2013 (12) TMI 1026 - HC - VAT and Sales Tax

Validity of notice under Section 21(2) of the U.P. Trade Tax Act - Reassessment of tax liability on the ground that tax at the rate of 4% after rebate under the notification was permissible only up to 14.2.2005 and for the turnover thereafter it was leviable at the rate of 8% - Held that - The issue as to whether the case of the assessee/revisionist is covered by the exception clause is again a matter which can be decided by the assessing authority during reassessment - the revision does not involve any question of law and the order of remand causes no prejudice to the assessee/revisionist - Decided against assessee.

Issues:
1. Validity of notice issued under Section 21(2) of the U.P. Trade Tax Act.
2. Jurisdictional error in the notice and subsequent reassessment proceedings.
3. Legality of the reassessment order and the remand by the first appellate authority.
4. Impact of time limitation on reassessment proceedings.
5. Applicability of relevant case laws and their interpretation in the present case.

Issue 1: Validity of notice under Section 21(2) of the U.P. Trade Tax Act
The Additional Commissioner issued a show cause notice under Section 21(2) for reassessment, claiming that tax at 4% was only valid until a specific date. The argument raised was that the notice itself was bad due to jurisdictional errors. The Tribunal modified its order to consider the validity of this notice in reassessment. The Court held that the validity of the notice can be addressed by the assessing authority during reassessment, and it need not be decided at the revisional stage.

Issue 2: Jurisdictional Error and Legality of Reassessment
The argument was made that the notice under Section 21(2) was flawed, rendering the reassessment proceedings invalid. The contention was that the entire process was vitiated due to the defective notice. However, the Court emphasized that the assessing authority can address the validity of the notice during reassessment. The first appellate authority set aside the reassessment order, making the legality of the reassessment order irrelevant.

Issue 3: Impact of Remand by the First Appellate Authority
The first appellate authority remanded the matter to the assessing authority for a fresh order, which was challenged by the revisionist. The argument was that the remand was unnecessary due to time limitations on reassessment. The Court held that the question of limitation could be considered by the assessing authority, and without evidence of when the remand order was served, no finding could be made on the limitation issue.

Issue 4: Time Limitation on Reassessment
The revisionist contended that due to time constraints, no reassessment order could be passed post remand. The Court stated that the assessing authority could address the limitation issue based on factual aspects like the date of service of the remand order. Without such information, a finding on the time limitation could not be made.

Issue 5: Applicability of Case Laws
The revisionist cited case laws to support their arguments regarding the validity of the notice and the reassessment proceedings. The Court considered the case laws cited but emphasized that the assessing authority would determine the applicability of these precedents during reassessment. The Court found no merit in the revision, dismissing it without costs.

In conclusion, the High Court dismissed the revision due to the lack of a legal question and found that the remand order did not prejudice the revisionist. The Court highlighted that issues regarding the validity of the notice, jurisdictional errors, reassessment legality, and time limitations could be addressed by the assessing authority during the reassessment process. The Court's decision was based on the understanding that these matters were within the assessing authority's jurisdiction and did not warrant intervention at the revisional stage.

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