2017 (2) TMI 1207 - HC - VAT and Sales Tax

Validity of reassessment proceedings - sale turnover of varnish used in execution of job work for Ex-U.P. dealers has escaped assessment at the hands of the petitioner - change of opinion - Held that - simple change of opinion cannot be a ground to initiate re-assessment proceeding - the petitioner s assessing authority has initiated reassessment proceedings against the petitioner for A.Y. 2010-11 (UP & Central) on a mere change of opinion in the self same facts and evidence as existed at the time of original assessment - the sanction order dated 16.04.2016 and the reassessment notice dated 25.04.2016 issued by the assessing authority of the petitioner are without jurisdiction - petition allowed - decided in favor of petitioner.

Summary

Issues: Challenge to sanction order for re-assessment proceedings based on change of opinion.

Analysis:
The writ petition challenges the sanction order dated 16.4.2016 passed by the Additional Commissioner, Commercial Tax Gautam Budh Nagar Zone, NOIDA, to initiate re-assessment proceedings for the assessment year 2010-11. The petitioner asserts that the re-assessment proceedings were initiated on a simple change of opinion, as the issue regarding the sale turnover of varnish used in job work had already been examined in the original assessment proceedings. The assessing authority had treated the varnish as sold in interstate trade against Form 'C' and taxed accordingly at 2%. The petitioner argues that no new material or information justifies the re-assessment.

The Court notes that the assessing officer was aware of the transaction details during the original assessment and had consciously taxed the varnish at 2% for interstate sale. The sanction order for re-assessment does not present any new material or information to warrant a change in opinion. The Court cites a recent Supreme Court decision emphasizing that a mere change of opinion without new material is not a valid ground for re-assessment. The Court finds that the re-assessment proceedings were initiated solely on a change of opinion without any new evidence or legal basis, rendering the sanction order and reassessment notice without jurisdiction.

In light of the above analysis, the Court quashes the sanction order dated 16.4.2016 and the reassessment notice dated 25.4.2016 for the assessment year 2010-11 (U.P. and Central). The writ petition is allowed, and no costs are imposed.