TMI Blog2017 (7) TMI 1316X X X X Extracts X X X X X X X X Extracts X X X X ..... , Commercial Tax even to reopen the concluded assessment. It is established that reassessment notice was issued by the State Government on the basis of circular issued by the Commercial Tax Officer as the petitioner did not include the royalty aspect for determination of market value on goods for the purpose of payment of entry tax - it is crystal clear that in the instant case, assessment has been made as per law in force and after the definition of market value is amended with effect from 1-4-2014, and on that basis, circular has been issued by the State Government, the proceeding for reassessment of concluded assessment was initiated and it was concluded making reassessment and taking the amended definition of market value into account, and except the circular of the Commissioner directing opening of reassessment even of concluded assessment on the basis of amendment brought into force from 1-4-2014, there is no fresh/additional material brought on record which can be made basis for reopening the concluded assessment by the assessing officer. The assessing authority has sought to reopen the assessment and made reassessment only on the basis of change of opinion and on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of entry tax for the years 2007-08, 2008-09 and 2009-10 on 24-8-2011, 30-8-2012 and 24-8-2013, respectively, and accordingly, entry tax was paid after taking the matter into appeal. It is the case of the petitioner that thereafter, the State vide the Chhattisgarh Entry Tax (Amendment) Act, 2014, has inserted Section 2(fff) in the Act, 1976 by inserting the new definition of Market Value with effect from 1-4-2014. Thereafter, the Commissioner, Commercial Tax, issued a memo dated 16-6-2014 stating that the definition of Market Value in the Act, 1976 has been explained/clarified by the Amendment Act, 2014 which is made applicable with effect from 1-4-2014 stating that by the cement manufacturers, the amount of royalty is not being included for calculating the entry tax and therefore the cases in which the order for payment of entry tax has been passed, their examination is necessary and thereafter, the cases in which even the assessment order has been passed be reopened in exercise of power conferred under Section 22 (1) of the Act, 2005 and order of reassessment be passed. Thereafter, the Deputy Commissioner, Commercial Tax, on 9-7-2014 finding that he has reason to believe tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntainable in law The petitioner Company deliberately did not include the royalty aspect for determination of market value of goods which may be the cause for occurrence of huge difference in determination of market value. Therefore, the provision for reassessment has been invoked by the competent authority in exercise of the power contained in Section 22 (1) of the Act, 2005. 4. A rejoinder has been filed by the petitioner controverting the averments made in the return. 5. Mr. M.P. Devnath, learned counsel opening the argument on behalf of the writ petitioner, would submit as under: - 5.1) The reassessment proceeding has been initiated on the basis of amended definition incorporated in the Act, 1976 by the Amendment Act, 2014, as the definition of Market Value has been redefined/enlarged and that has been made applicable with effect from 1-4-2014 which is apparent from the fact that thereafter only the memo dated 16-6-2014 has been issued by the Commissioner, Commercial Tax directing all the assessing authorities to reopen the already concluded assessment under Section 22 (1) of the Act, 2005 and to take into account the amount of roy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainable. Reliance has been placed upon the judgment of the Supreme Court in the matter of Union of India and others v. Major General Shri Kant Sharma and another (2015) 6 SCC 773. 2. The assessing authority has rightly reopened and assessed the entry tax in exercise of power conferred under Section 22 (1) of the Act, 2005. In Section 22 (1) of the Act, 2005, reason to believe is not required for reopening the concluded assessment, merely on the subjective satisfaction of the assessing authority, proceeding for reassessment can be reopened and, therefore, it has rightly been reopened. 3. The petitioner itself has suppressed the details with respect to payment of royalty to the Government by which the liability of tax is under assessed/has escaped assessment. ' 7. Mr. Devnath, learned counsel appearing for the writ petitioner, while replying to the submission made by the learned Government Advocate, in his rejoinder submission would submit that the petitioner Company has submitted all the details about royalty which is apparent from page 72 of the paper book and my attention was drawn to page 72 (paper book) in which it has been ment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order prohibiting the Income Tax Officer from proceeding to reassess the income when the conditions precedent do not exist. K.C. Das Gupta, J, speaking for the Supreme Court and delivering the majority judgment held as under: - It is well-settled however that though the writ of prohibition or certiorari will not issue against an executive authority, the High Courts have power to issue in a fit case an order prohibiting an executive authority from acting without jurisdiction. Where such action of an executive authority acting without jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessary harassment, the High Courts, it is well settled, will issue appropriate orders or directions to prevent such consequences The High Court may, therefore, issue a high prerogative writ prohibiting the Income-tax Officer from proceeding with reassessment when it appears that the Income-tax Officer had no jurisdiction to commence proceeding . 11. The principle of law laid down in Calcutta Discount (supra) has been followed with approval by the Supreme Court thereafter in the matter of The Commissioner of Income-tax, Gu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing which would show that it would be a case of palpable injustice to the writ petitioner to force him to adopt the remedies provided by the statute. It was noted by this Court in L. Hirday Narain v. ITO (1970) 2 SCC 355 : AIR 1971 SC 33 that if the High Court had entertained a petition despite availability of alternative remedy and heard the parties on merits it would be ordinarily unjustifiable for the High Court to dismiss the same on the ground of non-exhaustion of statutory remedies; unless the High Court finds that factual disputes are involved and it would not be desirable to deal with them in a writ petition. 