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TMI Blog2009 (11) TMI 828X X X X Extracts X X X X X X X X Extracts X X X X ..... e taxed as "confectionery item", at the rate of five per cent, passed the assessment orders. Similarly, in the next assessment also, it was held that bubble gum is liable to be taxed at the rate of five per cent, the assessing authority took the above view regarding the rate of tax on bubble gum on the basis of a judgment/order passed by the Tribunal in the case of a different assessee, but relied upon by the petitioner. Thereafter, the assessments for the above two assessment years have been sought to be reopened in exercise of powers conferred on the authority under section 21 of the U.P. Trade Tax Act. A proposal for permission to reopen was submitted on the ground that in the case of Commissioner of Trade Tax v. Associated Distributors [2008] 15 VST 39 (SC); [2008] 7 SCC 409, the Tribunal has held that bubble gum and chewing gum are liable to be taxed as "unclassified item" and they are not "confectionery". In other words, these items are liable to be taxed at the rate of 10 per cent, instead of five per cent. The judgment of the Tribunal in the case of Associated Distributors has been set aside in TTR No. 656 of 2001 dated November 9, 2001(1) which is subject-matter of appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d wherein the action taken by them has been sought to be justified on the ground that the stay order passed by the apex court consists of two parts. The first part is staying the judgment of the High Court and to continue the same. The second part which reads. "However the State shall not proceed against the respondent herein for the recovery of the balance of amount due to it". means that the respondent therein shall not be asked to pay the balance amount due to the State. Emphasis has been laid on the word "respondent" and it has been stated that the present petitioner is not "respondent" therein. It has been further stated that the permission vide letter No. 6422 dated March 24, 2004 was granted by the Commissioner concerned for the assessment year 1997-98 (Provincial and Central). The permission for reassessment for the assessment year 1998-99 (Provincial and Central) is still awaited. Further in response to the notices issued by the assessing officer in consequence of the permission granted to it, the petitioner appeared on March 31, 2004 and filed reply. In other words, the petitioner has submitted to the jurisdiction of the assessing authority. By way of supplementary aff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , on the other hand, submits that in view of the authoritative pronouncement of the apex court in the case of Associated Distributors [2008] 15 VST 39; [2008] 7 SCC 409, there is no room for argument that chewing gum and bubble gum are not "confectionery items". These items, according to the judgment of the apex court, were "unclassified items" at the relevant point of time and as such, it is a clear case of escapement of turnover as tax has been levied at lower rate on the commodity in question. Considered the respective submissions of the learned counsel for the parties. The facts are not much in dispute. Chewing gum and bubble gum were taxed at the rate of five per cent in the original assessment proceedings treating them to be items of confectionery. Ultimately, the controversy with regard to rate of tax on these items travelled to the apex court and the apex court by its judgment, referred to above, has held that these items are liable to be taxed at the rate of 10 per cent under relevant notification in the State of U.P. and they are not items of confectionery but are unclassified items. The sole contention of the petitioner is that at the relevant point of time, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is but a clear case of escapement of turnover as these items have been taxed at a lower rate. Learned senior counsel could not dispute that even today a notice for reassessment subject to period of limitation may be issued to tax these items accordingly. But, he maintains that the impugned notices are bad, specially in view of the pronouncement of the apex court in the case of Shree Chamundi Mopeds Ltd. [1992] 3 SCC 1, referred to above. Reference was made to paragraph 10 of the judgment wherein the difference in between an "interim order" staying operation of the order under challenge and a "final order" has been noticed by the apex court. There is no quarrel to the said proposition but its applicability to the facts of the present case is altogether a different aspect. In the case on hand, the appeal has been allowed by the apex court and the interim order by fiction of law stood merged with the final order. Article 141 of the Constitution of India provides that the law declared by the Supreme Court shall be binding on all the courts within the territory of India. It is the duty of every court, High court or subordinate courts and the authorities to follow the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or that the High Court's decision is under appeal before the Supreme Court and in this connection it was held that permitting the assessing authority to take such a view would introduce a judicial indiscipline. The said decision has no application at all. Neither there is any similarity with regard to the facts or the principle involved herein. The said decision rests on a different factual and legal set up and has no application even remotely. Here, there is no question of any judicial indiscipline in as much as the Act authorises to seek permission for reopening a concluded assessment after the expiry of normal period of limitation by sending a proposal to the concerned Commissioner and the concerned Commissioner, after examination of the proposal and attending facts of the case, may or may not grant permission/ sanction within the parameters of section 21(2) of the Act. Noticeably, the question of jurisdiction to initiate reassessment proceedings was not a subject-matter in issue in the case of K.N. Agrawal [1991] 189 ITR 769. Lastly, reliance was placed on the proposition in the case of Mohinder Singh Gill v. Chief Election Commissioner AIR 1978 SC 851 that the reasons ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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