9911796707
TMI Blog2013 (6) TMI 469X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.06.2009, the Central Excise Department has conducted a survey at the business premises of the assessee namely M/s. Vinay Wires and Poly Products Limited, Kanpur; and M/s Kaveri Graphics Limited (earlier known as M/s Diamond Graphics Limited) Kanpur. During the survey, after examining the books of accounts, bank accounts and other materials, it was found that the assessee has sold more than 98 crores Gutkha Pouch without showing it in the books of accounts. To this effect, necessary information was sent to the department. The matter was more than four years old. So, the Deputy Commissioner, Commercial Tax has sought permission from the competent authority for the extension of time for making reassessment. The authority concerned has passed the impugned orders under section 21 (2) of the Trade Tax Act and granted the permission for making the reassessment under the Trade Tax Act as well as Entry Tax Act by observing that the Gutkha is exempted from the commercial tax but its raw material is subject to tax. Being aggrieved, the petitioner has filed the present petitions. Mr. H. P. Srivastava, learned Additional Chief Standing Counsel appearing for the State raises a preliminary o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ........... (2) Except as otherwise, provided in the section, no order of assessment or re-assessment under any provision of this act for 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." Learned counsel also submits that the limitation for re-assessment for the assessment year 2006-07 had already expired on 31.03.2008. However, in view of the proviso to Section 21 (2), limitation may be extended by the Commissioner on the basis of the reasons recorded and the reassessment can be made within the period of six years at the end of the assessment year in question. Another submission of the learned counsel for the petitioner is that there is no material whatsoever was available with the survey team regarding the purchase of raw material from the unregistered dealer, which attracts Section 3 AAAA, hence the initiation of the proceedings under section 21 for imposition of tax under section 3 AAAA is based on the assumption and presumption. Learned counsel further submits that the petitioner has specifically demanded the information and sought an opportunity to cross examine but without affording any opp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcial Tax Department. He submits that no proceedings can be initiated under section 10-B, of the Act for the reason that the period of four years has already expired. So, the authorities concerned have rightly initiated proceedings under section 21 of the Trade Tax Act, which is valid as per the ratio laid down in the cases of Kala Kendra Kanpur vs. Sales Tax Officer, Kanpur; (1989) U.P.T.C. 597 Allahabad; and Super Chemicals Agra and Apollo Tyres Ltd. vs. Commissioner, Trade Tax (2010) NTN (Vol42), Alld. He also submits that proper notice was issued to the petitioner but petitioner failed to co-operate. For this, purpose, he has drawn the attention towards the report submitted by the Central Excise Department on 17.01.2012 addressed to the Commercial Tax Department, wherein it is mentioned that:- "Shri Sameer Mittal and Shri Sunil Aggarwal, cousin brothers of Sri Manish Aggarwal, Director of KPPPPL, who were present in the factory of KPPPPL on 30.06.2009 stated that all documents/records were being maintained by Sri Manish Aggarwal, However, Sri Manish Aggarwal did not turn up on 30.06.2009, since none explained the stock in the records regarding packaging material, the entire pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufactures of "Rajshree brand gutkha (which was working in the name and style of M/s K. P. Pan Products Pvt. Ltd. Lucknow as on 30.06.2009. i.e. the date of search), whereas the invoices (which were not reflected in their statutory records) were made in the name of M/s BKG Enterprises. It, therefore, appears that manufactures of 'Rajshree' brand are engaged in clandestine purchase of raw material in their unit in a well planned and organized manner." Lastly, he justified the impugned order, where permission for reassessment has been granted by the competent authority as the raw material used for the suppressed sale item is taxable. We have heard both the parties at length and gone through the material available on record. In the instant case, it is evident that the original assessments were completed. Normal period for reassessment has already expired. So, the assessing officer has sought permission for reassessment from the competent authority after recording the reasons, which was granted by the impugned orders under the Trade Tax Act as well as the Entry Tax Act. Needless to mention here that initiation of proceedings for granting permission by the Commissioner after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls satisfied that it is just and expedient to re-open the assessment, it would still require that such reasons must be made known to the assessee also, so that before the assessment is reopened, he may have an opportunity to satisfy the higher authority that the reasons assigned by the Assessing Authority are not relevant or they are incorrect or they do not make out a legal ground for reopening of the assessment and likewise if the Commissioner or the higher Authority proposes to authorize the Assessing Authority for re-opening the assessment on his own, then also reasons for satisfaction have to be supplied to the dealer, so that he may have a say to convince the higher authority for not authorizing the Assessing Officer for not reopening the assessment. Whether the Commissioner or the higher authority permits the Assessing Officer to proceed under the extended period of limitation either on his own or on the basis of the reasons recorded by the Assessing Authority, in both cases, the assessee would have a right to put forward his defence for not re-opening the assessment. This opportunity, if excluded, or shredded out from the aforesaid proviso, it would leave the assessee with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble by a dealer, who is bringing the goods within the local area. The manufacturer of 'Gutkha' is not liable for payment of entry tax. His liability is just to collect the Entry Tax from the dealers and deposit with the exchequer. During survey, it was found that the petitioner has manufactured 'Gutkha' from the raw material purchased from the unregistered dealers and as raw material was taxable under the provisions of Trade Tax Act now known as Value Added Tax and under the provisions of Entry Tax Act, the liability to pay Tax is on the dealer but in the instant case in the absence of entries in the books of account, no case is made out as to where the goods were sold and how Entry Tax was evaded. Hence, no prima -facie case is made out for the evade of Entry Tax. Section 4 (1) of the Entry Tax provides levy of Entry Tax on the entry of goods mentioned in the schedule into a local area from any other place outside that local area for consumption, use or sale therein and the Entry Tax was payable by dealer who is bringing the goods within the local area and not by the manufacturer. Section 4-A of the Old Entry Tax Act is equivalent to Section 12 of the New Entry T ..... 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