9911796707
TMI Blog2013 (5) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... d to as 'the Additional Commissioner') to re-open the assessments for the assessment years 2003-04 to 2006-07 and reassessment notice under Section 21 of the U.P. Trade Tax Act (hereinafter referred to as 'the Act) for the assessment year 2007-08. The background facts may be noticed in brief. The petitioner M/s Parmarth Steel & Alloys Pvt. Ltd. having its registered office at 7th Mile Stone Nagina Road, Bijnore, U.P. is a Company incorporated under the provisions of Companies Act. 1956 and Sri Raj Kamal is one of its Directors. It is engaged in the manufacture of Steel Ingots, M.S. Round, Square Bar in the district of Bijnor which are excisable items also. The assessments under the U.P. Trade Tax Act for the assessment years 2003-04, 2004-05, 2005-06 and 2006-07 were completed by the Trade Tax Department and account books were accepted. On 10th July, 2007 the Excise Department searched the business places of the petitioner Company as also one of the Directors of the Company. In the said search, incriminating documents were found and seized. The Excise Department also made inquiries from the persons who were connected with the petitioner having business relations. A re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evance as well as material before the Assessing Authority in the reassessment proceedings. In para-5 of the counter affidavit, it has been stated that the petitioner has not deposited the excise duty on the evaded sale of Rs. 65,47,51,765/- which is also taxable turnover under the U.P. Trade Tax Act. Copy of the counter affidavit was served on the petitioner on 7th December, 2010 and since then, the matter has been listed along with connected matters from time to time as per convenience of the petitioner's counsel but till the date of hearing, the petitioner could not file any rejoinder affidavit, controverting the allegations made in the counter affidavit. Heard Sri Pradeep Agrawal along with Sri Krishna Agrawal, learned counsel for the petitioner and Sri C.B. Tripathi, Special Counsel for the respondents. Challenging the impugned orders granting sanction and reassessment notice relating to assessment years referred to herein above, learned counsel for the petitioner submitted that there was no material before the respondent no. 3 who has granted sanction for reopening of the assessments for all these years. Submission is that the order granting sanction is in the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting sanction to re-open the assessments as contemplated under the proviso to Section 21(2) of the Act. For the sake of convenience, the said provisions is reproduced below: "21. Assessment of tax on the turnover not assessed during the year.-- [1] ..................................... ................................................................................................ ................................................................................................ [(2) Except as otherwise provided in this section, no order of assessment or the re-assessment under any provision of this Act or any assessment year shall be made after the expiration of two years from the end of such year or March 31, 1998, whichever is later]: [Provided that if the [Commissioner] [on his own or on the basis of reasons recorded by the assessing authority, is satisfied], that it is just and expedient so to do authorizes the assessing authority in that behalf, such assessment or the reassessment may be made after the expiration of the period aforesaid but not after the expiration of six years from the end of such year or March 31,2002, whichever is later notwithstanding that such assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods purchased from Kabaris is not exempt from tax but is liable to tax as unserviceable goods the proceedings can therefore be taken on mere change of opinion. " In Dhanawat Marketing versus State of U.P. & others, 2011 Tax Law Diary 41, it has been held as follows:- "The approval granted by the Additional Commissioner, Kanpur is not as detailed as one might expect, however, he has approved the proposal sent by the Assessing Officer. It is not necessary on the part of the approving authority to give detailed reasons lest it may be said he had influenced the reassessment proceedings on merit." In Radico Khaitan Limited versus State of U.P. and others, (2010) 35 VST 280 (All), a Division Bench decision of this Court, has held that the Court can only examine whether there was any material and whether material is relevant to form belief of escape turnover. The relevant paragraph is reproduced below: "The Division Bench of this Court in the case of M/s. S. K. Traders , Modi Nagar, Ghaziabad Versus Additional Commissioner, Grade-I, Trade Tax , Zone Ghaziabad and another, reported in 2008 U.P. T.C.-392 and Manaktala Chemicals Pvt. Ltd. Vs. State of U.P. and others, reported in 2006 U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concealment of turnover is established. The said finding is prima facie finding for the purposes of granting permission. So far as the material is concerned, it is not disputed by the petitioner that the search took place on 10th July, 2007 at the various business places of M/S Parmarth Iron Pvt. Ltd. and in that search operation, computer Hard-disk was seized. The said computer Hard-disk contains the details of raw material as well as finished goods and those details show suppression of production of goods. The stand of the petitioner is that the petitioner has no concern with the premises H-8, Geeta Nagari, Bijnor. This question shall be examined in reassessment proceedings. At this stage, bare denial by the petitioner is not sufficient to hold that there is no material against it. It could not be denied by the learned counsel for the petitioner that statements of the Directors were recorded. Statements show that in M/S Parmarth Iron Pvt. Ltd., Raj Kamal Agrawal, , Lalit Kumar Agrawal and Atul Kumar Agrawal Sons of Jitendra Mohan Agrawal and Vijay Kumar, Sanjay Kumar and Raj Kumar sons of late Ramesh Chandra are the directors while in M/s Parmarth Steel & Alloys Pvt. Ltd., Sri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction. To put it differently, if there are, in fact, some reasonable grounds for the assessing authority to believe that the whole or any part of the turnover of a dealer has escaped assessment, it can take action under the section. Reasonable grounds necessarily postulate that they must be germane to the formation of the belief regarding escaped assessment. If the grounds are of an extraneous character, the same would not warrant initiation of proceedings under the above section. If, however, the grounds are relevant and have a nexus with the formation of belief regarding escaped assessment, the assessing authority would be clothed with jurisdiction to take action under the section. Whether the grounds are adequate or not is not a matter which would be gone into by the High Court or this Court, for the sufficiency of the grounds which induced the assessing authority to act is not a justiciable issue. What can be challenged is the existence of the belief but not the sufficiency of reasons for the belief. At the same time, it is necessary to observe that the belief must be held in good faith and should not be a mere pretence." The proposition of law as culled out from the above is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnover has escaped assessment cannot be found. At the stage of issue of notice as pointed out by the Apex Court in the case of M/s Bhagwan Industries (P) Ltd. (supra), the relevant consideration is whether there is some relevant material giving rise to prima facie inference that some turnover has escaped assessment. Whether that material is sufficient for making assessment or re-assessment under Section 21 of the Act would be gone into after notice is issued to the dealer and he has been heard in the matter or given an opportunity for that purpose. It has been laid down therein that the Assessing Authority would then decide the matter in the light of material already in its possession as well as fresh material procured as a result of the enquiry which may be considered necessary. Para-12 of the aforesaid case indicates that at this stage only this much is to be examined as to whether there is some relevant material or not giving rise to prima facie inference, which is present in the present case. A detailed inquiry or finding is not required at the stage of grant of sanction as held by this Court, time and again, in the cases of M/s S.K. Traders (supra), Dhanawat Marketing (supr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
