2009 (3) TMI 957 - HC - VAT and Sales Tax

Issuance of notice - escapement of assessment - section 21(2) of the U.P. Trade Tax Act, 1948 - Held that - no reason is available, even the reply of the petitioner has not been referred to and considered. Therefore, we are of the view that the order impugned is to be set aside and accordingly set aside and the matter is remanded back to the Additional Commissioner to pass the order afresh within a period of two weeks from this date - appeal allowed by way of remand.

Summary

Issues involved:
Challenge to sanction/authorization order for reopening assessment and notice issued under section 21(2) of the U.P. Trade Tax Act, 1948 for the assessment year 2002-03.

Analysis:
The petitioner challenged the sanction/authorization order dated February 14, 2009, for reopening the assessment and the notice dated March 4, 2009, issued under section 21(2) of the U.P. Trade Tax Act, 1948. The petitioner argued that there was no material available for the issuance of the notice, and the impugned order by the Additional Commissioner did not contain any material regarding the escaped assessment. The court noted that no reasons were provided in the order, and the petitioner's reply was not considered. Citing previous judgments, the court emphasized the necessity of assigning reasons for granting sanction under section 21(2) of the Act. Consequently, the court set aside the impugned order and remanded the matter back to the Additional Commissioner to pass a fresh order within two weeks.

The court further held that the consequential notices issued by the assessing authority based on the impugned order could not be sustained and were thus quashed. However, the authority was permitted to issue fresh notices after the Additional Commissioner's decision. The court quashed both the sanction/authorization order and the notice issued under section 21(2) of the U.P. Trade Tax Act for the assessment year 2002-03. The judgment concluded by disposing of the writ petition without imposing any costs.

In a concurring opinion, the other judge agreed with the decision and the reasoning provided by the primary judge. The judgment highlighted the importance of providing reasons for granting sanction/approval for initiating proceedings under section 21(2) of the Act. The court emphasized the need for proper consideration of the petitioner's reply and the requirement to set aside the authorization if reasons were not assigned. The judgment reiterated the obligation of the Additional Commissioner to provide reasons while granting sanction and set aside the impugned order, remanding the matter for a fresh decision within a specified timeframe.

Overall, the judgment focused on the procedural requirements under the U.P. Trade Tax Act, the necessity of providing reasons for decisions, and the importance of considering the petitioner's submissions in such matters. The court's decision aimed to ensure fairness and compliance with legal standards in the assessment and reopening of tax-related matters.