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TMI Blog2015 (11) TMI 1429X X X X Extracts X X X X X X X X Extracts X X X X ..... an assessment. - Court concludes that in the present case the jurisdictional requirement of the VATO having to record the “reasons to believe” preceding the issuance of the show cause notice to the Assessee under Section 24 (1) DSTA was not complied with. Consequently, the entire re-assessment proceedings are bad in law. - Impugned order is set aside - Decided in favour of assessee. - ST. APPL. 7/2010, ST.APPL. 4/2012, ST. APPL. 5/2012, W.P.(C) 812/2013 &CM APPL 1548/2013, W.P.(C) 813/2013 &CM APPL 1550/2013, W.P.(C) 814/2013 & CM APPL 1552/2013 - - - Dated:- 15-10-2015 - Dr. Justice S. Muralidhar And Mr. Justice Vibhu Bakhru, JJ. For the Petitioner : Mr. Rajesh Jain, Advocate with Mr. Virag Tiwari and Mr.K.J. Bhat, Advocates For the Respondent : Mr. Santosh Kumar Tripathi, Additional Standing counsel ORDER ST.APPEAL. Nos. 7/2010, 4/2012 and 5/2012 1. These appeals by the Assessee under Section 81 of the Delhi Value Added Tax Act, 2004 read with Section 45 of the Delhi Sales Tax Act, 1975 ( DSTA ) are directed against the impugned common order dated 9th/13th July 2010 passed by the Appellate Tribunal Value Added Tax ( AT ) under Section 43 (6) of the DST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmon order dated 31st April 2009 the appeals filed by the Appellant were disposed of by the Appellate Authority with a direction to the Appellant to again appear before the VATO within 15 days along with the documents. The further challenge by the Appellant to the said order of the Appellate Authority was negatived by the AT on 13th July 2010. Aggrieved by the aforementioned order of the AT, the Assessee has filed the present three appeals. Questions of law 8. On 2nd January 2011, this Court framed the following questions of law for consideration: (i) Whether the Tribunal was justified in upholding the reassessment orders when before issuing the notice in form ST-15, no reasons have been indicated/recorded by the Ld. VATO on the order sheet? (ii) Whether the reassessment proceedings in terms of Section 24(2)(b) are not barred by limitation and on this ground were the orders not required to be quashed and set aside? (iii) When the Delhi Sales Tax Act, 1975 stood repealed and the power of reassessment were not saved under Section 106(2) of the Delhi VAT Act, 2005 then could the Assessing Authority have the jurisdiction to issue notice under Section 24 when by 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er direction of higher authorities. This is not a mere procedural irregularity that can be condoned by remanding the matter to the VATO for a fresh reassessment proceeding. It goes to the very root of the matter since what is sought to be done under Section 24 of the Act is to re-open an assessment. 12. The above legal position has been explained in several decisions. In Samagya Consultants (P) Ltd. v. CST T 2001 (122) STC 512 (Del) this Court referred to the decision in Sales Tax Officer v. Uttareshwari Rice Mills 1972 (30) STC 567 and held: the legislative intent is also clear because of the expression used in Section 24 itself i.e. Commissioner has reasons to believe . The powers of the assessing officer to reopen assessment, though wide, are not plenary. The words used in the statute are reason to believe and not reason to suspect . The expression reason to believe postulates belief and existence of reasons for that belief. It postulates that the assessing officer holds the belief induced by the existence of reasons for holding such belief. 13. In Samagya Consultants (P) Ltd. (supra), since the notice for reopening the assessment was issued without recordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that there must be reasons to believe that a completed assessment must be reopened. This is also the interpretation given by this Court to Section 24 of the Delhi Sales Tax Act, 1975. The power to reopen an assessment is quite clearly not a plenary power, even though the power is wide. Therefore, it is mandatory upon the Assessing Officer to have some material on record and also to consider that material and thereafter record reasons why a completed assessment is sought to be reopened. 16. The above legal position was reiterated in the decision dated 17th August 2007 in Writ Petition (Civil) No. 6545 of 2002 (Prashant Software Ltd. v. Commissioner of Sales Tax). It was again observed as under: This is an extremely unfortunate situation where despite Circulars issued by the Commissioner of Sales Tax, the Respondent are bent on asserting that it is not at all necessary that reasons should be recorded before initiating steps to reopen a completed assessment. Apart from a violation of the law, it would be of no avail to an Assessee if it does not know what weighed in the mind of the assessing authority for reopening the assessment. It is for this reason that the Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X
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