9911796707
TMI Blog2008 (10) TMI 352X X X X Extracts X X X X X X X X Extracts X X X X ..... the Trade Tax Tribunal, Kanpur Bench-1 (in short, "the Tribunal") passed in four connected Second Appeal Nos. 1 to 4 of 2007 for the assessment years 1997-98 and 1998-99 in both the State Act and the Central Sales Tax Act, 1956 (in short, "the Central Act") was contrary to law. The controversy lies within a very narrow compass relating to scope and ambit of section 10B of the Act in the background of section 21 of the Act. A brief reference to the factual aspects would suffice. Orders of assessment were passed for the two assessment years 1997- 98 and 1998-99 on February 27, 1999 and June 17, 2000, respectively. On August 21, 2001 notice for reassessment in terms of section 21 of the Act with authorisation of the Additional Commissioner, Kanpur, under section 21(2) was issued. It is to be noted that for the period during which such notice can be issued is normally two years, but with the approval of the Commissioner it can be extended to four years from the end of the concerned assessment year. The order was passed on May 29, 2003 holding that the notice issued under section 21 was cancelled. In other words, holding that there was no need for any variation in the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 177 (SC). held that once a notice is issued for the purpose of making reassessment, the assessment proceedings become reopened and the initial order of assessment ceases to be operative. In response, learned counsel for the respondent submitted that the High Court has correctly held that in a case where there was large scale of manipulation of accounts, a purposive construction has to be made and the revisional order does not suffer from any infirmity. Levy of tax has been made after holding that the order dropping the proceedings was bad and, therefore, consequentially the assessment of the escaped turnover has been directed to be done. A few provisions which have relevance need to be noted. They are sections 7, 10B, 21 and 22 which read as follows: "Section 7. Determination of turnover and assessment of tax.-(1) Every dealer who is liable to pay tax under this Act shall submit such return or returns of his turnover at such intervals, within such period, in such form and verified in such manner, as may be prescribed; but assessing authority may in its discretion, for reasons to be recorded, extend the date for the submission of the return by any person or class of persons. . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sales Tax (Amendment and Validation) Act, 1978, whichever is latter. . . . Section 21. Assessment of tax on the turnover not assessed during the year.-(1) If the assessing authority has reason to believe that the whole or any part of the turnover of the dealer, for any assessment year or part thereof, has escaped assessment to tax or has been under-assessed or has been assessed to tax at a rate lower than that at which it is assessable under this Act, or any deductions or exemptions have been wrongly allowed in respect thereof, the assessing authority may, after issuing notice to the dealer and making such inquiry as it may consider necessary, assess or reassess the dealer or tax according to law: Provided that the tax shall be charged at the rate at which it would have been charged, had the turnover not escaped assessment or full assessment, as the case may be. Explanation I.-Nothing in this sub-section shall be deemed to prevent the assessing authority from making an assessment or full assessment to the best of its judgment. Explanation II.-For the purposes of this section and of section 22, 'assessing authority' means the officer or authority who passed the earlier assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the reassessment proceedings the original order of assessment becomes inoperative. But Explanation III to sub-section (1) of section 21 makes the position clear that where an order of assessment or reassessment is in existence before the issuance of the notice under sub- section (1) it continues to be effective as such until varied by an order of assessment or reassessment made under section 21 in pursuance of that notice. In other words, an order of assessment or reassessment which was in existence at the point of time the notice was issued, continues to be effective unless it is varied. If it is not varied it goes without saying that it continues to be operative and effective. The period for making assessment or reassessment is provided in sub-section (2) of section 21. The period fixed for making assessment or reassessment under any provisions of the Act for any assessment year is two years from the end of the concerned assessment year. However, this period can be extended in terms of the proviso to sub-section (2) if the Commissioner on his own or on the basis of reasons recorded by the assessing officer is satisfied that it is just and expedient to do so to make the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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