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M/s. Gondwana Enterprises Versus State of U.P. And 3 Others

Suo Moto Re-assessment – Assessment order was passed in which rebate of entry tax on sale of forging was granted – Subsequently, notice was issued proposing to make re-assessment and as no reply was received, appropriate authority granted permission to initiate proceedings for re-assessment –Petitioner being aggrieved by issuance of notice and granting of permission, prayed for its quashing – Held that:- if assessing authority has reasons to believe that whole or any part of turnover had escaped .....

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evidence – There was sufficient reasons to believe for assessing authority to seek permission for reopening assessment – No reason to interfere in impugned notice issued – Petition dismissed – Decided against Assesse. - Writ Tax No. - 544 of 2015 - Dated:- 14-7-2015 - Hon'ble Tarun Agarwala And Hon'ble Surya Prakash Kesarwani,JJ. For the Petitioner : N.C. Gupta For the Respondent : C.S.C. ORDER (Per: Tarun Agarwala,J.) Heard Sri N.C. Gupta, learned counsel for the petitioner and Sri C.B. .....

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il, 2013 was passed in which a rebate of entry tax on sale of forging was granted. Subsequently, a notice under Section 29 (7) of the Act was issued proposing to make a re-assessment for the assessment year 2009-10. Since no reply was received, the appropriate authority granted permission to the assessing authority to initiate proceedings for re-assessment under Section 29 of the Act. The petitioner being aggrieved by the issuance of the notice and the granting of the permission by the Additiona .....

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escaped assessment which required issuance of a notice inviting re-assessment. The learned counsel further contended that apart from the fact that there was no fresh material, the issuance of notice was based on the same material which was already existing and, consequently, it was a change of opinion which was not permissible. In support of his submission the learned counsel has relied upon the decision in 2011 TLD (1) Dabur India Ltd, Ghaziabad Vs. State of U.P. and another, wherein the Court .....

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on in M/s Aryaverth Chawal Udyog & others Vs. State of U.P. & others 2008 NTN (Vol. 37) page 231. On the other hand, Sri C.B. Tripathi, the learned counsel for the State has relied upon the decision of Honble Supreme Court in The Commissioner of Sales Tax, U.P. Vs. Bhagwan Industries (P) Ltd., Lucknow AIR 1973 SC 370 which postulated the theory with regard to "reasons to believe" and the rational basis for the assessing authority to form an opinion that the whole or any part of .....

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year 1957-58. Question in the circumstances arises as to what is the import of the words "reason to believe", as used in the section. In our opinion, these words convey that there must be some rational basis for the assessing authority to form the belief that the whole or any part of the turnover of a dealer has, for any reason, escaped assessment to tax for some year. If such a basis exists, the assessing authority can proceed in the manner laid down in the section. To put it differe .....

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and have a nexus with the formation of belief regarding escaped assessment, the assessing authority would be clothed with jurisdiction to take action under the section. If, however, the grounds are relevant and have a nexus with the formation of belief regarding escaped assessment, the assessing authority would be clothed with jurisdiction to take action under the section. Whether the grounds are adequate or not is not a matter which would be gone into by the High Court or this Court, for the su .....

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hat the term "turn over has escaped assessment to tax", which includes under assessment, may as well be as a result of lack of care on the part of the Assessing Officer or by reasons of inadvertence on his part. The Division Bench further held that Section 21 does not prohibit obtaining of information from the material on the record of the original assessment. In Moser Baer India Ltd. Vs. State of U.P. and others 2014 NTN (vol. 55) page 26 another Division Bench held that if the exempt .....

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instant case, we find that in the original assessment proceedings there has been no discussion nor any finding has been given as to whether enzyme is a chemical or not. Unles and until a discussion is made or a finding is given by the Assessing Officer that enzyme is a chemical, only then, it could be taxed under the entry "chemical of all kinds". In the absence of any finding being recorded by the assessing Officer on this aspect, we are of the opinion that the respondents were justif .....

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to be brought into a local area any goods which are- (i) consigned without using them in the local area to any place outside the State; or (ii) sold or re-sold either in the course of inter-State trade or commerce or in the course of export out of the territory of India; EXPLANATION-Section 3, Section 5 and Section 6A of the Central Sales Tax Act, 1956 shall apply for the purpose of determining whether or not any goods has been sold by a dealer in the course of inter-State trade or commerce or i .....

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adjustment of the amount so paid as tax in the month in which such goods are transferred outside the State or sold in the course of inter-State trade or commerce or the course of export, in respect of such goods." From a perusal of the aforesaid it is clear that if the goods are brought into the local area and sold in the same form in the course of inter state trade or commerce, then rebate is permissible. Section 29 (1) of the Act provides as under: "29. (1) If the assessing authorit .....

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may consider necessary, assess or re-assess the dealer to tax according to law : Provided that the tax shall be charged at the rate at which it would have been charged had the turnover not escaped assessment or full assessment as the case may be. Explanation I:- Nothing in this sub-section shall be deemed to prevent the assessing authority from making an assessment to the best of its judgment. Explanation II:- For the purpose of this section and of section 31, "assessing authority" mea .....

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notice." From a perusal of the aforesaid we find that if the assessing authority has reasons to believe that the whole or any part of turnover had escaped assessment or any deduction or exemption had wrongly been allowed, the assessing authority may after issuing a notice to the dealer and after making such inquiry, as it may consider necessary, assess or re-assess the dealer to tax according to law. The words "any deduction or exemptions have been wrongly allowed" would, in our .....

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