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2013 (8) TMI 91 - HC - VAT and Sales TaxPurchase tax paid in the State of U.P. Reassessment - Adjustment of tax paid on purchase of paddy - it was contended that the authorities below was not justified in initiating the proceedings under Section 21 of the Act, even if there is an escapement of turnover. The authorities should have invoked jurisdiction under Section 10-B of U.P. Trade Tax Act i.e. revisional jurisdiction of the Act - Held that - It is a case where the Assessing Authority has wrongly allowed deduction of tax paid on purchase of paddy while computing the payment of sales tax liability of central sales tax. The assessment order would show that the Assessing Officer did not satisfactorily deal with the point whether such deductions are permissible or not within the meaning of Section 15(c) of the Central Sales Tax Act - Following decision of Gaya Deen Kailash Chand v. State of U.P. & Ors. 2013 (3) TMI 425 - ALLAHABAD HIGH COURT and Satnam Overceas (Export) v. State of Haryana 2002 (10) TMI 361 - SUPREME COURT OF INDIA - Decided against assessee.
Issues:
Challenge to notice for reassessment under Section 21(2) of U.P. Trade Tax Act and subsequent proceedings for Assessment Year 2002-03 (Central). Detailed Analysis: 1. Challenge to Notice for Reassessment: The petitioners contested the notice for reassessment issued by the Addl. Commissioner under Section 21(2) of the U.P. Trade Tax Act for the Assessment Year 2002-03. They argued that the notice was based on a change of mind, which is impermissible under the law for initiating proceedings under Section 21. The petitioners, who were rice millers, had paid purchase tax on paddy bought within U.P. and claimed reduction of tax on inter-state sales of rice based on the tax paid on the paddy during the original assessment for the previous year. They relied on a previous court decision to support their claim that the notice for reassessment lacked a valid basis for initiating proceedings. 2. Interpretation of Section 15(c) of Central Sales Tax Act: The petitioners referred to a court ruling in M/s Aryaverth Chawal Udyog & Ors. v. State of U.P. & Ors., 2008 UPTC 881, which clarified that Section 15(c) of the Central Sales Tax Act allows for a reduction in tax leviable on rice turnover under the U.P. Trade Tax Act based on the tax paid on the paddy from which the rice was procured. This ruling emphasized that the Central Act does not provide for a reduction in tax based on the state law tax on paddy. The court in this case held that the proceedings under Section 21 were initiated without sufficient material to support a belief of escaped assessment, further supporting the petitioners' argument against the reassessment notice. 3. Precedent and Legal Position: The State respondents cited a subsequent court decision in Gaya Deen Kailash Chand v. State of U.P. & Ors., which affirmed that the purchase tax paid in U.P. cannot be adjusted against central sales tax, aligning with the position established in earlier judgments. The court reiterated that the law clearly states that the tax levied on paddy in the state should be reduced from the tax on rice produced from that paddy. This interpretation was crucial in determining the validity of the reassessment notice and subsequent proceedings. 4. Court's Conclusion and Dismissal of Writ Petition: In light of the legal interpretations and precedents, the court concluded that the Additional Commissioner had not erred in granting permission for reassessment and that the notice for reassessment was valid. The court emphasized that the Assessing Officer's correction of a mistake regarding tax adjustment was permissible under the law, and the writ jurisdiction could not prevent such corrections. Consequently, the writ petition was dismissed, and the petitioner's request to participate in the reassessment proceedings was deemed unnecessary as they already had the right to do so. This detailed analysis of the judgment highlights the key legal arguments, interpretations, precedents, and the court's final decision regarding the challenge to the reassessment notice under the U.P. Trade Tax Act for the specified assessment year.
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