TMI Blog2013 (9) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... Cement with its proprietor Heidelberg Cement India Ltd. The petitioner has its manufacturing unit at Mandora, Jhansi, where it is carrying out the business of manufacture and sale of O.P.C. and P.P.C. cement. 3. The writ petition is directed against the order dated 19th September, 2011 passed by the Addl. Commissioner, Commercial Tax, Jhansi Range, Jhansi under Section 21 (2) of the U.P. Trade Tax Act, extending the period of limitation (which expired on 31st March, 2008) for reassessment. 4. For the assessment year 2005-06 the original assessment order was passed by the Deputy Commissioner (Assessment), Jhansi on 31st March, 2009 accepting the books of account and the disclosed turn over of the petitioner as asseessee, in respect of Cement sold and sent both by rail as well as by trucks. The petitioner had spent an amount of Rs.21,39,96,022/-, on account of freight, which was allegedly charged separately from the customers. The assessing authority had accepted the turn over excluding the freight for the purposes of levy of tax on the sale of Cement. While calculating the taxable turn over the assessing authority had added the entire amount of freight of Rs.21,39,96,022/- and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordance with the rules. The trader has disclosed in its return of service tax of the year 2005-06 only an amount of Rs.3,78,09,696/- as freight, in the concerned department in the category of goods transport service, whereas in the commercial tax assessment he has disclosed the freight at Rs.21,39,96,022/-. 8. A notice dated 14.9.2011 was issued to the petitioner, in reply to which a written explanation and affidavit was filed, in support thereof the General Manager (Taxation), Senior Accounts Officer and the Advocate of the firm appeared and claimed the exemption of commercial tax on the entire amount of freight. They pleaded that at the time of assessment they had produced the account books and verified the entire sale of cement and the expenses of freight both by transport through road and rail. During the course of hearing the trader accepted that the cement dispatched by the company to its various depots by rail, the freight thereafter was borne by either the depot or by the company and thereafter it was realized from the consumers. They, however, did not produce the account books with regard to the loading, unloading, the details of the freight charges and the manner such c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agrawal submits that under Section 21 (1) the words are ''has reason to believe' and not ''reason to suspect'. The belief entertained by the assessing authority must not be arbitrary or irrational. It must be reasonable and based on reasons, which are relevant. It should be in good faith and not a mere pretence. It should have rational connection and relevant bearing on the formation of belief, which should not be extraneous or irrelevant. It is not any and every material, howsoever vague and indefinite or distant, remote and far-fetched, which would warrant the formation of the belief. He has relied upon Aryaverth Chawal Udyog v. State of U.P., 2008 UPTC 881, in submitting that there is no justification, in the case for initiating the reassessment proceedings. He has also relied upon Apolo Tyres v. State of U.P. Ors., 2010 (42) NTN 169 in which it was held that on the same material, which was in existence at the time of original assessment, reassessment proceedings cannot be initiated. There has to be fresh material on the basis of which belief may be formed. He submits that entire records were produced before the assessing authority. In item no.10 of the details of turn over, g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both the consignor and consignee, and that the agents of appellant had accepted the delivery of goods at the destination and thereafter sent the goods by delivery challan, from the depot/ station to the consumers. The Addl. Commissioner has not committed any error in finding that there was fresh material on which reasonable belief could be formed that the turn over of freight had escaped assessment. 13. Shri Kesarwani submits that the petitioner-company has not come with clean hands. It made false disclosures and has made false statement in the High Court that the entire account books were produced. The account books relating to freight and the manner in which the freight was charged and realised from the consumers was never produced before any authority. The petitioner relied upon certain judgments and suppressed the account books. Shri Kesarwani submits that the petitioner had cleverly withheld the relevant facts of the manner and method of charging freight. The facts came to the light only after examining the service tax returns. 14. We have considered the arguments and the reasons recorded by the Addl. Commissioner in the order of giving the permission for reassessment unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the petitioner and stated that the freight has been separately charged in the bills. In our opinion these observations, are not only casual but are also against the record. The assessing authority had clearly observed and recorded finding that the petitioner did not produce the material relating to freight and did not produce, inspite of demand, the challan, delivery challan, invoices and thus rejected the plea of exemption. The first appellate authority was in doubt. It relied upon the statement given by the State representative on examining some of the bill books and remanded the matter. On these findings the Tribunal could not had returned the findings that the entire account books and bill books were produced and that State representative had also examined the records and found that the freight was charged separately. In the circumstances, the findings recorded by the Tribunal cannot be sustained or believed for advancing the argument that the entire material was placed and examined by the assessing and the appellate authorities. 17. The material discovered by the department from the returns filed by the petitioner in Central Excise Department for levy of service tax, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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