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TMI Blog2014 (3) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... s Welfare Corporation as well as Canteen of the Stores Department amounting Rs.5,23,93,337.57. During the course of assessment, the petitioner submitted the certificates, which was required to be issued for claiming exemption in terms of notification No.7037 dated 31.01.1985. The Assessing Officer (in short 'the AO') on the basis of these 270 certificates granted exemption on the sale of scooters to the U.P. Government Employees and Canteen Stores Department for an amount of Rs.5,23,93,337.57 vide its assessment order (Annexure-1 to the writ petition) dated 25.03.1995. The AO accepted the book version of the petitioner while making the assessment on 25.03.1995. Thereafter a notice dated 13.03.2002 was received by the petitioner which was issued from the office of opposite party no.2, Additional Commissioner fixing 18.03.2002 to show cause as to why the proceedings under Section 21(2) of the Act may not be initiated against him for the sale of two wheeler scooters to the government employees through U.P. Government Employees Welfare Corporation vide 270 forms submitted by the petitioner has a total of only Rs.4,26,94,276.59 which shows that the exemption has been granted in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 21(2) of the Trade Tax Act for the Assessment Year 1990" 7. Counter affidavit has been filed by the department stating therein that the amendment incorporated on 05.03.2001 has retrospective effect and the assessment and the reassessment can be made till 31st of March, 2002. The period has been commenced in terms of the statute, therefore, the case is squarely covered under amended provisions and the proceedings initiated are in accordance with law and thus, initiated within the time. It has also been stated in the counter affidavit that this case is squarely covered under Section 21(1) of the Act and the authority is competent to initiate proceedings under Section 21(2) of the Act. 8. We have heard Sri Pradeep Agarwal, learned counsel for the petitioner and Sri H.P. Srivastava, learned Additional Chief Standing Counsel for the respondent-State. 9. Learned counsel for the petitioner would submit that the amendment was incorporated in the statute book came into effect on 5th of March, 2001. The limitation of 8 years to commence the proceedings before the amendment has already been expired much earlier to the commencement of the proceedings, therefore, the amendment could not ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arged by amending the law?. 2. Whether any case for reopening the assessment relying upon the Section 21(1) is made out and whether it is a case of change of opinion?. Question No.1 14. The Apex Court In Addl. Commissioner (Legal) and Anr. Vs. Jyoti Traders and Anr. (1999) 2 SCC 77 dealt with the case of Commercial Tax Officer v. Biswanath Jhunjhunwalla, AIR1997 SC 357,and observed as under: "13.--------in Commercial Tax Officer v. Biswanath Jhunjhunwalla, AIR 1997 SC 357. In this case, which is under the Bengal Finance (Sales Tax) Act, 1941, the respondent, a registered dealer under this Act, was assessed for the assessment years Chaitra Sudi 2023 and 2024. The assessments were completed on February 17, 1969 and March 26,1969 respectively. Under Rule 80(5) of the Bengal Sales Tax Rules, 1941 made under that Act. The assessment could have been reopened only within a period of four years. The relevant part of this Rule 80(5) is as under: "80(5) The Commissioner or any other authority to whom power in this behalf has been delegated by the Commissioner, shall not, of his own motion, revise any assessment made or order passed under the Act or the rules thereunder if -- (ii) the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty must be given with effect from 1-11-1971, so as toencompass all assessments made within the period of six years theretofore, whether they have become final by reason of the expiry of the period of four years or not." 13. By reason of the said Notification, with effect from 1-11-1971, Rule 80(5)(ii) has to be read as barring the Commissioner (or other authority to whom power in this behalf has been delegated by the Commissioner) from revising of his own motion any assessment made or order passed under the Act or the rules if the assessment has been made or the order has been passed more than six years previous to 1-11-1971. Put conversely, with effect from 1 -11 -1971, Rule 80(5) (ii) permits the Commissioner (or other authority) to revise of his own motion any assessment made or order passed under the Act or the rules provided the assessment has not been made or the order passed more than six years previously. This being the plain meaning, the said Notification must be given full effect. Full effect can be given only if the said Notification is read as being applicable not only to assessments which were incomplete but also to assessments which had reached finality by reason of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on which the rebate of income-tax was allowed as aforesaid is availed of by the company, wholly or partly, for declaring dividends in any year...the Income-tax Officer shall re-compute the tax payable by the company by reducing the rebate originally allowed."The Sub-section in substance permits a rebate duly allowed in any year before it came into force to be withdrawn if "subsequently" the amount on which the rebate was allowed "is availed of "for declaring dividends in any year". The appellant contended that the Sub-section did not apply unless the amount on which the rebate was granted was availed of for declaring dividends after the Sub-section had come into force, that is, after April 1, 1956 and, therefore, it did not apply to the present case. It was said that if it were not so, the Sub-section would be given a retrospective operation and the rule was that it was to be presumed that a statute dealing with substantive rights was not to have such operation. This Court, per majority (3: 2), held that Sub-section (10) of Section 35 was intended to have a retrospective operation and was applicable to the present case. Sarkar, J. who was in majority, in his concurring judgment, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the years in which rebate was earned would be within time for the recall of the rebate. But a declaration prior to 1-4-1952 would be beyond the power of the Income-tax Officer to recall. This meaning is the only meaning which the plain words of the section can bear. Any other meaning might make Sub-section (10) unworkable because no company, with the knowledge that rebate would be recalled, would like to declare dividends after April 1, 1956 out of amounts on which rebate was earned. If the other meaning was attributed, Subsection (10) might well be a dead letter. The Sub-section was obviously the result of noting how rebates were earned and later were being utilized to fill the pockets of the shareholders. The amendment met this situation, and did it in very clear terms." 