2021 (3) TMI 1022 - HC - VAT and Sales Tax

Initiation of Reassessment proceedings - sale of diesel, purchased on concessional rate or otherwise to anyone including its contractor or sub-contractor, or not - HELD THAT - In considered opinion of this Court, the fact that the diesel has been sold for consideration, is an assertion of fact by the Assessing Officer and the initial burden thereof lies upon him. The Assessing Officer is obliged to bring at least prima facie evidence before this Court to satisfy that the exercise of jurisdiction is legit, particularly when this Court is seized of the matter and has stayed the proceedings. This Court is of the prima facie opinion that exercise undertaken by the respondents on the allegation that the petitioner Company has sold diesel is not based on any cogent-evidence or material; respondents No.2 to 4 are attempting to conduct a fishing and roving enquiry - powers of reassessment or escaped assessment cannot be exercised in the manner attempted to by the respondents No.2 to 4. Application rejected.

Summary

Issues:
1. Consideration of applications under Article 226 (3) of the Constitution of India seeking vacation of an interim order.
2. Validity of the initiation of reassessment proceedings by the respondent - Assessing Officer.
3. Jurisdiction of the Court to entertain the petitions under Article 226 of the Constitution of India.

Analysis:
1. The judgment dealt with applications under Article 226 (3) of the Constitution of India seeking vacation of an interim order. The respondent - Department argued that the Court cannot exercise its writ jurisdiction as final adjudication is pending, citing various judgments. On the contrary, the petitioner's counsel highlighted that the interim order was granted after due consideration of their submissions, emphasizing the lack of opportunity for a reply.

2. The validity of the initiation of reassessment proceedings by the respondent - Assessing Officer was extensively discussed. The petitioner contended that the reassessment proceedings were arbitrary and a mere change of opinion, as a detailed assessment order had already been passed after thorough examination of records. The petitioner denied selling diesel, which was alleged in the notice, and argued that the notice lacked jurisdiction and should be quashed.

3. The Court analyzed the jurisdiction to entertain the petitions under Article 226 of the Constitution of India. While the respondent - Department failed to provide evidence of the alleged sale of diesel, the Court emphasized that the burden of proof lay with the Assessing Officer. The Court noted that the reassessment proceedings seemed to lack substantial evidence and were akin to a fishing expedition, ultimately rejecting the applications under Article 226 (3) and allowing the interim order to continue.

This detailed analysis of the judgment provides insights into the legal issues involved, the arguments presented by both parties, and the Court's reasoning behind its decision, maintaining the integrity of the original text and legal terminology used in the judgment.