TMI Blog2014 (6) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2005 - - - Dated:- 14-5-2014 - Hon'ble Rajes Kumar And Hon'ble Shashi Kant,JJ. For the Petitioner : S. D. Singh,S. P. Gupta For the Respondent : C.S.C. ORDER (Delivered by Hon'ble Rajes Kumar, J.) By means of the present petition, the petitioner is seeking following reliefs: (i) Issue a writ, order or direction in the nature of certiorari and to quash the order dated 28.9.2004 passed by the Additional Commissioner, Grade 1, Trade tax, Agra Range, Agra (Annexure-8) to the writ petition and consequential assessment and demand of tax etc. (ii) Issue a writ, order or direction in the nature of certiorari and to quash part of the order passed by the Joint Commissioner (Appeals), Trade Tax, Agra dated 31.5.2005 (Annexure-10) to the writ petition. The order may be quashed to the extent the Joint Commissioner (Appeals), Trade Tax, Agra has remanded the matter to the assessing authority to pass a fresh reassessment order. (iii) Award cost of this petition to the petitioner. (iv) Pass such order and further writ, order or direction in favour of the petitioner as this Hon'ble court may deem fit and proper in the circumstances of the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 435 such supply comes within the purview of sale. There is a 'reason to believe' that some turnover has escaped the assessment. The date was fixed on 15th March, 2004. On the said date, the petitioner put in appearance and after partial hearing, it was adjourned for 29th March, 2004. It has been further adjourned on the application of the petitioner to 26th April, 2004. When the petitioner could not appear on 26th April, 2004, another notice dated 11th August, 2004 has been issued asking the petitioner to appear alongwith the books of account. Thereafter, an order has been passed by the Additional Commissioner on 28th September, 2004, granting approval to initiate the proceeding beyond the period of four years, invoking the power under proviso to Section 21(2) of the U.P. Trade Tax Act, which is impugned in the present petition. Thereafter, a notice dated 16.10.2004, has been issued by the assessing authority asking the petitioner to appear on 29th October, 2004, in the proceeding under Section 21(2). A show cause notice, dated 10th January, 2005, has also been issued, stating therein that the petitioner has imported building materials etc. against the 1098 declaratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason has been recorded, therefore, the order is bad in law and is liable to be set aside. Further, the order passed under Section 21 has not been served upon the petitioner, however, when the petitioner came to know about the said order, copy of the order has been obtained and the same is being challenged. Reliance is being placed on the decision of Court, in the case of Maniktala Chemicals v. State of U.P. and others, reported in 2006 UPTC 1128 (Paragraph 15), M/s. S.K. Traders, Modi Nagar, Ghaziabad v. Additional Commissioner, Grade-I, Trade Tax, Zone, Ghaziabad and another, reported in 2008, UPTC 392 (Paragraph 49) and M/s. Vikrant Tyres Ltd. v. State of U.P. and others, reported in 2005 UPTC 501. (ii) Further submission is that the the order, which has not been served, cannot be given effect. Reliance is being placed on the decision of the Apex Court in the case of Greater Mohali Area Development Authority v. Manju Jain and others, reported in (2010) 9 SCC 157. (iii) In appeal, the petitioner challenged the order, passed under Section 21(2) by the Additional Commissioner, but the appellate authority has refused to entertain such plea on the ground that the appeal agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cals Ltd. v. Assistant Commissioner (Assessment), reported in 2011 NTN ( Vol. 45) 158 (Paragraphs 24 25). He submitted that in the aforesaid decision, the Division Bench of this Court has considered the decisions cited by the learned counsel for the petitioner. He next submitted that to initiate the proceeding, under Section 21, there must be material on the basis of which a belief is formed that there is escaped assessment and it is not necessary that there should be any concealment on the part of the assessee or that any fresh material should be discovered. On the basis of the materials available on record, proceeding, under Section 21 can be initiated. Reliance is being placed on the decision of the Apex Court in the case of Standard Refinery v. Sales Tax Commissioner, reported in 1963 (14) STC 529 and in the case of Commissioner Sales Tax v. Bhagwan Industries reported in 1973 AIR SC 370. Further, he submitted that, it is not a case of change of opinion. No opinion has been formed in respect of the issue that the substantial building materials have been imported by the petitioner against the declaration form and their use have not been considered in the original assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recorded by the