13. The enunciation of law laid down in Calcutta Discount Co. Ltd. (supra) reiterated in the matter of The Commissioner of Income-tax, Gujarat v. M/s. A. Raman and Co. AIR 1968 SC 49 by Their Lordships of the Supreme Court has further been followed recently in the matter of Jeans Knit Private Ltd. Bangalore v. Deputy Commissioner of Income Tax Bangalore and it has clearly been held that writ petition filed by the assessee challenging the issuance of notice under Section 148 of the Income Tax Act, 1961 and the reasons which were recorded by the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow that the assessing authority is empowered to reopen the assessment for any reason , if any sale or purchase of goods liable to tax has been under-assessed or has escaped assessment; or has been assessed at a lower rate; or any wrong deduction has been made while making the assessment; or a rebate of input tax has incorrectly been allowed while making the assessment; and is rendered erroneous and prejudicial to the interest of revenue consequent to or in the light of any judgment or order of any Court or Tribunal which has become final. 17. This power under Section 22 (1) of the Act, 2005, cannot be exercised as a matter of course. This power can be exercised only in the circumstances which are specified in the Section. It is a prerequisite that before issuing notice the officer must record the reasons for doing so. This is a sufficient safeguard for an assessee against frequent reopening of concluded assessment by the succeeding officers. The power under this section cannot be exercised merely on a 'change of opinion' on the materials already on record. When all the materials on record were considered and after investigation and enquiry a conclusion has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbit and scope of reassessment has held that existence of a reason that the turnover of dealer escaped assessment or has been under-assessed is a condition precedent to issuance of notice of reassessment under Section 12 (8) of the Act and the existence of such reason is sine qua non for the issuance of notice. Their Lordships concluded in paragraph 8 of the report as under: - 8. Although the opening words used in section 12(8) are if for any reason and not if the sales tax authority has reason to believe , the difference in phraseology, in our opinion, should not make much material difference. A reason cannot exist in vacuum. Somebody must form the belief that reason exists and looking to the context in which the words are used, we are of the view that it should be the sales tax authority issuing the notice who should have reason to believe that the turnover of a dealer has escaped assessment or has been under-assessed. The approach in this matter has to be practical and not pedantic. Any view which would make the opening words of section 12(8) unworkable has to be avoided. It may be noted in this context that in Form VI appended to the rules, which has been pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the garb of re-opening the assessment, review would take place. 7. One must treat the concept of change of opinion as an in-built test to check abuse of power by the assessing officer.... 23. It is well settled law that mere change in opinion/reaching different or divergent view (as to one reached at the time of original assessment) while perusing same material cannot give rise to necessary precondition of reason to believe to reopen concluded assessments and accordingly, reassessment cannot be done on mere change in opinion. The Supreme Court in the matter of State of Uttar Pradesh and others v. M/s. Aryaverth Chawl Udyoug and others has clearly held that discovery of an inadvertent mistake or non-application of mind during assessment would not be a justified ground to re-initiate the concluded assessment and has held in paragraph 31 as under: - 31. In case of there being a change of opinion, there must necessarily be a nexus that requires to be established between the change of opinion and the material present before the assessing Authority. Discovery of an inadvertent mistake or non-application of mind during assessment woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o such reason and thus, on the basis of mere change of opinion concluded that exemption on purchase tax has wrongly been allowed. 26. Similar view has been expressed by the M.P. High Court, as already noticed, in Laduram Ramniwas (supra). 27. Noticing the aforesaid statutory provisions and the principles relating to reopening of concluded assessment emanating from the judgments of the Supreme Court, now, I would proceed to examine the factual matrix of the case in hand in light of those principles and statutory provisions. 28. In the present case, the concluded assessment has been sought to be reopened on the basis of amendment made in the definition of market value as contained in the Entry Tax Act and thereafter, certain directions have been issued by the Commissioner, Commercial Tax even to reopen the concluded assessment. The definition of market value as contained in the Act, 1976, suffered amendment by the Chhattisgarh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar (Sanshodhan) Adhiniyam, 2014 and new definition in shape of Section 2(fff) was introduced explaining/clarifying the earlier definition which has been made affective w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16-6-2014 has been issued which directs reopening of the concluded assessment based on the said prospective amendment. 33. In M/s. Aryaverth Chawl Udyoug 's case (supra), in similar fact situation, Their Lordships of the Supreme Court have clearly held that subsequent change in law according to which the assessment was conducted cannot constitute change in opinion for reopening the concluded assessment. It is impermissible in law when the Act does not specify the operation of law as retrospective. Their Lordships further held that discovery of an inadvertent mistake or non-application of mind during assessment would not be a justified ground to re-initiate proceedings. 34. Further, in the matter of M/s. Reliance Jute and Industries Ltd. v. C.I.T., West Bengal, Calcutta, Their Lordships of the Supreme Court have held that it is a cardinal principle of the tax law that the law to be applied is that in force in the assessment year unless otherwise provided expressly or by necessary implication. 35. Thus, it is crystal clear that in the instant case, assessment has been made as per law in force and after the definition of market value ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
