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2019 (8) TMI 1309 - HC - VAT and Sales TaxReopening of assessment - validity of reassessment proceeding under section 29 of the Act - the reassessment proceedings have been initiated against the petitioner to reopen the completed assessment in view of the subsequent judgement of the Apex Court in Larsen and Toubro Limited 2013 (9) TMI 853 - SUPREME COURT . HELD THAT - It is admitted fact that at the time of passing of the original assessment order, the Assessing Authority has taken note of survey report dated 22.09.2009 and thereafter, passed the original assessment order holding that the petitioner is not liable for payment of tax on the material used in the execution of works contract. Once an order, which has been passed and has been confirmed by this Court under the provision of the Act, the case in hand, then in absence of any new material being brought on record, the completed assessment should not have been reopened - The proceeding of reassessment has been initiated on the basis of a subsequent judgement passed in the case of Larsen and Toubro Limited. The Honb'le Apex Court, time and again, has held that completed assessment should not be reopened on the basis of subsequent judgement being given. The present reassessment proceedings have been initiated on the basis of subsequent judgement of the Apex Court, which cannot be used to reopen assessment or disturb past assessment which have been concluded. The Department cannot be authorized to reopen the assessment, which stood closed on the basis of the law as it stood at the relevant time. Petition allowed.
Issues Involved:
1. Validity of the reassessment proceedings initiated under Section 29(7) of the U.P. Value Added Tax Act, 2008. 2. Whether the reassessment was based on a change of opinion. 3. Reliance on the survey report dated 22.09.2009 without notice to the petitioner. 4. Impact of the Supreme Court judgment in Larsen and Toubro Limited on the reassessment proceedings. 5. Finality of the previous assessment orders and their binding nature. 6. Jurisdictional facts and their necessity for reassessment. Detailed Analysis: 1. Validity of the reassessment proceedings initiated under Section 29(7) of the U.P. Value Added Tax Act, 2008: The petitioner challenged the reassessment proceedings initiated by the respondent under Section 29(7) of the VAT Act for the Assessment Year 2009-10. The petitioner argued that the reassessment was based on the Supreme Court judgment in Larsen and Toubro Limited, which was not a valid ground for reopening a completed assessment. The court held that reassessment proceedings should not be initiated based on a subsequent judgment as it would disturb the finality of the past assessments. 2. Whether the reassessment was based on a change of opinion: The petitioner contended that the reassessment was merely a change of opinion by the Assessing Authority, which is not permissible under the law. The court referred to the judgment in Varun Beverages Ltd. Vs. State of U.P. & Others, which stated that reassessment is not permissible if it is based on a change of opinion. The court found that the reassessment in this case was indeed based on a change of opinion, as the same material was considered during the original assessment. 3. Reliance on the survey report dated 22.09.2009 without notice to the petitioner: The petitioner argued that the survey report dated 22.09.2009 was relied upon by the respondent without giving any notice to the petitioner. The court noted that the survey report was considered during the original assessment, and no new material was brought on record to justify the reassessment. The court cited the judgment in Hindustan Liver Limited Vs. R.W. Wadkar ACIT, which emphasized that reasons for reassessment must be clear and based on evidence, and cannot be supplemented by affidavits or oral submissions. 4. Impact of the Supreme Court judgment in Larsen and Toubro Limited on the reassessment proceedings: The respondent initiated reassessment proceedings based on the Supreme Court judgment in Larsen and Toubro Limited, which held that builders are liable for tax on the transfer of material used in the execution of works contracts. The court held that a subsequent judgment cannot be used to reopen completed assessments, as established in previous judgments such as Deputy Commissioner of Income Tax Vs. Simplex Concrete Piles (India) Limited. 5. Finality of the previous assessment orders and their binding nature: The petitioner highlighted that the issue of tax liability on the material used in the execution of works contracts was previously settled by the Tribunal and this Court, and no appeal was preferred by the State against the order. The court agreed that the previous assessment orders had attained finality and should not be reopened in the absence of new material. 6. Jurisdictional facts and their necessity for reassessment: The court emphasized the necessity of jurisdictional facts for initiating reassessment proceedings. It referred to the judgment in Arun Kumar & Ors Vs. Union of India & Ors, which stated that the existence of jurisdictional facts is a sine qua non for the exercise of power by an authority. In this case, the court found that there was no new material or jurisdictional fact to justify the reassessment. Conclusion: The court concluded that the reassessment proceedings initiated on the basis of the subsequent judgment in Larsen and Toubro Limited were not justified. The impugned order dated 30.03.2017 and the consequential notice dated 22.04.2017 were quashed, and the writ petition was allowed. The court also noted the importance of finalizing old pending matters in light of the transition to the Goods & Services Tax (GST) regime.
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