2001 (1) TMI 945 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to reassessment notices issued by Assistant Commissioner, Sales Tax for specific periods.

Analysis:
The petitioner, a firm engaged in manufacturing and sale of welding electrodes, was assessed by the assessing officer for the period October 1, 1986 to September 30, 1987. The main issue during assessment was the entitlement of the petitioner to set-off on tax-paid iron purchased, based on a specific notification. The assessing officer did not grant the set-off initially, leading to a revision filed by the petitioner. The revisionary authority allowed the revision, holding that the petitioner was entitled to a set-off at a specified rate. Consequently, a fresh assessment order was passed granting the benefit of set-off for the mentioned period. Similar assessments were made for subsequent periods, granting set-off based on the earlier revisionary authority's decision.

The assessing officer later issued reassessment notices for the same periods, questioning the earlier grant of set-off. The petitioner challenged these reassessment notices through a writ. The petitioner argued that since the issue of set-off had been conclusively decided in their favor by the revisionary authority, the assessing authority had no jurisdiction to reassess the same issue. The State supported the notices, but the court found merit in the petitioner's argument.

The court held that once the revisionary authority had decided the issue of set-off in favor of the petitioner, and this decision was not challenged further by the State, it became final and binding on the assessing authority. Therefore, the assessing authority had no jurisdiction to revisit the issue of set-off through reassessment notices. As the reassessment notices were solely based on the set-off issue and not any other ground, they were deemed legally unsustainable. Consequently, the court allowed the petition, quashed the reassessment notices, and ordered the refund of any security amount deposited.

In conclusion, the court found that the reassessment notices were without jurisdiction as the issue of set-off had been conclusively decided in favor of the petitioner by the revisionary authority, and the State had not challenged this decision further. Therefore, the assessing authority could not reassess the petitioner on the same issue, leading to the quashing of the impugned reassessment notices.