2021 (1) TMI 137 - HC - VAT / Sales Tax

Restraint on respondent from initiating any assessment/ reassessment proceedings against the petitioner - Section 29(7) of the U.P. VAT Act, 2008 read with Section 9(4) of the Uttar Pradesh Tax on Entry of Goods into Local Areas Act, 2007 - extended period of limitation - HELD THAT - Relying upon a full bench judgment in the case of M/s Harbilas Prabhu Dayal Vs. Commissioner of Sales Tax, 1979 (2) TMI 176 - ALLAHABAD HIGH COURT this court held that hence proceedings are remanded by the appellate authority, the entire matter is at large. In the background of these facts and the legal position, this court held in para-27, which has been relied by the petitioner in the present case; that reassessment proceedings can only take place when there is an assessment order. Since no assessment order was passed by the Assessing Authority pursuant to the remand order and the entire matter was at large before him, therefore, it was held by this court that there is no question of initiating reassessment proceedings. Thus, the aforesaid judgment in the case of Catalysts 2014 (8) TMI 922 - ALLAHABAD HIGH COURT is distinguishable on the facts of the present case. Perusal of sub-section (7) of Section 29 of the Act, 2008 leaves no manner of doubt that it empowers the Commissioner to grant authorisation and also empowers the Assessing Authority to make assessment or reassessment within a period of eight years after expiry of assessment year to which such assessment or reassessment relates. Sub-section (1) of Section 29 empowers the Assessing Authority to make assessment or reassessment where he has reason to believe that whole or any part of the turnover of a dealer, for any assessment year or part thereof, has escaped assessment to tax or has been under assessed or has been assessed to tax at a rate lower than that at which it is assessable under this Act, or any deductions or exemptions have been wrongly allowed in respect thereof. Thus, where whole of the turnover has escaped assessment on account of not passing an assessment order, the provisions of Section 29(1) of the Act, 2008 can be invoked by the Assessing Authority and the authorisation under sub-section (7) can be granted by the competent authority. It is not incumbent upon the Assessing Authority to make the assessment first and then only to proceed under Section 29(1) for bringing to tax the turnover not assessed. Petition dismissed - decided against petitioner.

Issues Involved:
1. Non-appearance of the petitioner.
2. Validity of the impugned order dated 20.08.2020.
3. Application of Section 29(7) of the U.P. VAT Act, 2008.
4. Interpretation of reassessment proceedings under Section 21 of the U.P. Trade Tax Act, 1948.
5. Distinction of the present case from the Catalysts vs. State of U.P. and others judgment.
6. Applicability of Full Bench judgment in Commissioner of Sales Tax vs. Jag Mohan Nath.

Detailed Analysis:

1. Non-appearance of the petitioner:
The case was listed multiple times (09.12.2020, 14.12.2020, and 15.12.2020) but no one appeared on behalf of the petitioner to press the writ petition. This consistent non-appearance led to the case being adjourned repeatedly.

2. Validity of the impugned order dated 20.08.2020:
The petitioner filed the writ petition to quash the impugned order dated 20.08.2020 and sought to restrain the respondent from initiating any assessment/reassessment proceedings based on that order. The impugned order was an authorization granted by the Additional Commissioner under Section 29(7) of the U.P. VAT Act, 2008, read with Section 9(4) of the Uttar Pradesh Tax on Entry of Goods into Local Areas Act, 2007.

3. Application of Section 29(7) of the U.P. VAT Act, 2008:
Section 29(7) allows the Commissioner to authorize assessment or reassessment within eight years after the expiry of the assessment year if he is satisfied that it is just and expedient. The Additional Commissioner granted this authorization due to the significant turnover of U.P. iron and steel, Ex-U.P. iron and steel, and bitumen that escaped assessment.

4. Interpretation of reassessment proceedings under Section 21 of the U.P. Trade Tax Act, 1948:
The petitioner argued that reassessment proceedings could only take place when there is an assessment order and a reason to believe that there has been a case of no assessment or escaped assessment. They relied on the judgment in Catalysts vs. State of U.P. and others, which held that reassessment proceedings could only occur if there was an existing assessment order.

5. Distinction of the present case from the Catalysts vs. State of U.P. and others judgment:
The court distinguished the present case from the Catalysts judgment. In Catalysts, the assessment order was set aside by the Appellate Authority, and the matter was remanded for fresh assessment. During the remand proceedings, reassessment proceedings were initiated, which the court found inappropriate as the entire matter was at large. However, in the present case, the assessment escaped notice, justifying the invocation of Section 29(7).

6. Applicability of Full Bench judgment in Commissioner of Sales Tax vs. Jag Mohan Nath:
The court emphasized that interpreting the Catalysts judgment as the petitioner suggested would conflict with the Full Bench decision in Commissioner of Sales Tax vs. Jag Mohan Nath. The Full Bench held that assessment proceedings could be made under Section 7(3) and Section 21(1) independently, and it was not necessary to make an assessment first before proceeding under Section 21 for escaped turnover. This principle applies to the present case under Section 29 of the U.P. VAT Act, 2008.

Conclusion:
The court found no substance in the writ petition and dismissed it, affirming that the authorization for reassessment under Section 29(7) was valid. The judgment in Catalysts was distinguishable, and the Full Bench decision in Jag Mohan Nath supported the legality of the reassessment proceedings. The petitioner's objections were not upheld, and the impugned order stood affirmed.

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