2017 (5) TMI 928 - HC - VAT and Sales Tax

Validity of reassessment proceedings - change of opinion - material relied upon both for assessment and reassessment had remained the same, and therefore, subsequent view taken in reassessment proceedings was nothing but change of opinion, and was thus not permissible - Held that - the material forming the basis for assessment and also for reassessment are one and the same. It is further apparent that on the basis of such materials, the assessing authority had accepted the claim put forth by the assessee. The reassessment proceedings are also on the basis of same set of materials. In such circumstances, the basis for reassessment could at best be either change of opinion or non-application of mind, both of which would not validate an order of reassessment. Tribunal s view that based upon the same material an order of reassessment would be impermissible being in the realm of change of opinion , does not suffer from an error of law and is maintained - revision rejected - decided against Revenue.

Summary

Issues:
Validity of reassessment order based on change of opinion.

Analysis:
The High Court considered the State's revision challenging the Tribunal's order setting aside a reassessment order due to a 'change of opinion.' The assessing authority initiated reassessment under Section 21 of the U.P. Trade Tax Act, 1948, alleging under-assessment of a commodity. The State contended that the case did not involve a change of opinion but fell under Section 21. The Court referred to a judgment emphasizing that a change of opinion requires two different opinions on the same facts, which was not the case here. The State argued it was a case of non-application of mind, not a change of opinion.

The assessee argued that the material for initial assessment and reassessment was the same, citing various judgments. They contended that a reassessment based on the same material would constitute a change of opinion or non-application of mind, both not justifying reassessment. The Court agreed, citing the Apex Court's judgment that a mere change of opinion without new material does not validate reassessment. The Court highlighted the need for a nexus between the change of opinion and the material present before the assessing authority.

Referring to a Division Bench judgment, the Court reiterated that a reassessment with a different view based on the same material is impermissible. The Court upheld the Tribunal's view that reassessment on the same material amounted to a change of opinion, not a valid ground for reassessment. The revision challenging the Tribunal's decision was rejected, affirming the impermissibility of reassessment based on a change of opinion.

This detailed analysis of the judgment showcases the Court's interpretation of the law regarding reassessment based on a change of opinion, highlighting the importance of consistency in decision-making and the necessity of new material to justify reassessment under the law.