TMI Blog2013 (6) TMI 469X X X X Extracts X X X X X X X X Extracts X X X X ..... of the view that matter needs further inquiry by the A.O. The petitioner is at liberty to put its defence before the A.O. We hope that petitioner will cooperate with the A.O. at least this time. Thus no reason to interfere with the impugned order passed by the competent authority to grant the permission under section 21 (2) of the Trade Tax Act for reopening the assessment for the assessment year 2006-07. In its defence, the assessee will get another chance at the time of reassessment proceedings. So, the writ petition dismissed. As regards writ petition No. 4300 (MB) of 2013 it may be noted that there is no dispute in the fact that the petitioner is manufacturer of Gutka. The final product in the form of Gutka has been manufactured for the first time and the same was sold within the local area. Therefore, in view of provisions of Section 2 (C), there is no liability for payment of Entry Tax by the manufacturer, who by no stretch of imagination can be said to be a dealer in terms of Section 2 (b) of the Entry Tax Act, 2007. In the instant case, the assessment order for Entry Tax was already passed. Further, the order was also passed by the first appellate authority. Thus, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, the petitioner has filed the present petitions. Mr. H. P. Srivastava, learned Additional Chief Standing Counsel appearing for the State raises a preliminary objection that the petitioner has an alternative remedy of filing an Appeal to which Sri Bharat Ji Agarwal, learned Senior Counsel assisted by Sri Piyush Agarwal, submits that the impugned orders are not appellable, so the present writ petitions have been filed. He submits that the Gutkha, which is manufactured by the petitioner is exempted from the clutches of Trade Tax and accordingly, while computing the total taxable turnover, the sale of self manufactured Gutkha, which was sold within the State of U.P. is also exempted from the payment of Entry Tax. The tax is levied only on the sale of Pan Masala. The petitioner has maintained books of accounts, namely - Cash Book, Ledger, stock register of the raw materials, stock register of the manufactured goods, and all the sales and purchase vouchers in the regular course of business. For the assessment year under consideration, the scrutiny was made by the A.O. and the assessment order was passed. He also submits that similarly, under the Central Sales Tax Act, the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esumption. Learned counsel further submits that the petitioner has specifically demanded the information and sought an opportunity to cross examine but without affording any opportunity, the respondents no. 2 has granted the permission by means of the impugned orders dated 25.03.2013. The notice issued by the Central Excise Department cannot be relied upon since it is based upon an information that the various parties whose names and details were found in the survey report. An inference has wrongly been drawn that the petitioner has sold Gutkha outside the books of accounts. For this purpose, learned counsel has relied on the ratio laid down in the cases of M/s. M. L. Shukla and Co. Vs. Sales Tax Officer; 1981 UPTC 396 (Alld.); and Mohd. Yakub and Sons vs. Trade Tax Officer (30) STC 406 (Alld.), where it was observed that information received from the Income Tax Department cannot be used for reassessment proceedings. The survey was made by the Central Excise Department at the place of third parties. On the basis of the survey dated 30.06.2009, information was received by the Trade Tax Department and the reassessment proceeding has been initiated, which is illegal and unjustified. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aintained by Sri Manish Aggarwal, However, Sri Manish Aggarwal did not turn up on 30.06.2009, since none explained the stock in the records regarding packaging material, the entire packing material was detained on 30.06.2009 for further inquiry under Section 110 of the Customs Act, 1962, as made applicable to Central Excise Matters under Section 12 of Central Excise Act, 1944 vide notification No.68/63 -CE dated 04.05.1963. Sri Maish Aggarwal, Director of M/s K. P. Pan Products Pvt. Ltd. was repeatedly summoned to appear with records and verify the stocks, but he has not appeared. During investigations against M/s K.P. Pan Products Ptv. Ltd. evidences of clandestine purchase of packaging material from M/s Vinay Wires and Poly Products Pvt. Ltd., Rania Kanpur Dehat have been found. Thus, on the reasonable belief that he said stock of detained goods was on account of clandestine purchase on which no duty had been paid and the same are liable for confiscation under Rule 25 of Central Excise Rules, 2002 was seized under Section 110 of the Customs Act, 1962 as made applicable to like matters of Central Excise vide Section 12 of the Central Excise Act, 1944 read with Notfn. No.68/63-CE 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s granted by the impugned orders under the Trade Tax Act as well as the Entry Tax Act. Needless to mention here that initiation of proceedings for granting permission by the Commissioner after expiry of four years from the end of assessment order in question creates valuable right in favour of the petitioner. There is obligation on the Commissioner to give opportunity of hearing or show cause notice to the petitioner before granting permission for reassessment proceedings. Where no such opportunity has been given or show cause notice has been issued, the permission accorded by the Commissioner is not justifiable as per the ratio laid down in the case of Mohan Steel Limited vs. CTT; (2007)VSTI Alld. 59. The Hon'ble Supreme Court in the case of Additional Commissioner vs. Jyoti Traders; (1999) NTN 12 SC observed that the proviso is operative from February 9, 1991 and a bare reading of the proviso shows that the operation of this provision relates and encompasses to the previous assessment years. Action may be taken under Section 21(1) after obtaining permission from the Commissioner, when the original period of limitation prescribed under section 21(2) had already expired. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee would have a right to put forward his defence for not re-opening the assessment. This opportunity, if excluded, or shredded out from the aforesaid proviso, it would leave the assessee with no opportunity/remedy to challenge the very authority of the assessing officer to reopen the assessment nor there would be any opportunity to challenge the approval granted by the Commissioner under any of the remedies under the Act. When an order is passed on the basis of the reasons recorded, it naturally means that the reasons must be rationale, genuine and relevant. Any reason which cannot be termed as rationale genuine or relevant would not make out a case for reopening of the assessment and for that matter also, the assessee has to be associated in the proceedings initiated seeking approval from the Commissioner or the Additional Commissioner, as the case may be. Similar views were also expressed in the case of M/s. Manaktala Chemicals Pvt. Ltd. vs. State of Uttar Pradesh and others, (2006) UPTC 1128 Allahabad. In the present case, the assessee has not cooperated as mentioned in the report submitted by the Central Excise Department. At the time of survey, and thereafter, op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale therein and the Entry Tax was payable by dealer who is bringing the goods within the local area and not by the manufacturer. Section 4-A of the Old Entry Tax Act is equivalent to Section 12 of the New Entry Tax, 2007 and it only requires the manufacturer to collect entry tax from the purchasing dealer at the time of delivering Gutka from the manufacturer. Only change in Section 4-A and 12 (1) is that under Section 12 (1), it has been provided that the manufacturer shall not give such goods to the purchaser unless the amount of such tax has been paid by the purchaser, but such purchaser is the person who intends to bring into the local area after purchasing from the manufacturer. In other words, the liability of the manufacturer is only to the extent to collect entry tax from the dealer and deposit the same to the exchequer. In the instant case, a survey was conducted upon unregistered dealers by the Central Excise Department from whom, it is said that petitioner used to purchase raw material for manufacturing Gutka and on the basis of the report so submitted by the Central Excise Department, proceedings for reopening and reassessment under Section 21 (2) of the Trade Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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