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2019 (3) TMI 774 - HC - VAT and Sales TaxValidity of reassessment proceedings - reopening of assessments - change of opinion - input tax credit - Held that:- Admittedly, the reassessment proceedings have been initiated only on the basis of the information received from the Deputy Commissioner (SIB), Commercial Tax, Muzaffarnagar pertaining to the search/survey dated 04.07.2013 at M/s TISCL and search/survey dated 11.07.2013 carried out at the business premises of the petitioner by the DGCEI, New Delhi. On the basis of the said search, notices were issued by the excise authorities and the replies have been submitted by the petitioner. Thereafter, no proceeding, whatsoever, has been undertaken by the excise authorities, nor has levied any duty, tax or imposed penalty upon the petitioner. The basis of reassessment proceedings initiated by the respondents – authorities is only the survey/search conducted by the DGCEI, New Delhi and no further action or order has been passed or brought on record by the respondents - The jurisdiction to initiate reassessment proceedings arises only after the Assessing Authority records his reason to believe that any turnover has escaped assessment. Thus, not only is the belief of escapement essential, but, more importantly, it is necessary for the Assessing Authority to record his reason(s) as to existence of the belief of such escapement - In the present case, the respondents, while making proposal for reassessment, record their reason to the effect that survey has been conducted by the Central Excise authorities at the business premises of M/s TISCL, in which certain incriminating materials were found, which represent clandestine removal of goods and non-payment of due taxes and therefore, verification is required for the said figures and reassessment proceedings may be permitted. In the present case, the reassessment proceedings have only been initiated on the basis of the survey/search conducted by the Central Excise authorities, i.e., DGCEI, New Delhi, and this fact is admitted between the parties that no further action has been taken by the said authorities, nor any tax, duty or penalty has been imposed upon the petitioner - the present proceedings of reassessment are absolutely bad in law and are not permissible under the law. Petition allowed.
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