2016 (8) TMI 1373 - HC - VAT and Sales Tax

Reassessment of tax - Section 21 of U.P. Trade Tax Act, 1948 - Change of Opinion - assessment challenged on the ground that assessment was already finalized by Assessing Officer on 01.12.1998 and 24.07.2000 - Held that - Learned Standing Counsel did not dispute that re-assessment proceedings have been initiated only on the basis of subsequent judgment and not otherwise. That be so, it is nothing but a case of change of opinion which does not allow jurisdiction to initiate reassessment proceedings under Section 21 of Act, 1948. Petition allowed.

Summary

Issues:
Challenge to re-assessment under Section 21 of U.P. Trade Tax Act, 1948 for Assessment Years 1994-95 and 1995-96 based on finalized assessment by Assessing Officer and subsequent judgment leading to change of opinion.

Analysis:
The petitioner challenged the order proposing re-assessment under Section 21 of the U.P. Trade Tax Act, 1948, and the notice for Assessment Years 1994-95 and 1995-96, contending that the assessments for these years were already concluded by the Assessing Officer. The respondents did not allege any concealment of facts by the petitioner but relied on a subsequent court judgment to question the concession or exemption granted earlier. The petitioner argued that the re-assessment was initiated solely on the basis of a change of opinion due to the court judgment, which, according to the petitioner, does not justify invoking Section 21 for re-assessment. It was emphasized that re-assessment under Section 21 is permissible only in cases of escape assessment, not on mere change of opinion.

The court noted that the re-assessment proceedings were indeed initiated based on a subsequent court judgment and not due to any new facts or information indicating escape assessment. The court concurred with the petitioner's argument that the re-assessment, in this case, amounted to a mere change of opinion, which does not provide the legal basis for invoking Section 21 of the Act. Consequently, the court held that the re-assessment proceedings under Section 21 were unjustified and lacked jurisdiction. Therefore, the court allowed the writ petition, quashing the impugned order dated 04.03.2002 proposing re-assessment and the notice dated 30.07.2002 for Assessment Years 1994-95 and 1995-96.