2010 (8) TMI 853 - HC - VAT and Sales Tax

Whether the proceedings have been initiated on account of change of opinion? Held that - In the assessment orders, for the assessment years 1997-98 and 1998-99, the claim of the petitioner that the value of the bottles or poly pouches was not liable to tax, has been considered in details; the facts that the prices of the liquor and the bottles and the poly pouches have been charged separately, have been noticed and on the consideration of the aforesaid facts, the assessing authority had held that the value of the bottles and poly pouches were not liable to tax in view of section 3AB of the Act as the country liquor is exempted from tax. Therefore, the reopening of the proceedings for the assessment years 1997-98 and 1998-99 are only on account of change of opinion and cannot be sustained. So far as the assessment years 1999-2000 and 2000-01 are concerned, learned counsel for the petitioner fairly admitted that the issue has not been considered in the original assessment orders, therefore, reopening of the proceedings under section 21 of the Act cannot be said to be on account of change of opinion inasmuch as no opinion has been expressed in the order. It is settled principle of law that each year is a separate assessment year for the purposes of assessment. Writ petition is allowed in part

Summary

Issues Involved:
Challenge to reassessment proceedings under U.P. Trade Tax Act for multiple assessment years, validity of circular directing tax on poly pouches, grant of approval under section 21(2) of the Act, application of section 3AB to packing materials, initiation of proceedings on change of opinion.

Reassessment Proceedings:
The petitioner sought writs to quash reassessment proceedings under U.P. Trade Tax Act for assessment years 1997-98 to 2000-01. The petitioner claimed exemption on packing materials for country liquor sales based on the exemption of the liquor itself. The assessing authority approved proceedings under section 21 of the Act due to separate billing for packing materials. The Additional Commissioner granted approval without detailed reasons, leading to a challenge on the basis of change of opinion.

Grant of Approval under Section 21(2):
The Additional Commissioner's approval under section 21(2) of the Act was challenged for lack of detailed reasons. The court noted that the Additional Commissioner need not provide separate reasons but must apply mind before granting approval. Citing precedent, the court held that the Additional Commissioner's satisfaction suffices for approval under section 21(2).

Application of Section 3AB to Packing Materials:
The issue revolved around the application of section 3AB of the Act to packing materials when prices for liquor and packaging were separately charged. Relying on precedent, the court held that section 3AB applies only when a composite price is charged for goods and packaging. The court upheld the legal correctness of the circular directing tax on poly pouches.

Initiation of Proceedings on Change of Opinion:
For assessment years 1997-98 and 1998-99, the court found that the proceedings were reopened due to a change of opinion, as the issue of taxing packing materials had been considered in detail in the original assessment orders. However, for assessment years 1999-2000 and 2000-01, where the issue was not addressed in the original orders, the court deemed the reopening valid as no opinion had been expressed.

Judicial Precedent and Conclusion:
The court relied on judicial precedent to determine the validity of the reassessment proceedings and the application of section 3AB to the case at hand. The judgment highlighted the importance of considering each assessment year separately. Ultimately, the court allowed the writ petition in part, quashing notices for certain assessment years while upholding them for others based on the specific circumstances and legal principles involved.

This detailed analysis of the judgment addresses the various issues raised in the case, providing a comprehensive overview of the court's reasoning and conclusions on each aspect of the legal dispute.