2013 (4) TMI 125 - HC - VAT and Sales Tax

Reassessment U/s 21 on the ground of escaped assessment - Period of limitation - the assessment was completed by the Sales Tax Officer, Thereafter, the department initiated proceedings under Section 21 of the Act for reassessment on the ground that the turn-over of the petitioner has escaped assessment. - Held that - for initiating reassessment proceedings for the second time, time commences to run from the date of the order of assessment and not from the date of order of reassessment. In this view of the matter, the reassessment proceedings in this case initiated by notice (annexure G) dated 26th December, 1981, must be held to be without jurisdiction. Having regard to the fact, the case on hand, as the order of assessment has not been set aside, the Assessing Authority could not have invoked Section 21(4-A) of the Act. It is not a case of setting aside of assessment order. If the Assessing Authority was of the opinion that the turnover of the dealer has escaped assessment, the proper course was to reopen the assessment if permissible under law, after obtaining permission as provided for in the proviso to Section 21(2) of the Act and not otherwise - The impugned order is bad in law and cannot be allowed to stand & accordingly quashed - All the three writ petitions succeed and are allowed.

Issues Involved:
1. Legality and validity of the reassessment order under Section 21(4-A) of the U.P. Sales Tax Act.
2. Applicability of the limitation period for reassessment.
3. Interpretation of the term "assessment" in the context of Section 21(4-A).

Detailed Analysis:

1. Legality and Validity of the Reassessment Order under Section 21(4-A) of the U.P. Sales Tax Act:
The petitioner challenged the reassessment order issued by the Sales Tax Officer, Mahoba, under Section 21(4-A) of the Act, on the grounds that the reassessment was initiated after the original assessment was set aside by the Deputy Commissioner (Appeal), Sales Tax Kanpur. The main contention was that Section 21(4-A) should apply only when the original assessment order is quashed for want of jurisdiction or similar grounds, which was not the case here.

2. Applicability of the Limitation Period for Reassessment:
The petitioner argued that the reassessment order was issued beyond the prescribed limitation period. According to Section 21(2) of the Act, the limitation for completing an assessment or reassessment is four years. The reassessment order in question was issued after this period had expired, and the petitioner contended that Section 21(4-A) could not be applied retrospectively to extend this limitation period.

3. Interpretation of the Term "Assessment" in the Context of Section 21(4-A):
The court examined whether the term "assessment" in Section 21(4-A) includes "reassessment." The respondents argued that the term should be interpreted broadly to include reassessment. However, the court found that the legislature had used the terms "assessment" and "reassessment" distinctly in different sub-sections of Section 21, indicating that they were intended to have different meanings. The court concluded that Section 21(4-A) applies only to original assessments and not to reassessments.

Judgment:
The court held that the reassessment order issued under Section 21(4-A) was not valid as the original assessment was not set aside for want of jurisdiction or similar grounds. The limitation period for reassessment had expired, and Section 21(4-A) could not be applied retrospectively to extend this period. The term "assessment" in Section 21(4-A) does not include "reassessment," and the proper course for the Assessing Authority would have been to reopen the assessment under the provisions of Section 21(2) after obtaining the necessary permissions.

Conclusion:
The impugned reassessment order was quashed, and all three writ petitions were allowed. The court emphasized that the Assessing Authority could not invoke Section 21(4-A) for reassessment in the absence of an original assessment order being set aside for want of jurisdiction. The limitation period for reassessment must be strictly adhered to, and the term "assessment" in Section 21(4-A) does not encompass "reassessment."

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