1973 (4) TMI 102 - HC - VAT and Sales Tax

Summary

Issues:
1. Reopening of assessment under section 30 after dismissal of appeal for not filing proof of payment of admitted tax
2. Reopening of assessment under section 21 when the assessment had become time-barred

Analysis:

Issue 1: Reopening of assessment under section 30
The case involved a reference under section 11(3) of the U.P. Sales Tax Act regarding the reopening of an assessment against the assessee for the year 1958-59. The Sales Tax Officer reopened the assessment under section 21 upon finding that turnover from foodgrains sold through a commission agent was not included. The assessee appealed against the assessment order and also applied under section 30 to set aside the ex parte assessment order. The appellate authority allowed the appeal, setting aside the ex parte assessment order and directing a fresh assessment. The main contention was whether the appeal under section 30 could be maintained after the appeal on merits was dismissed for not filing proof of tax payment. The court held that the two remedies against an ex parte assessment order are separate: an appeal under section 9 for turnover/tax and an application under section 30 to set aside the ex parte order. The court cited similar provisions in the Income-tax Act and held that the reliefs under these sections are mutually exclusive. The court rejected the argument that the assessment order had merged with the appellate order, emphasizing that the two proceedings are parallel.

Issue 2: Reopening of assessment under section 21
The second issue raised was whether an assessment under section 21 could be reopened under section 30 when the assessment had become time-barred. The court clarified that in this case, the ex parte assessment order was set aside by the appellate authority, not the Sales Tax Officer, and hence there was no period of limitation for making a reassessment. The court pointed out that there was a misconception regarding the time-barred assessment, as the situation contemplated by the department did not apply in this instance. The court held that the decision in a previous case was not relevant to the current scenario. Consequently, the court did not answer question No. (2) and answered question No. (1) in favor of the assessee, entitling them to costs.

In conclusion, the court provided a detailed analysis of the issues raised regarding the reopening of assessments under sections 30 and 21, emphasizing the distinct nature of the remedies available to the assessee and clarifying misconceptions regarding time limitations for reassessment.