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Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2024 (8) TMI HC This

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2024 (8) TMI 519 - HC - VAT and Sales Tax


Issues:
Reopening of assessment based on subsequent judgment in tax case.

Analysis:
The revisionist, an authorized dealer of Vikram Three Wheelers, had paid tax on purchases during the Assessment year 1999-2000. Subsequently, a notice was received invoking Section 21(2) of the Trade Tax Act to show cause for reopening the assessment based on the fabrication and mounting of bodies on Three Wheeler Chassis. The Additional Commissioner approved a fresh assessment, including taxing spare parts replaced during warranty based on a Supreme Court judgment. Appeals to the first appellate authority and Commercial Tax Tribunal were rejected, upholding the second assessment order.

The revisionist challenged the reopening of assessment under Section 21(2), arguing that it lacked a rational basis and the judgment invoked was not applicable retrospectively. The revisionist cited the Rathi Industries case to support their argument. The Standing Counsel opposed, citing the Mohd. Ekram Khan case where the Supreme Court held that replacing spare parts during warranty constituted a sale liable for tax under the U.P. Trade Tax Act.

The Court considered whether the assessment could be reopened based on the subsequent judgment in the Mohd. Ekram Khan case. Referring to the M/s Samsung India Electronics case, the Court held that assessments should not be disturbed based on subsequent judgments. Citing the Simplex Concrete Piles case, the Court reiterated that once the limitation period for reopening assessments had expired, the Department could not reopen based on subsequent legal positions. Consequently, the Court found the reassessment initiated based on the Supreme Court judgment to be improper and without jurisdiction, setting aside the impugned order dated 20.09.2012.

 

 

 

 

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