TMI Blog2009 (11) TMI 828X X X X Extracts X X X X X X X X Extracts X X X X ..... engineering, the relief is granted to the petitioner by permitting it to pay the tax at a lower rate. W.P. dismissed. - Writ Tax No. 469 of 2004 - - - Dated:- 10-11-2009 - PRAKASH KRISHNA AND SUBHASH CHANDRA NIGAM , JJ. The judgment of the court was delivered by PRAKASH KRISHNA J. Raising a short but interesting controversy, the present writ petition has been filed for quashing or setting aside the proceedings initiated against the petitioner under section 21(2) of the U.P. Trade Tax Act, 1948 (hereinafter referred to as, the Act ) relating to the assessment years 1997-98 (both U.P. and Central) and 1998-99 (both U.P. and Central). Factual matrix, which is almost undisputed, may be noticed in brief. The petitioner, a company, incorporated under the Companies Act, is engaged in the manufacture and sale of candies, bubble gum and chewing gum. It is selling its products toffees, bubble gum and candies within the State of U.P. On January 3, 2000, the Deputy Commissioner (Assessment) IX, Trade Tax, Ghaziabad, holding that bubble gum sold by the petitioner in the State of U.P. is liable to be taxed as confectionery item , at the rate of five per cent, passed the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for and has been permitted by the apex court to intervene in the matter relating to SLP of Commissioner of Trade Tax v. Associated Distributors [2008] 15 VST 39; [2008] 7 SCC 409. It was further pleaded that in view of the judgment of the apex court in the case of Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association CSI Cinod Secretariat, Madras [1992] 3 SCC 1, there is a difference in between an interim order and a final order passed by a court. A stay order is operative from the date of passing of the order and does not mean that the order under appeal has been wiped out from existence. It was stated that since the matter is subjudice before the apex court, at this juncture the permission to reopen the case under section 21(2) of the Act would be unjust and against the spirit of law. Without awaiting the outcome of the reply, as was submitted by the petitioner, the petitioner rushed to this court by filing the present petition and sought quashing of the proceedings initiated against it under section 21(2) of the Act. A counter-affidavit on behalf of the respondents has been filed wherein the action taken by them has been sought to be justified on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that at the relevant point of time when the notices were issued for permission to reopen the assessments, the judgment of the High Court holding that these items are liable to be taxed at the rate of five per cent being confectionery items was holding the field, the passing of the stay order by the apex court will not take away or wipe out the judgment of the High Court and as such, there was no material before the authority concerned to form the belief that the turnover of the dealer-petitioner has escaped assessment. With regard to the subsequent development, i.e., the judgment of the apex court reversing the judgment of the High Court is concerned, he submits that the reason cannot be supplemented and while judging the validity of the initiation of the proceedings, the facts as they stood at the relevant point of time, should only be taken note thereof. In other words, the submission is that the judgment of the apex court is not relevant for the present moment while considering the question of legality and validity of the initiation of reassessment proceedings is concerned. In contra, the learned standing counsel, on the other hand, submits that in view of the authoritative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We find that in the present case, the apex court in the case of Associated Distributors [2008] 15 VST 39; [2008] 7 SCC 409 has not said so that the judgment would not be applicable retrospectively. Salmond on Jurisprudence, Tenth Edition, by Glanville L. Williams at page 189 states as follows: . . . the theory of case law is that a judge does not make law; he merely declares it; and the overruling of a previous decision is a declaration that the supposed rule never was law. Hence, any intermediate transactions made on the strength of the supposed rule are governed by the law established in the overruling decision. The overruling is retrospective, except as regards matters that are res judicata, or accounts that have been settled in the meantime. Having said as above, we are of the view that in the case on hand, the law that chewing gum and bubble gum are taxable as unclassified items and, therefore, liable to be taxed at the rate of 10 per cent has been the law throughout with effect from the date of enforcement of the relevant notification. It shall be deemed to be from the date of notification and as such, it is but a clear case of escapement of turnover as these it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act expressly says that notwithstanding a change of opinion the Commissioner, Trade Tax on being satisfied on the basis of the reasons recorded by the assessing authority that it is just and expedient so to do, authorise the assessing authority to reopen the assessment. The expression used just and expedient in the said provision also supports the above view. Strong reliance was placed on a Division Bench decision of this court in K.N. Agrawal v. Commissioner of Income-tax [1991] 189 ITR 769. It was a case under the Income-tax Act and the court was considering scope of section 263 of the Income-tax Act. The said provision empowers the concerned authority to revise the assessment order, after giving notice to the assessee. The said section has nothing to do with the scope of reopening of a concluded assessment order on the ground of escapement of income or turnover, as the case may be. It was held that the orders of the Tribunal and High Court are binding upon the assessing authority and the assessing authority cannot ignore them merely on the ground that the Tribunal's order is subject-matter of revision in the High Court or that the High Court's decision is under appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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