24. We do not think that decisions in the cases of Y. Narayana Chetty v. ITO, AIR 1959 SC 213; S.S.Gadgil, ITO v. Lal and Co. [1964] 53 ITR 231 (SC) and J.R Jani, ITO v. Induprasad Devshanker Bhatt [1969] 72 ITR 595 (SC) are of any help in interpreting the provisions of law now before us. In Y. Narayana Chetty's case, this Court upheld the contention of the assessee that the notice on the assessee is a cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to law. Sub-section (2) provided that except as otherwise provided in this section no order for any assessment year shall be made after the expiry of 4 years from the end of such year. However, after the amendment, a proviso was added to Subsection (2) under which Commissioner of Sales Tax authorises the assessing authority to make assessment or reassessment after the expiration of 8 years from the end of such year notwithstanding that such assessment or reassessment may involve a change of opinion. The proviso came into force w.e.f. February 19, 1991. We do not think that Sub-section (2) and the proviso added to it leave anyone in doubt that as on the date when the proviso came into force, the Commissioner of Sales Tax could authorise making of assessment or reassessment after the expiration of 8 years from the end of that particular assessment year. It is immaterial if a period for assessment or reassessment under Sub-section (2) of Section 21 before the addition of the said proviso had expired. Here, it is the completion of assessment or reassessment under Section 21 which is to be done before the expiration of 8 years of that particular assessment year. Read as it is, these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 21 of the Act are as under: "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 re-assess 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.... Explanation II.... Explanation III.... (2) Except as otherwise provided in this Section no order of assessment or reassessment under any provision of this Act for any assessment year shall be made after the expiration of four years from the end of such year." 9. By the amending Act a proviso was added to Sub-section 2 as under: "P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s otherwise provided in this 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, 1988, 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 authorises the assessing authority in that behalf, such assessment or re-assessment may be made after the expiration of the period aforesaid but no after the expiration of six years from the end of such year or March 31, 2002, whichever is later notwithstanding that such assessment or re-assessment may involve a change of opinion: Provided further that the assessment or re-assessment for the assessment year 1987-88 may be made by March 31, 1993: Provided also that if the eligibility certificate granted under section 4-A has been amended or cancelled by the Commissioner under sub-section (3) of section 4-A, the order of assessment or re-assessment may be made within one year from the date of receipt by the assessing authority of the copy of the order amending or cancelling the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the year 1987-88 may be made till 31.03.1993 and as per IVth proviso the assessment or reassessment for the year 1989-90 may be made till 31.03.1995. We do not think that Sub-section (2) and the proviso added to it leave anyone in doubt that as on the date when the amended proviso came into force, the Commissioner of Sales Tax could authorise making of assessment or reassessment after the expiration of 6 years from such year, i.e upto 31.03.1999 or March 31,2002 which ever is later. It is immaterial if a period for assessment or reassessment under Sub-section (2) of Section 21 before the addition of the said proviso had expired. Read as it is, these provisions would mean that the assessment for the year 1987-88 could be re-opened up to March 31, 1993. Authorisation by the Commissioner of Sales Tax and completion of assessment or reassessment under Sub-section (1) of Section 21 have to be completed within 6 years of the particular assessment year or till 31.03.2002 which ever is latter. Notice to the assessee follows the authorisation by the Commissioner of Sales Tax. It is not disputed that a fiscal statute can have retrospective operation. If we accept the interpretation given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as having been rendered per in curiam. 24. In N. Bhargavan Pillai Vs. State of Kerala, AIR 2004 SC 2317, the Hon'ble Supreme Court held that in view of the specific statutory bar, the view, if any, expressed without analysing the statutory provision cannot, in our view, be treated as a binding precedent, and at the most is to be considered as having been rendered per in curiam. 25. A similar view has been reiterated in Mayuram Subramanian Srinivasan Vs. CBI, AIR 2006 SC 2449, wherein the Apex Court has observed as under:- "Incuria" literally means "carelessness". In practice per in curiam is taken to mean per ignoratium. English Courts have developed this principle in relaxation of the rule of stare decisis. The''quotable in law", as held in Young Vs. Bristol Aeroplane Co. Ltd., (1944) 2 All ER 293, is avoided and ignored if it is rendered, ''in ignoratium of a statute or other binding authority". Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution of India, 1950 (in short "the Constitution")which embodies the doctrine of precedents as a matter of law. The above position was highlighted in Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld have a rational connection and relevant bearing on the formation of the belief, and should not be extraneous or irrelevant. The material should be relating to the particular year for which the assessment is sought to be reopened. It is not any and every material, howsoever vague and indefinite or distant, remote and far fetched, which would warrant the formation of the belief relating to escaped income as held in Income Tax Officer Versus Lakhani Mewal Dutt, (1976) 103 ITR 437, 1976 UPTC 809 (SC) after considering the provision of Section 34 of the said Act by the Apex Court. 31. In Commissioner of Sales Tax Versus Bhagwan Industries (P) Ltd., (1973) 31 STC 293, it was held that 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 this 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 this section. 32. The question whether the Assessing Officer had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment to tax' which includes under assessment, may as well be result of lack of care on the part of the assessing officer or by reason of his inadvertence on his part. Section 21 does not prohibit obtaining of information from investigation of material on record of the original assessment. The scope of that section is not circumscribed by a rider like the one that exists in Section 147 (a) of the Income Tax Act, 1961, namely the Income Tax Officer has reason to believe that by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment for that year, income chargeable to tax has escaped assessment for that year. The escapement envisaged by Section 21 of the Act for the purposes of re- assessment need not necessarily spring from a source, extraneous to the original record. However, a second thought or a mere change of opinion, by the assessing authority on the same set of facts and material on record would not clothe the assessing authority with a valid jurisdiction." 35. We are not impressed by the argument that the instant case is a case of change of opinion. The change of opinion by the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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