1963 (2) TMI 39 - HC - VAT and Sales Tax

Summary

Issues:
1. Liability to assessment under section 21 of the U.P. Sales Tax Act for "escaped assessment."
2. Bar on fresh assessment by time limitations under section 21.
3. Legality of assessment under section 21 without fresh information.

Detailed Analysis:
Issue 1: The court addressed whether the assessee was liable to assessment under section 21 of the U.P. Sales Tax Act for "escaped assessment." The assessee argued that since they had disclosed a turnover in their return, it did not constitute "escaped assessment." However, the court held that section 21 empowers the assessing authority to assess a dealer if any part of the turnover has escaped assessment, even if due to inadvertent mistakes. The court ruled that the language of the Act does not limit the power of the assessing authority only to cases where the dealer conceals information, thus confirming the assessee's liability for assessment under section 21.

Issue 2: The court examined whether a fresh assessment beyond the prescribed period under section 21 was barred by time limitations. The court referred to the second proviso to sub-section (2) of section 21, which allows for assessments made in consequence of orders under sections 9, 10, or 11 to be exempt from the time limitation of four years. The court determined that the assessment in question, made under the direction of the appellate court, was valid and not affected by the period of limitation prescribed in the Act.

Issue 3: The court considered the legality of the assessment under section 21 without fresh information. The assessee contended that the assessment was illegal due to the absence of fresh information. However, the court upheld the assessment, stating that the law does not mandate the necessity of fresh information for making an assessment under section 21. The court found no error in the decision of the Judge (Revisions) to reject the plea regarding the requirement of fresh information for the assessment.

In conclusion, the court answered all three questions raised in the reference, confirming the assessee's liability for assessment under section 21, clarifying the exemption from time limitations for assessments made under court directions, and upholding the legality of the assessment without the need for fresh information. The court directed the assessee to bear the cost of the reference and ordered the dissemination of the judgment to the relevant authorities as per statutory requirements.