2014 (10) TMI 940 - HC - VAT and Sales Tax

Validity of re-assessment proceedings - permission u/s 29(7) of the U.P. VAT Act, 2008 - Held that - the Additional Commissioner has granted sanction for re-assessment by the Deputy Commissioner in exercise of the powers conferred on him under section 29 of the Act. The Deputy Commissioner has recorded his satisfaction in this regard - We do not consider it appropriate in this petition to examine as to whether this prima facie satisfaction of the Additional Commissioner is correct as the merit would be examined by the Deputy Commissioner who has issued the re-assessment notice dated 12 September 2014 pursuant to the sanction order dated 23 August 2014 - petition dismissed - decided against petitioner.

Summary

Issues:
Quashing of sanction order under section 29(7) of U.P. Value Added Tax Act, 2008 and notice for re-assessment.

Analysis:
The petitions sought the quashing of the sanction order dated 23 August 2014 and the notice issued for re-assessment under section 29(7) of the U.P. Value Added Tax Act, 2008. The petitioner disclosed the sale of 'tractor hood' for the Assessment Year 2008-09 and admitted tax liability at 4%. Subsequently, a notice was issued proposing rectification as the item was considered taxable at 12.5%. The Additional Commissioner granted sanction for re-opening the assessment, stating that the 'tractor hood' did not fall under the specified entry. The petitioner contended that the sanction was illegal and not based on the Deputy Commissioner's 'reason to believe'. However, the court found the Additional Commissioner's prima facie satisfaction valid for granting the sanction, leaving the detailed examination to the Deputy Commissioner who issued the re-assessment notice. The court dismissed the petition, upholding the sanction order and notice for re-assessment.

The Additional Commissioner's sanction for re-assessment was challenged as being without jurisdiction and not based on 'reason to believe'. The petitioner argued that the 'tractor hood' fell under 'tractor parts and tractor attachment', as previously held by the Assessing Officer. However, the court accepted the Additional Commissioner's observation that the item was an accessory, not an attachment or part of a tractor, and thus taxable at 12.5%. The court noted that the Additional Commissioner acted within the powers conferred by section 29 of the Act and the Deputy Commissioner was satisfied with the re-assessment. The court declined to examine the correctness of the Additional Commissioner's prima facie satisfaction, leaving it for the Deputy Commissioner to determine during the re-assessment process.

In conclusion, the court found no merit in the petition challenging the sanction order and notice for re-assessment under section 29(7) of the U.P. Value Added Tax Act, 2008. The court upheld the Additional Commissioner's sanction, stating that it was validly granted for re-assessment, and deferred the detailed examination of the matter to the Deputy Commissioner overseeing the re-assessment process. The petition was dismissed, affirming the legality of the sanction order and notice for re-assessment.