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2018 (4) TMI 49 - HC - VAT and Sales TaxValidity of reassessment order - Whether the objection raised by Audit party is sufficient in meeting with requirement of section 15 of the Himachal Pradesh General Sales Tax Act 1968 read with Rule 61 so as to enable the assessing authority to frame the reassessment without application of his own mind to the facts and circumstances of the case? - Held that - the issue is no longer res integra for the Hon ble Supreme Court of India in Indian and Eastern Newspaper Society Vs. Commissioner of Income-Tax New Delhi 1979 (8) TMI 1 - SUPREME Court has held that the opinion of an internal audit party of the income tax department on a point of law cannot be regarded as information within the meaning of s. 147(b) of I.T. Act 1961. The order of reassessment dated 24th May 2003 passed by Assessing Authority Solan; order dated 10th May 2005 passed by Additional Excise & Taxation Commissioner-cum-Appellate Authority (South Zone) Himachal Pradeshare quashed and set aside - appeal allowed.
Issues:
1. Interpretation of substantial question of law under Himachal Pradesh General Sales Tax Act, 1968. 2. Validity of reassessment order based on audit objection. 3. Applicability of previous judicial decisions on similar issues. 4. Lawfulness of re-opening the original assessment under Section 15(1) of the Act. Interpretation of Substantial Question of Law: The court considered the substantial question of law in the appeal, focusing on whether the objection raised by the Audit party met the requirements of Section 15 of the Himachal Pradesh General Sales Tax Act, 1968, enabling the assessing authority to frame reassessment without applying their own mind to the case's facts and circumstances. The court noted that a delay of 3 days was not attributable in this case, leading to the pressing of a different substantial question of law. Validity of Reassessment Order: The case involved a reassessment order for the financial years 1995-1996 & 1996-1997 based on an audit objection. The order resulted in the levy of tax, penalty, and interest. Various appeal processes followed, including dismissals and rejection of reference applications. The court analyzed the legality of the reassessment order and found it not in consonance with the provisions of Section 15(1) of the Act. Citing previous judicial decisions, the court emphasized that ignorance of law is not an excuse, and the action of the assessing authority in reopening the original assessment was deemed unlawful. Applicability of Previous Judicial Decisions: The court referenced a Supreme Court judgment regarding the nature and scope of functions of an internal audit organization, emphasizing that the opinion of an internal audit party on a point of law cannot be considered "information" under the Income Tax Act. Additionally, a Co-ordinate Bench decision was cited, highlighting that ignorance of a notification under the Act at the time of original assessment cannot be equated with non-availability of entire information, thus questioning the lawfulness of the reassessment. Lawfulness of Re-opening Original Assessment: Based on the analysis of the substantial question of law and previous judicial decisions, the court allowed the appeal and quashed the reassessment order along with subsequent orders by various authorities. The court concluded that the actions of the assessing authority in re-opening the original assessment were not in line with the provisions of the Himachal Pradesh General Sales Tax Act, 1968. The appeal was disposed of, and all pending applications were also addressed. This detailed analysis of the judgment from the Himachal Pradesh High Court provides insights into the interpretation of legal provisions, the validity of reassessment orders, the impact of previous judicial decisions, and the lawfulness of reopening original assessments under the Himachal Pradesh General Sales Tax Act, 1968.
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