2008 (3) TMI 744 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether an assessment can be reopened u/s 15 of HPGST Act without new information?
2. Is maize exempt from purchase tax u/s 5(A) of HPGST Act?

Judgment:
The reference was made by the Financial Commissioner (Appeals) to the Government of Himachal Pradesh regarding the issues at hand. The Applicant, Dhani Ram and Sons, a registered dealer, had submitted returns for 1990-91 and 1991-92 which were accepted initially. However, notices were later issued for reassessment under Section 15, resulting in the levying of purchase tax on maize purchased by the Applicant. The Applicant appealed against this decision but was unsuccessful, leading to the current reference.

Issue (i):
The Financial Commissioner (Appeals) noted that the Assessing Authority had no new information for reassessing the tax liability. The basis for reassessment was the existence of a notification from 10th March, 1988, which was not considered during the original assessment. The Court held that ignorance of a notification does not constitute new information for reassessment. Ignorance of the law is not an excuse, and the Assessing Authority should have been aware of such notifications. Therefore, the action of reopening the assessment was deemed unlawful.

Issue (ii):
Regarding the exemption of maize from purchase tax under Section 5-A of HPGST Act, it was found that maize purchased by the Applicant was included in Schedule-B of the Act. As per item No. 26 of Group-D in Schedule-B, agriculture and horticulture produce sold by a person or family member and grown by themselves are exempt from tax. Since the maize was purchased from agriculturists and fell under Schedule-B, it was not subject to tax under Section 5-A. Thus, the second issue was resolved in favor of the Applicant.

The reference was ultimately disposed of in light of the above determinations.