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TMI Blog2014 (7) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... on 21(2) of the U.P. Trade Tax Act (hereinafter referred to as "the Act"). The earlier order was set aside as it lacked reasons for granting sanction. After remand again, by the impugned order dated March 23, 2009 permission has been granted under the proviso to section 21(2) of the Act to reopen the assess ment relating to year 1994-95 (U.P.). The background facts are as follows: The petitioner is a trader of broken glass which has been carried in its own account as well as in commission agency. For the relevant assessment year 1994-95 the petitioner had sold broken glass for Rs. 1,30,27,655.45. The said broken glass was purchased within the State of Uttar Pradesh from unregistered dealers in its commission agency business from Kabaries. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt No. 2 has travelled beyond scope of reassessment proceedings. Submission is that so far as the petitioner is concerned, broken glass is not a waste product but is waste material. Elaborating the argument, it was submitted that proposal was given to reopen the assess ment on the ground that the petitioner is deemed manufacturer within the meaning of section 2(ee) of the Act, which has been found not legally correct by the High Court in earlier petition of the petitioner. Having failed to succeed on above point, there is no tangible reason to grant permission and the impugned order is based on conjuncture and surmises. It was also submitted that in the case of the petitioner itself, the matter had travelled up to the Tribunal for the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... To begin with, it may be stated that the assessment of the petitioner was completed by accepting the account books meaning thereby, the case of the petitioner that it has made purchases of the broken glass from Kabaries within the State of U.P., was accepted by the assessing authority. Permis sion was sought and was granted to reopen the assessment on the ground that the petitioner is a "deemed manufacturer" within the meaning of section 2(ee) of the Act, by respondent No. 2, earlier. However, this portion of the order granting permission treating the petitioner as deemed manu facturer has been set aside by this court and the judgment is reported in S. K. Traders, Modi Nagar, Ghaziabad v. Additional Commissioner, GradeI, Trade Tax, Zone, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... feeling that the turnover of the dealer has escaped assessment. There should be some material in possession of the assessing authority to form a belief in good faith that the turnover has escaped assessment; it cannot be merely a pretence. It has been laid down that it is open to the court to examine whether the reasons for the belief have a rational connec tion or a relevant bearing to the formation of the belief and are not extra neous or irrelevant to the purpose of the section 21 of the Act. Belief of assessing authority cannot be purely subjective. It must be held upon rele vant material, howsoever meager. Reasons for the formation of the belief must have rational connection or live link between the material coming in possession of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titute waste material. We are not impressed by this submission, inasmuch as, the words 'waste pro duct' and 'waste material' have different connotations. When we talk of waste product then it is necessary to co-relate that with the manu facturing process of a manufacturer but the same is not necessary in the case of waste material. Anything lying waste may be said to be waste material but they cannot partake the character of being waste products . . ." In the above case, the same entry, i.e., entry No. 32 of the notification 14 dated September 7, 1981 was up for consideration. The said notification is reproduced below: 32 Old, discarded, unserviceable or obsolete machinery, stores or vehicles including waste products excep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Strong reliance was placed on Hotel Balaji v. State of Andhra Pradesh [1993] 88 STC 98 (SC). The aforesaid decision has been considered by a Division Bench in the case of J & J Enterprises [1996] 102 STC 51 (All); [1996] UPTC 471. Point of tax involved in the case of Hotel Balaji v. State of Andhra Pradesh [1993] 88 STC 98 (SC) was of purchase tax. Here, in the case on hand, reasons recorded are with regard to liability of the petitioner, if any, to the trade tax/sales tax and not of purchase tax. The reason does not contain that the purchases made by the petitioner have escaped assess ment. The reasons proceed on the ground that the sale of broken glass is taxable at the hand of the petitioner on the point of sale. Therefore, the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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