TMI Blog2019 (8) TMI 1309X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;le Apex Court, time and again, has held that completed assessment should not be reopened on the basis of subsequent judgement being given. The present reassessment proceedings have been initiated on the basis of subsequent judgement of the Apex Court, which cannot be used to reopen assessment or disturb past assessment which have been concluded. The Department cannot be authorized to reopen the assessment, which stood closed on the basis of the law as it stood at the relevant time. Petition allowed. - Writ Tax No. - 354 of 2017 - - - Dated:- 28-8-2019 - Bharati Sapru And Piyush Agrawal JJ. For the Petitioner : Suyash Agarwal,R.R. Agarwal,Rakesh Ranjan Agarwal For the Respondent : C.S.C. ORDER (DELIVERED BY HON'BLE PIYUSH AGRAWAL, J.) By means of the present writ petition, the petitioner has prayed for issuing a writ of certiorari quashing the sanction order dated 30.03.2017 passed by the respondent no. 1 for the Assessment Year 2009-10 as well as the consequential notice dated 22.04.2017 for the Assessment Year 2009-10 passed by the respondent no. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proceedings for granting permission to reopen the completed assessment may be dropped, as there is no fresh material. The respondent no. 1, by means of the impugned order dated 30.03.2017, granted permission to the respondent no. 2 to reopen the completed assessment on the ground that the petitioner has received booking amount from the prospective purchasers, which amounts to transfer of property in execution of works contract and hence, the turnover of the petitioner has escaped assessment. Further, on the basis of the judgement in Larsen and Toubro Limited (supra), the petitioner is also liable for payment of tax. In pursuance of the order dated 30.03.2017, the impugned reassessment show cause notice dated 22.04.2017 under section 29(7) of the Act has been issued. Hence, this writ petition. We have heard Shri Rakesh Ranjan Agarwal, learned Senior Counsel, assisted by Shri Suyash Agarwal, learned counsel for the petitioner and Shri C.B. Tripathi, learned Special counsel for the respondents. Learned counsel for the petitioner has submitted that admittedly, the petitioner is a builder, who purchases the land from the Developm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment preferred a revision before this Hon'ble Court, which was dismissed on 20.09.2012. It has further been argued that against the judgement and order of this Court dated 20.09.2012, holding that the petitioner is not a dealer and hence, not liable for tax on the material used for execution of works contract, neither any appeal was preferred by the State, nor any material was brought on record showing the order of this Court has been set aside/modified/recalled / stayed by the competent Court. In other words, the Department has accepted the order passed by this Court. It is further argued by the learned counsel for the petitioner that once the issue has been settled inter parties and there is no new material brought on record to suggest otherwise, the completed assessment in disputed, i.e., 2009-10, cannot be permitted to be reopened merely on the basis of change of opinion and therefore, the impugned order dated 30.03.2017 and consequential notice dated 22.04.2017 are liable to be set aside. The counsel for the petitioner has relied upon the judgement of this Court in Varun Beverages Ltd. Vs. State of U.P. Others repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT, reported in (2004) 268 ITR 332 (Bom.) at page 338; wherein, following observation has been made:- 21. The reasons recorded by the Assessing Officer nowhere state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year. It is needless to mention that the reasons are required to be read as they were recorded by the Assessing Officer. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. It is for the Assessing Officer to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. It is for the Assessing Officer to reach the conclusion as to whether there was failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the concerned assessment year. It is for the Assessing Officer to form his opinion. It is for him to put his opinion on record in black and white. The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Thus, not only is the belief of escapement essential but more importantly, it is necessary for the Assessing Authority to record his reason/s as to existence of the belief of such escapement. In Commissioner of Sales Tax Vs. Bhagwan Industries (P) Ltd. (1973) 31 STC 293 (SC) the phrase reason to believe appearing in a similar provision in Section 21 of the U.P, Sales Tax Act, 1948 providing for reassessment was interpreted thus: The words reason to believe in Section 21 of the U.P. Sales Tax Act convey that there must be some rational basis for the assessing authority to form the believe that the whole or any part of the turnover of a dealer has, for any reason, escaped assessment to tax for some year. If there are, in fact, some reasonable grounds for the assessing authority to believe that the whole or any part of the turnover of a dealer has escaped assessment, it can take action under the section. Reasonable grounds necessarily postulate that they must be germane to the formation of the belief regarding escaped assessment. If the ground are of an extraneous character, the same would not warrant initiation of proceedings under the above section. If, howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlying principle is that by erroneously assuming existence of such jurisdictional fact, no authority can confer upon itself jurisdiction which it otherwise does not possess. 75. In Halsbury's Laws of England, it has been stated: Where the jurisdiction of a tribunal is dependent on the existence of a particular state of affairs, that state of affairs my be described as preliminary to, or collateral to the merits if, the issue. If, at the inception of an inquiry by an inferior tribunal, a challenge is made to its jurisdiction, the tribunal has to make up its mind whether to act or not and can give a ruling on the preliminary or collateral issue; but that ruling it not conclusive. 76. The existence of jurisdictional fact is thus sine qua non or condition precedent for the exercise of power by a court of limited jurisdiction. 84. From the above decisions, it is clear that existence of jurisdictional fact is sine qua non for the exercise of power. If the jurisdictional fact exists, the authority can proceed with the case and take an appropriate decision in accordance with law. Once the authority has juri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he prospective buyers after getting the booking amount and in view of the latest judgement in the case of Larsen and Toubro Limited (supra), where it has been held that the material used in the execution of works contract is liable to be taxed as the works contractor enters into the agreement. In the case in hand, the petitioner has issued the letter of allotment to the prospective buyers and was receiving payments in installment, which itself shows that the petitioner has entered into an agreement and therefore, is liable to be taxed, accordingly and the same has escaped to tax at the time of passing the original assessment order. Therefore, the present writ petition is liable to be dismissed. We have perused the record. It is beyond doubt that the reassessment proceedings have been initiated against the petitioner to reopen the completed assessment in view of the subsequent judgement of the Apex Court in Larsen and Toubro Limited (supra). It is admitted fact that at the time of passing of the original assessment order, the Assessing Authority has taken note of survey report dated 22.09.2009 and thereafter, passed the original assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of reassessment has been initiated on the basis of a subsequent judgement passed in the case of Larsen and Toubro Limited (supra). The Honb'le Apex Court, time and again, has held that completed assessment should not be reopened on the basis of subsequent judgement being given. This Court in the case of M/s Samsung India Electronics Pvt. Ltd. Vs. State of U.P. 2 Others , reported in 2017 UPTC 63, in paragraph nos. 11, 14 15, has held as under:- 11. Further, a subsequent judgment cannot be used to reopen assessments or disturb past assessments which have been concluded. [See Para 7, Austin Engineering V. JCIT (2009) 312 ITR 70 (Guj.) Para 4 and 5, Bear Shoes 2011 (331) ITR 435 (Mad.), B.J. Services Co. Middle East Ltd. v. Deputy Director (2011) 339 ITR 169 (Uttarakhand), Sesa Goa V. JCIT 2007 (294) ITR 101 (Bom.), Geo Miller and Co. 2004 (134) Taxmann 552 (Cal)]. Reliance is also placed on the decision of the Hon'ble Supreme Court in MEPCO Industries V. CIT, (2010) 1 SCC 434, where the CIT on the basis of a subsequent decision of the Supreme Court sought to rectify his earlier order. The Hon'ble Court held that this would am ..... X X X X Extracts X X X X X X X X Extracts X X X X
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