2011 (3) TMI 1539 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to notice of reassessment based on entry tax set-off and jurisdiction regarding limitation period for reassessment.

Entry Tax Set-off Issue:
The petitioner, a paper manufacturer, challenged a notice of reassessment seeking to reopen a previous reassessment. The petitioner argued for a set-off in trade tax payment based on entry tax already paid, citing a specific notification. However, the court decided to address the issue of limitation and left the entry tax set-off question for future consideration.

Limitation Period Issue:
The primary issue addressed was the jurisdictional aspect of the notice of reassessment being issued after the expiration of the limitation period. The relevant provision, section 21(2) of the U.P. Trade Tax Act, 1948, stipulates a two-year limitation for making an order of reassessment. In this case, the reassessment order was passed after the deadline, rendering the notice for reassessment without jurisdiction. The court highlighted that the Revenue failed to demonstrate obtaining necessary permission from the Commissioner for reassessment beyond the limitation period. Consequently, the court set aside the notice of reassessment as it was barred by limitation.

Conclusion:
The court allowed the writ petition, setting aside the notice of reassessment due to being issued beyond the limitation period. However, the judgment clarified that if the Revenue is eligible to issue a fresh notice of reassessment, the current decision would not hinder such action.