2023 (3) TMI 1330 - HC - VAT and Sales Tax

Validity of assessment order - scope of rectification or reassessment and the powers under Section 10-B of the Act - non-entitlement to the amounts deposited towards development charges as the same were charged from the buyer - Tribunal specifically recorded that the material which led to the passing of order in the year 2015 were not available with the Assessing Authority when the assessment was done for the first time in the year 2012. HELD THAT - In view of the law as laid down in the case of M/s. A.K. Corporation 1993 (11) TMI 226 - ALLAHABAD HIGH COURT , it is well settled that the assessment after Section 10-B of the Act proceedings has to be confined to the material on record that were available when the first assessment order was passed, any subsequent material cannot be the basis for reassessment in view of the law laid down - The order of the Tribunal is in consonance with the law, as such the revision filed by the State is liable to be dismissed. Revision dismissed.

Summary

Issues involved:
The issues involved in the judgment are whether the Commercial Tax Tribunal was legally justified in holding that the dealer has not realized the development tax from the customers and whether the powers under Section 10-B of the U.P. Sales Tax Act can be invoked only in the event of opinion formed regarding the illegality and impropriety of the earlier order.

Judgment Details:
The revision was admitted based on the questions of law framed in the memo of revision. The contention was raised that the Tribunal's order was perverse as it did not consider an earlier order relying on four bills. The opposite party argued that the powers under Section 10-B can only be invoked if there is an opinion formed regarding the earlier order's illegality. The facts revealed that an assessment order was passed against the respondent, followed by a revision by the Joint Commissioner under Section 10-B. The Assessing Authority, in a fresh assessment order, considered a complaint with four bills and concluded that the petitioner had charged development charges from buyers. The Tribunal set aside both the Assessing Authority's and the Appellate Authority's orders, stating that only material available at the time of the first assessment should be considered in a reassessment.

The respondent's counsel referred to a previous case to argue that the revisional power must be based on existing material and cannot consider subsequent information. The judgment established that assessment after Section 10-B proceedings must be based on material available during the first assessment, not subsequent material. Consequently, the Tribunal's order was deemed in line with the law, leading to the dismissal of the revision filed by the State. The question was answered against the State and in favor of the assessee.