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TMI Blog2014 (6) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) Pass such order and further writ, order or direction in favour of the petitioner as this Hon'ble court may deem fit and proper in the circumstances of the case. The brief facts, giving rise to the present petition, are that the petitioner is a Company, duly incorporated under the Indian Companies Act, 1956, engaged in the business of establishing and running hotels. For the assessment year 1998-99, Assistant Commissioner (Assessment), Trade Tax, Agra, passed the assessment order on 27th March, 2001. The books of accounts was rejected and the best judgment assessment was made, after disbelieving the sales and purchases of food stuffs and beverages etc. In the assessment order, it is noted that a sum of Rs.21,47,694/- was deducted as the tax on the payments made to the contractors on work contracts awarded to them. It is also noted that goods for a sum of Rs.26,16,90,877/- have been imported against 1198 declaration forms for which 11 Form-C have been issued. Against the assessment order, the petitioner filed the appeal, which has been allowed in part against which the Commissioner, Trade Tax, filed the appeal before the Tribunal, which has been rejected on 22nd February, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice, dated 10th January, 2005, has also been issued, stating therein that the petitioner has imported building materials etc. against the 1098 declaration forms for a sum of Rs.26,16,90,877/- for which 11 Form-C have also been issued. It has been further stated that under the agreement with the contractor, the goods have been imported against the declaration form and the same have been supplied to the contractor and on such goods, there is a liability of tax. The petitioner filed the reply on 9th March, 2005, which is Annexure-6 to the writ petition. In the reply, the petitioner has stated as follows: "At the outset, it is respectfully submitted that the said notice is without jurisdiction being barred by limitation and none of ingredients of Section 21 are fulfilled in the present cases. This is also clear from reading of your notice, as this is not a case of escaped turnover or under assessment or assessment at a lower rate of tax, moreover order under Section 21(2) has not been served till today. However, without prejudice to the maintainability of the present proceedings, we are giving our reply on the merit purely in the alternative. ................................. ... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) by the Additional Commissioner, but the appellate authority has refused to entertain such plea on the ground that the appeal against the said order is not maintainable and the said order cannot be challenged in the appeal. (iii) The decisions of the Apex Court in the case of N.M. Goel & Company v. Sales Tax Officer, Rajnandgaon and another (supra) and in the case of Rashtriya Ispat Nigam Ltd. v. State of Andhra Pradesh (supra) are not applicable in the present case. Sri C.B. Tripathi, learned Special Counsel, appearing on behalf of the State of U.P., submitted that the reason for granting approval are mentioned in the notice itself. The said notice was duly served upon the petitioner. The petitioner participated in the proceeding before the Additional Commissioner. Thus, the reason was fully known to the petitioner. Therefore, if the order dated 28th September, 2004 is read alongwith the notice, the reason on which the approval has been granted is apparent and was known to the petitioner. He further submitted that there is no provision for recording reason in the order, passed under Section 21(2). It is further submitted that there is no provision for serving copy of the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en imported by the petitioner against the declaration form and their use have not been considered in the original assessment. Reliance is being placed on the decision of this Court in the case of M/s. Tristar Farms v. Addl. Commissioner Grade-I and another, reported in (2013) 12 NTN 12 (Writ Petition No. 476 of 2013) and in the case of Radico Khaitan Limited v. State of U.P. & others, reported in (2010) 35 VST 280 (All). We have considered the rival submissions and perused the materials available on record as well as the relevant provisions. Section 21 of the U.P. Trade Tax Act reads as follows: 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 reasses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dated 25th February, 2014 and the order passed under Section 21(2), which reads as under:- Proviso to Section 21 (2) does not provide for recording of reason, however, Division Bench of this Court, in the case of Maniktala Chemicals (supra) and in the case of S.K. Traders (supra), has held that before granting approval, under proviso to Section 21(2), opportunity should be given to the assessee. It also provides for recording of the reason. In the case of Radico Khetan (supra), the Division Bench of this Court has held as follows: "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.P.T.C. 1128 have held that before granting the approval under the proviso to Section 21 (2) of the Act the opportunity should be given to the assessee. We are of the view that under the proviso the Commissioner does not exercise the judicial power in strict sense. He is not suppose to adjudicate the issue. He has to satisfy on the basis of the reasons recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amendment application that any notice was required to be given and that such notice was not given to the petitioners before the Addl. Commissioner made the order under the proviso to Section 21 (2) of the Act dated 2.11.2009 extending the period of limitation. The facts of the case in Maniktala, R.K. Traders, M/s Swati Gramodyog Sewa Sansthan, and Yadav Traders are entirely different. In all those cases the order issued by the Addl. Commissioner under the proviso to Section 21 (2) was under challenge. In the present case the petitioners did not challenge the notice under Section 21 based upon the order under proviso to Section 21 (2) of the Act. It has challenged the orders under proviso to section 21 (2) after a period of 10 years. The facts and circumstances and the merits on which the department decided to reopen the assessment were not only in the knowledge of the petitioner but that the petitioner had also taken several grounds including the terms of the contract in challenging the notice. In these circumstances, can it be said that the order under the proviso to Section 21 (2) has to struck down as it does not contain any reason? The law does not insist on recording reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 21(2), notice under Section 21 and further proceeding in pursuance thereof on the ground that there is no material, or the material is irrelevant, etc. on the basis of which 'belief' of escaped assessment cannot be formed, or the proceeding has been initiated on account of change of opinion on the basis of principle of law laid down by the Apex Court and various High Courts in this regard. We are of the view that the challenge to the order, under Section 21 (2), dated 28th September, 2004, is grossly barred by laches and is not bonafide. The notice issued by the Additional Commissioner has been served upon the petitioner. The petitioner participated in the proceeding before the Additional Commissioner. In the subsequent notice, dated 16th October, 2004, calling upon the petitioner to appear, it was clearly mentioned that the notice is under Section 21(2), therefore, the order passed by the Additional Commissioner was well within the knowledge of the petitioner. There is no provision, under the Act or Rules framed thereunder, to serve the order passed under Section 21(2), granting approval. Thus, petitioner could have obtained the certified copy of the order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s retrospective operation. Under the amended provision, the Commissioner of Sales Tax authorises assessing authority to make assessment or reassessment after the expiration of 8 years on the end of such year notwithstanding that such assessment or reassessment may involve a change of opinion (para 25). 29. Hon'ble Mr. Justice M. Katju (as he then was) and Hon'ble Mr. Justice Umeshwar Pandey in M/s Shyam Babu Vaishya & Anr. Vs. Asstt. Commissioner, Trade Tax, 2004 UPTC 210 refused permission to challenge the reopening of the assessment under Section 21 (2) on the ground that the writ petition was filed in September, 2003, seven months after the order was passed on 13th March, 2003. It was held that reopening of the assessment can be made on the basis of material already on record at the time of original assessment, if escapement of assessment to tax was due to concealment by the assessee or negligence and ignorance on the part of the Assessing Officer. In the present case, the Additional Commissioner has issued the show cause notice stating therein the material and the reason on which the approval has been sought. Said notice has been duly served upon the petitioner. The p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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