assessing authority, is satisfied that it is just and expedient so to do authorizes the assessing authority in that behalf, such assessment or re-assessment may be made after the expiration of the period aforesaid but not after the expiration of six years from the end of such year or March 31, 2002, whichever is later notwithstanding that such assessment or re-assessment may involve a change of opinion. Provided further that the assessment or re-assessment for the assessment year 1987-88 may be made by March 31, 1993. Provided also that the eligibility certificate granted under section 4-A has been amended or cancelled by the Commissioner under sub-section (3) of section 4-A, the order of assessment or re-assessment may be made within one year from the date of receipt by the assessing authority of the copy of the order amending or cancelling the aforesaid certificate or by March 31, 1995, whichever is later. Provided also that the assessment or re-assessment for the assessment year 1989-90 may be made by March 31, 1995. It would also be appropriate to refer the notice dated 25th February, 2014 and the order passed under Section 21(2), which reads as unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s follows: The approval granted by the Additional Commissioner, Kanpur is not as detailed as one might expect, however, he has approved the proposal sent by the Assessing Officer. It is not necessary on the part of the approving authority to give detailed reasons lest it may be said he had influenced the reassessment proceedings on merit. In the case of Tata Chemicals Ltd. v. Assistant Commissioner (Assessment) (Supra), the Division Bench held as follows: 24. Where the orders under the proviso to Section 21 (2) of the Act challenging period of limitation are based without disclosing any reasons, the same may be challenged on the ratio in Maniktala Chemicals Pvt. Ltd. and S.K. Trader's case. Where, however, petitioner is fully aware of the reasons, which are disclosed in notice under Section 21 and which is the basis on which limitation was extended under Section 21 (2), it is not open to the petitioner to contend after 10 years, that no reasons have been disclosed by the Addl. Commissioner in the order under Section 21 (2) of the Act. 25. The petitioners have neither pleaded nor taken any ground in the amendment application that any notice was required to be give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise the judicial power in strict sense. He is not supposed to adjudicate the issue. He has to satisfy on the basis of reasons recorded by the assessing authority that it is just and expedient to authorise the assessing authority to make the assessment or re-assessment beyond the period of limitation prescribed under Section 21(2) of the Act. What is required under the proviso for granting authorisation by the Commissioner is to satisfy himself on the basis of reason recorded by the assessing authority that whether it is a fit case for granting approval. There should be application of mind. If the reason is available on the record on which the satisfaction is recorded, that would suffice. It is not necessary that the same may be reflected in the order itself. The opportunity is required to be provided for the reason that the reason on the basis of which the approval has been sought and the authority is intending to grant must be communicated to the assessee to get his version. If it is done, the object is achieved. It is always open to the assessee to challenge the validity of the order passed under the Proviso to Section 21(2), notice under Section 21 and further proceeding i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ason to believe under Section 21 was interpreted by the Supreme Court in Commissioner of Sales Tax, U.P. Vs. M/s Bhagwan Ind. (P) Ltd., AIR 1973 SC 370; it was held that the words 'reason to believe' in Section 21 convey that there must be some rational basis for the assessing authority to form the belief that the whole or any part of turn over of a dealer has, for any reason, escaped assessment to tax for some year. If there are, infact, some reasonable grounds for the assessing authority to form such belief, it can take action under the section. Reasonable grounds necessarily postulate that they must be germane to the formation of the belief regarding escaped assessment. If the grounds are of an extraneous character, the same would not warrant initiation of proceedings. 28. In Addl. Commissioner (Legal) Anr. Vs. Assistant Commissioner, Trade Tax, 1999 UPTC 45 SC the scope of the powers under proviso to Section 21 (2) of the Act was under consideration. The Supreme Court held that one may go into the intention of the legislature in enacting such provision. The date of commencement of the proviso does not control its retrospective operation. Under the amended provision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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