedings under Section 21 of the Uttar Pradesh Sales Tax Act, 1948, three factual basis existed on the record that gave rise to the “reason to believe” that tax had escaped assessment. These were (i) wide discrepancy noted with respect to value of purchases of the assessee, (ii) escapement of tax on the closing stock and (iii) also non-verification of the information received on assessment record.
In the instant case, there is no recital in the "reason to believe" of any factual basis or of any information received or of material existing on record on the assessment file of the assessee as may have given rise to any "reason to believe”. The notice issued by the Additional Commissioner dated 15.05.2012, which is stated to contain the “reason to believe” only refers to the fact that MFD had been subjected to tax @ 4% in the original assessment order treating the same to be computer peripherals whereas that commodity was not computer peripheral and, therefore, liable to be taxed as an unclassified commodity. In the first place, the "reason to believe" suffers from a factual fallacy. There was no entry available under the Act to tax "computer peripherals". That entry first appeared only by virtue of Entry no.22 of Part B of Schedule II of the VAT Act - there was no question of introducing that entry in the assessment proceedings under the Act or to examine that entry for the purpose of either making an assessment under the Act or to re-open any assessment under that Act. That fact was plainly or completely extraneous to the assessment made under the Act.
The existence of a valid reason to believe must be established as a fact, by the revenue, before a valid reassessment proceeding may arise. Recording of a "reason to believe" is a conscious act by the assessing authority. It is the result of an application of mind made by the assessing officer to all relevant material before him. Unless he first initiates this exercise and consequently records his "reason to believe" that any part of turnover of an assessee has escaped assessment to tax, the consequential exercise of reassessment would remain without jurisdiction. The material and reasons arising therefrom create the objective skeleton on which the subjective flesh of belief may stand - even if the conclusion ultimately drawn by the Tribunal, may appear to be correct in the given facts that the commodity was taxable not as computer hardware but as other electronic goods, that reasoning would not validate and otherwise invalid reassessment proceeding.
It is found that neither there exists any material nor any valid "reason to believe" was recorded by the assessing officer as to any part of the turnover of MFD having escaped assessment from tax - there was a jurisdictional error on part of the assessing officer in initiating the assessment proceeding.
The question of law is answered in the negative i.e. in favour of the assessee and against the revenue - Revision allowed.
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2021 (2) TMI 152 - ALLAHABAD HIGH COURT
Rebate of tax - sale of cement @ 9% which is not a sale of any manufacturer of cement within the State of U.P. but the same was purchased from Satna outside the State of U.P. - case of Revenue is that assessee had not maintained the specified accounts and had thus not fulfilled one of the conditions for grant of rebate of tax - N/N. 592 dated 27.02.1998 - HELD THAT:- Though the notification does not make any separate consideration of the manner in which claim for rebate may be made by traders yet it cannot be forgotten that the rebate granted is not to a person but to the goods. In the instant case, State Government has notified that goods containing more than 10% fly ash contents by weight, would be entitled to a rebate of tax @ 25%. Any goods that would have been thus manufactured containing more than fly ash content would attract the rebate of tax. Merely because the goods may exchange hands from the manufacturer to the trader in a retail chain, before they reach the consumer, the same would be of no material consequence to the rate of tax applicable to such goods.
Once goods are found eligible to rebate of tax owing to fly ash content of more than 10%, and that fact gets established at the hands of the manufacturer then subject to the goods remaining the same, they would continue to remain taxable at the reduced rate (upon rebate being given effect to), though they may change hands many times, before they come to be consumed - the observations of the Tribunal that the goods were certified by the manufacturer to be containing fly ash more than 10% by weight, has remained unrebutted, is material. It also does not appear that the goods had been taxed at the full rate when they came to be sold to the assessee. In fact, it appears that the goods were brought by the assessee at the reduced rate of tax.
The enquiry to be made in the assessment of a trader would be only two fold. First, whether upon sale by the manufacture the goods were entitled to rebate. Once the claim of rebate was established at the hands of the manufacture, the only thing remaining relevant to be examined would be whether the identity of the goods sold by the trader was the same - the revenue authorities rejected the claim of the assessee only on account of absence of accounts required to be maintained - Revision dismissed.
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