2008 (2) TMI 822 - AT - VAT and Sales Tax

Summary

Issues:
Challenging a notice for review of assessment order based on stock transfer claim disallowance.

Analysis:
The petitioner challenged a notice for review of an assessment order dated June 28, 2007, regarding the fourth quarter ending on March 31, 2005, which allowed a stock transfer claim of Rs. 7,48,85,240 to its branch office in Nagaland. The petitioner contended that subsequent information received by the assessing authority cannot be a ground for review under section 83 of the West Bengal Sales Tax Act, 1994. The petitioner cited legal principles and argued that the jurisdiction to review is limited to materials before the assessing authority during the original assessment. The petitioner referenced cases to support the argument that fresh material post-assessment cannot be considered for review.

In a related case, the Tribunal set aside a penalty while upholding the addition to the turnover due to suppression, emphasizing that the power of review is statutory and based on the discovery of new and important facts not previously known. The High Court held that errors discovered based on new material not produced earlier cannot confer jurisdiction for review. This case highlighted the importance of adhering to statutory provisions for review based on new facts.

In another case, the High Court addressed a situation where the Income-tax Officer wanted to rectify the rate of depreciation but concluded that it was not an obvious mistake. The court emphasized that review proceedings should not be initiated for apparent mistakes and must adhere to statutory provisions. The importance of distinguishing between apparent mistakes and substantive issues was underscored in this case.

The assessing officer in the present case issued a notice for review based on a verification report indicating that no form F was issued to the petitioner's branch office in Nagaland. The senior counsel argued that the petitioner made false representations regarding the stock transfer claim, involving both factual and legal errors. The senior counsel contended that the reviewing authority can revise the assessment order based on new evidence in possession, as per the relevant rules.

The legal framework under Rule 249 of the West Bengal Sales Tax Rules, 1995 allows for the reviewing authority to reconsider an assessment order in case of apparent mistakes in fact or law. The senior counsel argued that both factual and legal errors were present in the original assessment, justifying the proposed review. The confirmation that no form F was issued to the branch office invalidated the claim made at the time of assessment, supporting the need for a review.

Ultimately, the Tribunal found that there were valid reasons to uphold the notice for review issued by the assessing authority. The application challenging the review notice failed to succeed, with no costs imposed on either party. The decision was based on the legal framework and the specific circumstances of the case, emphasizing the importance of adhering to statutory provisions and addressing factual inaccuracies in assessment orders.