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2010 (8) TMI 840 - HC - VAT and Sales TaxApproval to initiate the proceedings under section 21 of the U.P. Trade Tax Act beyond the normal period of limitation challenged Held that - On the facts and circumstances, we are of the view that there was material on record to form the belief that there was escaped assessment and, therefore, the initiation of proceeding under section 21 of the Act was wholly justified. However, it will be open to the petitioner to make submission in support of claim of exemption. On the facts and circumstances, we do not find any reason to interfere in the matter at this stage. Appeal dismissed.
Issues Involved:
1. Challenge to the order dated March 6, 2007, by the Additional Commissioner, Trade Tax, Moradabad. 2. Initiation of reassessment proceedings under section 21 of the U.P. Trade Tax Act. 3. Applicability and interpretation of various notifications regarding tax exemptions and rates. Issue-wise Detailed Analysis: 1. Challenge to the Order Dated March 6, 2007: The petitioner, a partnership firm, challenged the order dated March 6, 2007, which approved the initiation of proceedings under section 21 of the U.P. Trade Tax Act beyond the normal period of limitation. The order was passed by the Additional Commissioner, Grade I, Trade Tax, Moradabad Zone, for the assessment years 2000-01, 2001-02, and 2002-03 under the Central Sales Tax Act. 2. Initiation of Reassessment Proceedings Under Section 21 of the U.P. Trade Tax Act: The reassessment proceedings were initiated by the Deputy Commissioner (Assessment), Grade II, Trade Tax, Moradabad, through a notice dated March 8, 2007. The petitioner argued that the sales to manufacturers/dealers of Uttarakhand were either partially or fully exempt under various notifications. However, the Additional Commissioner found that the exemptions were granted without proper basis, thus leading to escaped assessment. 3. Applicability and Interpretation of Various Notifications: Several notifications were discussed to determine the applicability of tax exemptions and rates: - Notification No. KA.NI-2-3915/XI-9(129)/2000-Act-74-56-Order(49)-2000, dated November 23, 2000: This notification provided that sales to dealers in Uttarakhand holding recognition certificates under section 4B of the Act were subject to tax at rates applicable under the U.P. Trade Tax Act, subject to certain conditions. - Notification No. K.A.NI.-2-530/XI-9(231)/94-U.P. Act-15-48-Order-2000, dated February 17, 2000: This notification specified tax rates for various goods sold to manufacturers holding recognition certificates under section 4B. - Notification No. TIF-2-289/XI-9(820)/92-U.P. Act-15-48-Order-99, dated February 12, 1999: This notification provided full exemption from tax on sales to manufacturers holding recognition certificates, provided the manufactured goods were exported outside India. The petitioner claimed that the exemptions were valid under these notifications. However, the court found that the assessing authority had not examined whether the conditions for exemptions under Notification No. TIF-2-289/XI-9(820)/92-U.P. Act-15-48-Order-99 were fulfilled. Specifically, there was no finding that the manufactured goods were exported outside the country, a key condition for the exemption. Court's Conclusion: The court concluded that there was sufficient material to form the belief that there was escaped assessment. Therefore, the initiation of proceedings under section 21 of the Act was justified. The petitioner was allowed to make submissions in support of their claim for exemption during the reassessment proceedings. The writ petition was dismissed. Result: The writ petition was dismissed, and the initiation of reassessment proceedings under section 21 of the U.P. Trade Tax Act was upheld.
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