2009 (11) TMI 842 - HC - VAT and Sales Tax

Remand of the case under section 21 of the U.P. Trade Tax Act - whether the entire assessment could be reopened or only with respect to the transaction which has been alleged to have escaped assessment? Held that - Under the facts and circumstances, it would be appropriate that the matter be remanded back to the Tribunal to decide the issue afresh in the light of the aforesaid judgment of the apex court in the case of Kundan Lal Srikishan 1987 (2) TMI 448 - SUPREME COURT OF INDIA . Revision allowed.

Summary

Issues:
1. Assessment of tax by the assessing authority.
2. Imposition of further tax on allegedly escaped assessment.
3. Reopening of assessment under section 21 of the Trade Tax Act.
4. Interpretation of section 21 for assessment or reassessment.
5. Difference of opinion on reopening the entire assessment or only specific transactions.
6. Remand of the case for fresh decision based on the apex court's judgment.

Analysis:
1. The respondent-dealer admitted tax for a sum but was originally assessed a higher amount. The first appellate authority reduced the tax liability, but the Assistant Commissioner imposed further tax on allegedly escaped assessment. Subsequent appeals and remands resulted in varying tax amounts imposed by the assessing officer, leading to dissatisfaction and further appeals by the Department.

2. The dispute centered around the interpretation of section 21 of the Trade Tax Act, which authorizes the assessing authority to reassess if any part of the turnover has escaped assessment. The Tribunal's decision on whether the entire assessment could be reopened or only specific transactions led to a difference of opinion among the Members, necessitating referral to a third Member.

3. The apex court's judgment in the case of Kundan Lal Srikishan was cited, emphasizing that once a notice is issued under section 21, the original assessment is reopened, and any subsequent order made under section 21 becomes the assessment order for the period in question. The court held that the assessing authority need not pass a separate order to proceed with reassessment, and the order under section 21 itself constitutes the assessment order.

4. Consequently, the High Court allowed the revision, setting aside the Tribunal's order and remanding the matter back for fresh consideration in light of the apex court's judgment. The court directed the Tribunal to decide the issue afresh based on the observations made in the cited case, emphasizing the correct interpretation and application of section 21 for assessment or reassessment under the Trade Tax Act.