TMI Blog2011 (8) TMI 1016X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent for the tax periods 2006-07, 2007-08 and 2008-09, passed on no new or fresh material de hors, the record already available while passing the initial order of assessment dated April 19, 2008, is unsustainable and is accordingly quashed. The writ petition is allowed - W.P. No. 14940 of 2009 - - - Dated:- 24-8-2011 - GODA RAGHURAM AND RAVI SHANKAR N. JJ. Bhaskar Reddy Vemireddy for the petitioner P. Balaji Varma, Standing Counsel for Commercial Taxes, for the respondents ORDER The petitioner is a registered dealer under the provisions of the Andhra Pradesh Value Added Tax Act, 2005 (for short, 2005 Act ) and the Central Sales Tax Act, 1956 (for short, 1956 Act ) and assessed on the file of the first respondent. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the records furnished by the assessee during the earlier occasion of audit up to December, 2007 and with reference to copies of agreements entered into with the lessee, the under-declaration of output tax and misclassification of transactions under the provisions of 2005 Act, during the year 2006-07, were discerned. The petitioner assails the order of reassessment purportedly passed under the provisions of section 21(6) of the 2005 Act on several grounds. For the purpose of adjudicating whether the petitioner is entitled to the relief claimed, i.e., of invalidation of the order of reassessment, suffice it to consider one contention, viz., that the order is vitiated as it is based on no other or fresh material apart from the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of four years from the date of filing of the return. The provisions of section 20 of the 2005 Act thus enumerate the process of filing of returns; acceptance of returns filed on self-assessment basis; powers of scrutiny of returns filed; and power to issue notice to recover any short- payment of tax or for recovery of any excess input-tax credit claimed, being powers of the assessing officer. Several sub-sections of section 21 of the 2005 Act also provide further powers of assessments and reassessment and other house keeping provisions as well. Sub-section (4) of section 21 of the 2005 Act, which is relevant for our purposes, enables the authority prescribed, based on any information available or on any other basis, to conduct a detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r under section 21(4) of the 2005 Act and is susceptible to reassessment under the provisions of sub-section (6). Such order is also susceptible to exercise of the power to review or modify under section 32 and by the revisional authority(s) specified in the said provision. On a true and plain construction of the phraseology of section 21(6) there appears no inhibition for the authority prescribed, i.e., the assessing authority in this case, to reassess the order dated April 19, 2008 which was purportedly passed in exercise of powers under section 21(4), in view of the fact that the assessment order dated April 19, 2008 understated the correct tax liability of the petitioner and since the impugned order dated July 7, 2009 was passed with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect of the observations of the learned Division Bench of this court in Girdharlal Company [1995] 97 STC 442 (AP). This court observed (page 444 in 97 STC): . . . The criterion to judge whether there has been a reasonable exercise of power under the said provision is not whether there was lack of diligence but whether there was lack of material at the time of assessment that necessitated exercise of the power. If necessary material was available on record but the assessing authorities had not adverted to relevant aspect due to lack of diligence, it would not afford a ground to the assessing authority or his successor to exercise power under section 14(4), but if the record did not contain the relevant material which comes to the not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elt out by the several decisions of this court referred to supra, it follows that the power of reassessment under the provisions of section 21(6) of the 2005 Act, cannot be exercised unless material de hors the record on the basis of which an earlier order of assessment was already made in exercise of power under section 21(4), is available. Lack of diligence on the part of the assessing authority in passing the initial order of assessment in exercise of powers conferred under section 21(4), is no justification for a reassessment under section 21(6). In any event, no serious prejudice is caused to the Revenue on account of the absence of diligence in passing the first order of assessment, since the power to revise or modify is available und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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