Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (11) TMI 1429 - DELHI HIGH COURT

2015 (11) TMI 1429 - DELHI HIGH COURT - [2016] 89 VST 182 (Del) - Validity of reassessment proceedings - Whether the Tribunal was justified in upholding the reassessment orders when before issuing the notice in form ST-15, no reasons have been indicated/recorded by the Ld. VATO on the order sheet - Held that:- VATO was authorised to reopen the assessment, it is plain that the jurisdictional requirement under Section 24 (1) of the DSTA that reasons must be recorded by the VATO himself, as the off .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eassessment proceeding. It goes to the very root of the matter since what is sought to be done under Section 24 of the Act is to re-open an assessment. - Court concludes that in the present case the jurisdictional requirement of the VATO having to record the “reasons to believe” preceding the issuance of the show cause notice to the Assessee under Section 24 (1) DSTA was not complied with. Consequently, the entire re-assessment proceedings are bad in law. - Impugned order is set aside - Decided .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

se appeals by the Assessee under Section 81 of the Delhi Value Added Tax Act, 2004 read with Section 45 of the Delhi Sales Tax Act, 1975 ( DSTA ) are directed against the impugned common order dated 9th/13th July 2010 passed by the Appellate Tribunal Value Added Tax ( AT ) under Section 43 (6) of the DSTA read with Section 9 of the Central Sales Tax Act, 1956 ( CSTA ) for Assessment Years (AYs) 2000-01, 2001-02 and 2002-03. Background Facts 2. The brief facts leading to the present appeals are t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

returns by using false C forms and evading taxes. The said complaint was forwarded by the Commissioner, Value Added Tax to the Deputy Commissioner under cover of a letter dated 14th June 2007. 4. On 10th July 2007 a show cause notice was issued by the Value Added Tax Officer ( VATO ), Ward-90 to the Appellant-Assessee stating that a complaint had been received regarding gross irregularities committed by it in the AY 1999-00 pertaining to sales of zips and buttons. The allegations in respect of t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

omplaint and sought an adjournment. Further time was sought on 28th August 2007. On 10th October 2007 the following order was passed by the VATO: As per direction of higher authorities assessment order for the year 2000-01 examined and observed that it is a fit case to reassess under Section 24 of the DST Act 1975 (Repeated) according S.T 15 issued for 29th October 2007. 6. A similar order was passed in respect of AYs 2001-02, 2002-03. The further proceedings resulted in reassessment orders bein .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

13th July 2010. Aggrieved by the aforementioned order of the AT, the Assessee has filed the present three appeals. Questions of law 8. On 2nd January 2011, this Court framed the following questions of law for consideration: (i) Whether the Tribunal was justified in upholding the reassessment orders when before issuing the notice in form ST-15, no reasons have been indicated/recorded by the Ld. VATO on the order sheet? (ii) Whether the reassessment proceedings in terms of Section 24(2)(b) are not .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o reasons to believe were formally recorded by the VATO on the file prior to initiating the proceedings under Section 24 of the DSTA. All that was stated in the order dated 10th October 2007 was that the assessment was being reopened as per direction of higher authorities. After it became apparent to the Court that there was no order of the VATO separately recording the reasons to believe , learned counsel for the Respondent was asked to produce before the Court the relevant file notings. The or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

(1) DSTA. 10. Section 24 (1) DSTA states that where, after a dealer has been assessed under Section 23 of the DSTA, the Commissioner has reasons to believe that the whole or any part of the turnover of a dealer in respect of any period had escaped assessment to tax then the Commissioner may reopen the assessment by issuing a notice to the dealer and after giving the dealer an opportunity of being heard proceed to determine the tax payable to the best of his judgment. The power of the Commissione .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rnover of a dealer in respect of any period had escaped assessment to tax, was not complied with. All that was said by the VATO was that he was issuing notices for reopening of the assessment under Section 24 (1) DSTA as per direction of higher authorities. This is not a mere procedural irregularity that can be condoned by remanding the matter to the VATO for a fresh reassessment proceeding. It goes to the very root of the matter since what is sought to be done under Section 24 of the Act is to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

used in the statute are reason to believe and not reason to suspect . The expression reason to believe postulates belief and existence of reasons for that belief. It postulates that the assessing officer holds the belief induced by the existence of reasons for holding such belief. 13. In Samagya Consultants (P) Ltd. (supra), since the notice for reopening the assessment was issued without recording such reasons, it was held to be indefensible . The matter travelled up to the Supreme Court and t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Circular No.7 of 2001-02 dated 3rd March 2001 has been issued by the Commissioner of Sales Tax after the judgment in Samagya Consultants (P) Ltd. v. CST (supra) to the following effect: Therefore it is emphasised upon all the Assessing Authorities that the aforesaid observations of the Hon ble Delhi High Court be strictly adhered to and before issuing the notice in form ST-15 under the aforesaid provision of Section 24, the reasons therefore invariably recorded in the Order-Sheet. Non-complianc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

culars issued by governmental authorities are binding upon the subordinate authorities. There is absolutely no reason, in this particular case, for the respondents to act in a manner contrary to the Circular issued by the Commissioner. That apart, we have gone through M/s. Samagya Consultant Pvt. Ltd. The Division Bench has specifically recorded that there must be an existence of reason on which belief is founded before a notice is issued. It is not necessary for the notice to state the reasons, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

uite clearly not a plenary power, even though the power is wide. Therefore, it is mandatory upon the Assessing Officer to have some material on record and also to consider that material and thereafter record reasons why a completed assessment is sought to be reopened. 16. The above legal position was reiterated in the decision dated 17th August 2007 in Writ Petition (Civil) No. 6545 of 2002 (Prashant Software Ltd. v. Commissioner of Sales Tax). It was again observed as under: This is an extremel .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rculars that there must be a record of the reasons. Otherwise, it is impossible for any Assessee to know why the assessment was reopened or what prompted the assessing authority to initiate the action taken by it. Even a court which is called upon to judicially review the decision of the assessing authority to reopen the assessment would be unable to fathom the reasons, if they are not recorded anywhere. 17. In light of the legal position explained in the above decisions, the Court concludes tha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version