2013 (5) TMI 565 - HC - VAT and Sales Tax

Trade tax on mushroom - petitioner claims that the mushroom purchased is exempted from payment of trade tax being fresh vegetable - reopening of assessment - Held that - The said survey dated 29th November, 2010 is not relevant for the assessment year 2006-07. So far as, the notification dated 10th April, 1999 is concerned, it is find that the mushroom has been excluded from category of fresh fruits and green vegetables. The view taken in the impugned order holding that mushroom is excluded from category of fresh fruits and green vegetables is justified. Whether the mushroom sold by the petitioner was in sealed container or it was packed mushroom is a question of fact which will be examined by the Assessing Authority during reassessment proceedings. It is not appropriate to say anything in this regard at this stage of proceedings. Time and again, it has been said that where there is material in possession of the department to form an opinion that turnover has escaped assessment, proceedings for reassessment can be initiated. However, it shall be open to the petitioner to place all such materials before the Assessing Authority in support of his case that there is no escapement of turnover - NO merit in the present writ petition.

Summary

Issues:
Challenge to sanction order under Section 21(2) of the U.P. Trade Tax Act for the assessment year 2006-07.

Analysis:
The petitioner, a proprietorship firm dealing in the purchase and sale of button mushrooms, challenged the sanction order dated 25th March, 2013, under Section 21(2) of the U.P. Trade Tax Act for the assessment year 2006-07. The Assessing Authority sought permission to reassess the petitioner on the grounds that trade tax on mushrooms had escaped assessment. The Additional Commissioner, after considering the petitioner's reply, granted the sanction for reassessment. The petitioner contended that the mushrooms sold were exempt from tax as they were fresh vegetables, not packed mushrooms. The respondents argued that there was enough material to believe that the turnover had escaped assessment and that mushrooms sold by farmers were exempt, not those sold by traders like the petitioner.

Upon considering the submissions, the Court noted that the authority granting sanction is not required to provide detailed reasons, only brief ones to show the application of mind. The relevance of a survey conducted in 2010 for the assessment year 2006-07 was discussed, with the Court emphasizing that the date of the survey was not crucial. The Court observed that the mushrooms had been excluded from the category of fresh fruits and green vegetables, justifying the view taken in the impugned order. The Court also referred to previous judgments highlighting the authority's role in granting approval for reassessment without delving into detailed reasoning, as long as there was an application of mind based on the assessing authority's reasons and the assessee's submissions.

The Court further stated that the question of whether the mushrooms sold were in sealed containers or packed mushrooms was a factual matter to be examined by the Assessing Authority during reassessment proceedings. The Court reiterated that if the department had material to form an opinion of escaped turnover, reassessment proceedings could be initiated. The petitioner was given the opportunity to present all relevant materials to the Assessing Authority to support their case against turnover escapement. Ultimately, the Court found no merit in the writ petition and dismissed it summarily.