2010 (8) TMI 841 - HC - VAT and Sales Tax

Change of opinion - Approval under the proviso to section 21 of the U.P. Trade Tax Act to initiate the proceeding beyond the normal period of limitation for the assessment year 1997-98 challenged Held that - A perusal of the original assessment order reveals that the petitioner had not disclosed the import of diesel from outside the State of U.P. and had not disclosed its supplies to the transporters against the price. Therefore, this aspect of the matter had not been considered at all in the original assessment order. After passing of the assessment order a survey made by the S.T.O. (SIB) on March 31, 2000 in which certain books of account had been seized and on inquiry it was found that the petitioner had imported diesel and had supplied such diesel to the transporters and for which received the price. Therefore, it is not the case of change of opinion. Appeal dismissed.

Summary

Issues:
Challenge to order granting approval for proceeding beyond normal limitation period under U.P. Trade Tax Act for assessment year 1997-98.

Analysis:
The petitioner challenged an order granting approval to re-open proceedings beyond the normal limitation period for the assessment year 1997-98 under the U.P. Trade Tax Act. The assessing authority sought approval to re-open the proceedings based on the discovery that the petitioner had purchased diesel from outside the State of U.P. and provided it to transporters for the transportation of sugarcane, which was considered a sale. The Additional Commissioner, Grade 1, Trade Tax, after providing an opportunity to the petitioner to respond, granted approval for the re-opening of proceedings. The petitioner contended that supplying diesel to transporters did not constitute a sale as it was for transporting own sugarcane. However, the standing counsel argued that the petitioner did not disclose these transactions during the original assessment, and the seized documents revealed otherwise.

The High Court noted that the original assessment did not address the import of diesel and its supply to transporters by the petitioner. The information obtained from a survey conducted by the S.T.O. (SIB) formed the basis for believing there was an escaped assessment. The Court held that the approval granted by the Additional Commissioner and the subsequent notice issued by the assessing authority were justified. The Court emphasized that the issue of whether supplying diesel to transporters constituted a sale was not adjudicated in the original assessment and could be raised by the petitioner in the reassessment proceedings. The Court concluded that the writ petition lacked merit and dismissed it without costs.

In summary, the judgment upheld the approval for re-opening proceedings beyond the limitation period based on new information regarding the petitioner's transactions involving diesel supply to transporters. The Court emphasized the importance of addressing undisclosed transactions and allowed the petitioner to present arguments regarding the nature of these transactions during reassessment proceedings.