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2019 (11) TMI 373 - HC - VAT and Sales TaxValidity of assessment order - Re-assessment/revision of assessment - benefit of concessional rate of tax - the petitioner received pre-assessment notices dated 06.12.2006 proposing to bring to tax the very same transactions at regular rate, thus denying the petitioner the benefit of concessional rate of tax - change of opinion - whether the authorities of the State Commercial Taxes Department are empowered to initiate proceedings for re-assessment/revision of assessment - scope and width of such powers. HELD THAT:- The issue is covered within the scope of Section 16 of U.P. Trade Act, 1948 where it has been stated the provisions for assessmnet of escaped turnover. In the present case, it is the provisions of sub-Section 1(b) that would be attracted, insofar as we are concerned with re-assessment of turnover at a higher rate than what was initially applied. Section 16 provides for assessment of escaped turnover 'for any reason'. The language utilised is wide and grants unrestricted powers to an assessing authority to bring to tax turnover that has in his opinion escaped assessment for any reason whatsoever. Thus, the statutory provision for initiating proceedings for assessment of escaped turnover permits an Assessing Authority under the TNGST Act to initiate proceedings for re-assessment merely if, in his opinion, turnover liable to be brought to tax, has escaped assessment. Concessional rate of tax - Fibre Glass Reinforced Plastic Products - TNGST Act - rate of sales tax chargeable - HELD THAT:- There appears to have been an inspection at the petitioners’ premises on 22.05.2006 and based on a statement recorded therein, a notice dated 22.05.2006 for revision of assessment was issued by the Enforcement Officers. The notice alleged that the inspection of the business premises revealed contravention of the provisions of the Act insofar as the sales in respect of which concessional rate was sought were not so eligible to the same and ought to have been taxed under regular rate. The conclusion of the Assessing Authority to the effect that section 3(5) would apply to 'capital goods' alone is clearly incorrect and does not appear to have any basis. Capital goods being machinery as well as parts, accessories and tools thereof fall within the ambit of clause (3) of the Eighth schedule and consequently within the beneficial sweep of section 3(5) as well. There is no dispute in this case that the purchaser is an industrial consumer and is not a trader/retailer. Being a manufacturer, the petitioners’ case is that the FGRP supplied has been used by the purchasers in their manufacturing activity. This argument has been specifically raised by the petitioner in reply dated 11.01.2007 more than once and has not been controverted or denied by the Assessing Officer. It is hence uncontroverted that the ultimate consumer in this case is a manufacturer. Thus, in summation, the commodities in question fall within the cover of the Eighth schedule and have been purchased for use in the activity of manufacturing by the purchaser. The provisions of section 3(5) are thus applicable on all fours in this case. The objections of the Assessing Officer to the effect that the averments in Form XVII declaration would have to be proved by a selling dealer, is clearly misplaced and does not stand to reason. The orders of assessment are quashed on merits - Petition allowed.
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