2003 (3) TMI 686 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Legitimacy of reassessment notice based on a change of opinion.
2. Jurisdiction of the Commercial Taxes Officer, Anti Evasion, to issue the reassessment notice.
3. Interpretation of the notification dated May 6, 1986, regarding partial exemption of tax.

Detailed Analysis:

1. Legitimacy of Reassessment Notice Based on Change of Opinion:
The appellant challenged the reassessment notice dated April 19, 2001, arguing that reassessment was not permissible on mere change of opinion. The appellant relied heavily on the division Bench judgment in Black Stone Rubber Industries Pvt. Ltd. v. State of Rajasthan, which held that the expression "for any reason" in Section 30 of the Rajasthan Sales Tax Act, 1994, does not include mere change of opinion. The learned single Judge, however, held that the expression "for any reason" is wide enough to include a change of opinion, citing the Supreme Court's decision in Maharajadhiraj Sir Kameshwar Singh's case.

The appellant contended that the learned single Judge erred in not following the binding precedent set by the division Bench in Black Stone Rubber's case, which the State had accepted by not challenging further. The appellant's counsel argued that the learned single Judge should have either followed the division Bench decision or referred the matter to a larger bench for reconsideration.

2. Jurisdiction of the Commercial Taxes Officer, Anti Evasion:
The appellant also contested the jurisdiction of the Commercial Taxes Officer, Anti Evasion, to issue the reassessment notice, arguing that such officers can acquire jurisdiction only in cases of tax evasion detected by them under the relevant notification. The learned single Judge did not provide a specific ruling on this jurisdictional issue.

3. Interpretation of the Notification Dated May 6, 1986:
The appellant sought an interpretation of the notification dated May 6, 1986, which allowed partial exemption from tax payable on inter-State sales. The appellant argued that the benefit of partial exemption should be calculated by excluding levy cement sales, as the control orders regulating the supply and distribution of cement were in force during the base year 1984-85. The appellant contended that the assessing authority had previously excluded levy cement sales while granting the benefit of the notification.

The learned single Judge did not address the interpretation of the notification in the judgment, focusing instead on the broader issue of reassessment based on a change of opinion.

Referral to Larger Bench:
Given the conflicting judgments and the importance of the issues, the division Bench decided to refer the following questions to a larger Bench for consideration:
(i) Whether the expressions "for any reason" and "in any way and under any circumstances" in Section 30 of the Rajasthan Sales Tax Act, 1994, include mere change of opinion.
(ii) Whether the division Bench judgment in Black Stone Rubber Industries' case runs contrary to earlier division Bench decisions and Supreme Court rulings.

The matter was referred to the honourable Chief Justice for the constitution of a larger Bench to resolve these questions.