2012 (3) TMI 381 - HC - VAT and Sales Tax

Authorization granted to the assessing authority for reassessment challenged - Held that - In the present case, the Commissioner has passed the order on February 15, 2012 granting permission for reassessment in pursuance of which notice was issued by the assessing authority on February 25, 2012 and proceedings before the assessing officer have not yet proceeded any further. We are of the view that ends of justice shall be served in directing the Additional Commissioner to consider afresh and take appropriate decision giving reasons. As far as the submission of learned counsel for the respondent that the Division Bench judgments relied on by the petitioner need to be referred, is not necessary to be considered in fact of the present case where notice was given to the petitioner which was replied and order has been passed recently, i.e., on February 15, 2012. We, however, make it clear that we are not expressing any concluded opinion on the issues raised in the writ petition and the questions are left open. In result, the order dated February 15, 2012 is hereby set aside. Respondent No. 3 is directed to take a fresh decision.

Summary

Issues:
Quashing of order granting permission for reassessment under U.P. Trade Tax Act, 1948 due to lack of reasons in the order by the Additional Commissioner.

Analysis:
The petitioner sought to quash the order granting authorization for reassessment for the years 2005-06 and 2006-07 under section 21(2), proviso of the U.P. Trade Tax Act, 1948. The petitioner had been initially assessed ex parte, but fresh assessment orders were later passed. A notice was issued for reassessment, citing discrepancies in the tax rate applied to the petitioner's products. The Additional Commissioner granted permission for reassessment on February 15, 2012, without providing reasons in the order, leading to the challenge by the petitioner.

The petitioner argued that the Additional Commissioner's order lacked reasoning, despite the petitioner having responded to the show-cause notice. Citing previous Division Bench judgments, the petitioner contended that reasons must be recorded when granting permission under section 21(2), proviso. On the other hand, the State's counsel argued that the assessing authority's reasons suffice for compliance and the absence of reasons in the Commissioner's order does not invalidate the permission. The State relied on apex court judgments to support their stance.

The High Court observed that the reassessment proceedings had not progressed beyond the notice stage. It directed the Additional Commissioner to reconsider the decision and provide reasons for the same. The Court noted that while the Division Bench judgments cited by the petitioner were not directly applicable to the present case, the lack of reasons in the order warranted a fresh decision. The High Court set aside the order dated February 15, 2012, instructing the assessing authority to make a fresh decision after considering the petitioner's reply. The Court clarified that any subsequent order should be issued within the statutory limitation period, without granting any benefit to the petitioner in terms of limitation.

In conclusion, the High Court disposed of the petition, emphasizing the need for the Additional Commissioner to reevaluate the proposal for reassessment with proper reasoning within two weeks from the date of the court's order.