2010 (7) TMI 980 - HC - VAT and Sales Tax

Validity of proceedings u/s 21 - inter-State sales through Form C, which were not fount genuine - Held that - there was sufficient material on record for the assessing authority to form a belief of escaped assessment and to initiate the proceeding under section 21 of the Act. The initiation of proceeding under section 21 are accordingly upheld - petition dismissed - decided against petitioner.

Summary

Issues: Challenge to order granting approval for assessment under U.P. Trade Tax Act and Central Sales Tax Act beyond the period of limitation.

Analysis:
The judgment in question involves a challenge to the order passed by the Addl. Commissioner, Trade Tax, granting approval to initiate proceedings under section 21 of the Act for the assessment year 1999-2000 under both U.P. Trade Tax Act and Central Sales Tax Act, beyond the period of limitation. The Addl. Commissioner provided detailed reasons for granting approval, citing discrepancies in the petitioner's submission of Form C for inter-State sales during the relevant year. It was found that the submitted Form C was not genuine and had never been issued to the petitioner, rendering the transactions questionable.

The court emphasized that explanations for such discrepancies cannot be examined in the writ jurisdiction but should be considered by the Assessing Authority during re-assessment proceedings. Despite the petitioner's attempts to explain the discrepancies, the court upheld the initiation of proceedings under section 21, noting that there was sufficient material on record for the assessing authority to believe in escaped assessment and proceed accordingly. The court directed the petitioner to participate in the re-assessment proceedings and present its reply to the assessing authority, expecting the authority to consider the submissions on merits and in accordance with the law when passing re-assessment orders.

Ultimately, the court dismissed both writ petitions, indicating that they were not inclined to interfere in the matter based on the facts and circumstances presented. The petitioner was instructed to engage in the re-assessment proceedings, with the assessing authority expected to evaluate the submissions thoroughly before making decisions in compliance with the law. The interim orders were discharged as a result of the judgment.