2010 (9) TMI 983 - HC - VAT and Sales Tax

Summary

Issues:
1. Delay in filing revision application
2. Validity of proceedings under section 21 of the U.P. Trade Tax Act, 1948
3. Legal basis for initiating proceedings under section 21
4. Requirement of show-cause notice before initiating proceedings

Issue 1: Delay in filing revision application
The court noted a delay of 310 days in filing the revision application. The applicant sought condonation of the delay, which was considered by the court. Despite the translation of the impugned order being produced, the court found the revision application to be meritless. Consequently, the court decided not to condone the delay and dismissed the revision application without serving notice on the respondent.

Issue 2: Validity of proceedings under section 21 of the U.P. Trade Tax Act, 1948
The assessing officer had concluded the assessment under rule 41(8) of the U.P. Trade Tax Rules, 1948 based on best judgment. Subsequently, proceedings were initiated under section 21 of the Act due to a change of opinion, not because any amount had escaped assessment. The Tribunal, considering past judgments, allowed the appeal and quashed the proceedings under section 21. The court emphasized that section 21 could only be invoked if the concluded assessment had escaped assessment on other items, which was not the case here.

Issue 3: Legal basis for initiating proceedings under section 21
The court found no legal basis for initiating proceedings under section 21. It highlighted that the initiation was not due to any items escaping assessment but rather because the assessing officer believed a mistake had been made in the best judgment assessment and needed correction. The court emphasized that such a reason did not warrant invoking section 21, especially without issuing a show-cause notice to the assessee.

Issue 4: Requirement of show-cause notice before initiating proceedings
The court stressed the importance of issuing a show-cause notice before initiating proceedings under section 21. It noted that in this case, no such notice was given, and the initiation of proceedings was based on a perceived mistake in the assessment made under the best judgment principle. The court concluded that such actions were not legally permissible, leading to the dismissal of the application for condonation of delay and the subsequent dismissal of the revision application.