TMI Blog2018 (2) TMI 1483X X X X Extracts X X X X X X X X Extracts X X X X ..... any, which was registered under the Delhi Sales Tax Act, 1975 and the Central Sales Tax Act, 1956. During the relevant period in question, i.e., Assessment Year 1995-96, the petitioner was engaged in the business of manufacture and sale of all kinds of ropes, cardage strings and twines. 2. The petitioner impugns the notice dated 9th November, 1999 issued by the Sales Tax Officer for the Assessment Year 1995-96 under Section 24 of the Delhi Sales Tax Act, 1975(Act, for short). 3. In order to avoid prolixity, we are not referring to all contentions and issues, which have been raised in the writ petition as we find that the writ petition can be disposed of and decided in view of the statement made by the counsel for the respondents that the original records relating to the present case have been misplaced or weeded out and hence it is not possible to establish and show that the assessing authority had recorded reasons to believe in writing before issuing notice dated 9th November, 1999 under Section 24 of the Act. 4. Section 24 of the Act reads as under:- 24.Turnover escaping assessment.- (1) Where after a dealer has been assessed under section 23 for any year or p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment under Section 24 of the DST Act is mandatory and the violation of this requirement would result in invalidating the entire reassessment proceedings. The Commissioner has issued the following directions by way of Circular No.7 of 200102 (reported in DSTC N-38 at page 39) in light of the aforementioned decision: It is emphasised upon all Assessing Authorities that the aforementioned 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 on the order sheet. Non compliance will be viewed seriously. 5. Similar view has been taken in Shruti Fasteners Limited versus Commissioner of Value Added Tax, 2015 SSC Online Del 12952 , wherein it has been held:- 9. The narration of facts as noted hereinbefore show that no 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 Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision in Sales Tax Officer v. Uttareshwari Rice Mills 1972 (30) STC 567 and held: the legislative intent is also clear because of the expression used in Section 24 itself i.e. Commissioner has reasons to believe . The powers of the assessing officer to reopen assessment, though wide, are not plenary. The words 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 the Department s appeal was dismissed by an order dated 23rd April 2008, which read: We agree with the view taken by the High Court that in the absence of any recorded satisfaction for re-opening the concluded assessment of the assessee for the year 1996-97 by the assessing authority, the assessment could not be re-opened. 14. In Jagdish Cold Stora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment 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 extremely unfortunate situation where despite Circulars issued by the Commissioner of Sales Tax, the Respondent are bent on asserting that it is not at all necessary that reasons should be recorded before initiating steps to reopen a completed assessment. Apart from a violation of the law, it would be of no avail to an Assessee if it does not know what weighed in the mind of the assessing authority for reopening the assessment. It is for this reason that the Commissioner of Sales Tax issued the above circulars 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Limited versus Sales Tax Officer and Others, 2002 (63) DRJ 604 (DB). Counsel for the respondents, however, submits that the decision in the case of SCJ Plastic Limited (supra) did not notice the scope and ambit of power under Section 49 of the Act. 9. In the facts of the present case we need not decide the controversy relating to Section 49 of the Act for the simple reason that the requirement to record reasons to believe in writing before issue of notice under Section 24 of the Act is a jurisdictional pre-condition which must be satisfied as held by this Court in M/s Classic Engineering Company and M/s Shruti Fasteners Limited (supra). In the absence of reasons to believe recorded in writing, notice under section 24 of the Act would be void and bad in law. Even if we assume, that the order of the Commissioner in the case of M/s Bahubali Plastic Private Limited was an order under section 49 of the Act, the petitioner is entitled to succeed as the mandatory requirement to Section 24, i.e. recording of reasons to believe in writing, is not satisfied. 10. In view of the aforesaid position and as the respondents are unable to show and establish that reasons to believe were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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