TMI Blog2022 (9) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... passed exparte does not disclose the reason for the rejection of the objections of the petitioner that it is entitled to claim ITC for the work done by Azko Nobel as a job worker falling within the definition of manufacturer under Section 2(u) of the VAT Act. The reassessment order is simply a reiteration of the statement made in the notice dated 02.03.2022 seeking explanation of the petitioner and the sanction order dated 08.03.2022. It is evident from the record that the petitioner has given a categorical reply to the notice dated 02.03.2022 wherein various objections have been raised with regard to the claim of ITC made by the petitioner and the jurisdiction of the department to initiate reassessment proceedings. None of the objections have been considered by the respondent No.2 in the order impugned. Without entering into the merits of the claim, noticing that adequate opportunity of hearing has not been provided to the petitioner and the exparte order dated 30.03.2022 does not reflect the mind of the adjudicating authority, the reassessment order dated 30.03.2022 is being set aside being violative of the principle of natural justice, being a non-speaking order having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer of physical possession of land of Azko Nobel, the Central Excise/Service Tax registration is with the Akzo Nobel whereas the petitioner is registered under the Trade Tax/Entry Tax. Thus, post the manufacturing of goods by 'Akzo Nobel', the goods were sold by the petitioner on which the applicable VAT was discharged by the petitioner. It is stated that the activity undertaken by the job worker qualified as manufacturer by dealer and hence the petitioner fell within the definition of manufacturer under the relevant provisions of U.P. VAT Act. It is then contended that after obtaining registration under the U.P. VAT Act, the petitioner had legally claimed the Input Tax Credit (ITC) including ITC on capital goods as per the provisions of Section 13 of the UP VAT Act. The compliance of the provisions of the Central Excise Act was done by the processor 'Akzo Nobel'. It is claimed that the petitioner being included under the definition of manufacturer under Section 2(u) of the U.P. VAT Act had validly claimed input tax credit on capital goods used in the process of manufacture in the instant case. The annual return filed by the petitioner as prescribed under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e till 21.03.2022 directing the petitioner to appear before the respondent No.2 with the books of account and evidence to explain as to why the input tax credit claimed by it for the financial year 2013-14 be not reversed back. It was also intimated that in case the petitioner remained absent the matter would be decided exparte on the basis of the material on record. On the adjournment sought by the petitioner the matter was posted on 25.03.2022. On the said date, the petitioner moved an adjournment vide application dated 25.03.2022 stating therein that it required time for 7 days to submit reply to the reassessment notice dated 10.03.2022. The request for adjournment was rejected by the respondent No.2 on 29.03.2022 on the ground that the last date to decide the matter was 31.03.2022. The exparte reassessment order was passed on 30.03.2022 raising demand of Rs.45,78,518/- by way of reassessment for the financial year 2013-14. Challenging the reassessment order, the arguments of the learned counsel for the petitioner are two folds; firstly, it is argued that the case was reopened for the financial year 2013-14 solely on the basis of the SIB investigation, report of which was nev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng for the revenue namely respondent Nos.2 3 vehemently argued that in view of the challenge made by the petitioner, three issues may arise for consideration, namely (i) whether the reassessment proceedings initiated by the respondent No.2 was an outcome of the change of opinion; (ii) whether there was a reason to believe before the sanctioning authority to grant sanction to reopen the case for assessment under Section 29(1) of the U.P. VAT Act and lastly (iii) whether the decision taken by the respondent No.2 is a result of non application of mind on its part. It is argued that the petitioner had deliberately avoided the proceedings before respondent No.2 in order to ensure that the limitation for reassessment for the financial year 2013-14 expires and no reassessment may be done after the last date that was 30.03.2022 in the present case. It is then contended that the petitioner could have moved an application for setting aside the exparte assessment order in terms of the proviso to Section 32 of the U.P. VAT Act and moreover, the appeal under Section 55 of the U.P. VAT Act is an effective remedy to challenge the reassessment order. Since both the above legal provisions woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 10.03.2022. Even otherwise, the order which has been passed exparte does not disclose the reason for the rejection of the objections of the petitioner that it is entitled to claim ITC for the work done by Azko Nobel as a job worker falling within the definition of manufacturer under Section 2(u) of the VAT Act. The reassessment order only states that on an investigation made by the SIB for the financial year 2014-15 and on inspection of the business unit of the petitioner it was found that it was not a manufacturing unit and the petitioner got the work done through a job worker getting the good manufactured by another manufacturing unit and hence it is not entitled to claim ITC on the purchase of capital goods. It was further recorded that despite sufficient opportunity given to the petitioner, the books of accounts were not placed before the respondent No.2 to verify the ITC claimed by the petitioner and the petitioner had deliberately avoided the reassessment proceedings before the respondent No.2. Besides the above reasoning, there is no deliberation on the entitlement of the petitioner. The reassessment order is simply a reiteration of the statement made in the notice da ..... X X X X Extracts X X X X X X X X Extracts X X X X
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