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TMI Blog2017 (9) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... ge of opinion can be the basis for re-assessment? - Held that: - the law is settled that mere change of opinion in absence of any other material will not be sufficient for reassessment - re-assessment of tax is permissible only when it has been under assessed or has escaped assessment, or has been assessed at a lower rate, or any wrong deduction has been made while making the assessment or a rebate of input tax has incorrectly been allowed, while making the assessment or is rendered erroneous and prejudicial to the interest of revenue. Consequent to or in the light of any judgment or order of any Court or Appellate Board, which has become final. Thus, except these circumstances no other grounds available for the Commissioner to reassess the tax - in the present case, it was only on the basis of opinion formulated by order dated 5.6.2007 the Commissioner has re-assessed the tax of the period 2006-07 which cannot be upheld. Therefore, the demand raised for additional sum being the difference i.e. 8.5% amounting to ₹ 47754454/- is set aside. Consequently the demand carried for said amount is also quashed. Sub section (3) stipulates that any order passed by the Commissioner un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to 12.5 % tax under MPVAT Act. Evidently as the order dated 5.6.2007 was passed in purported exercise of powers under section 70 the same was to effective from a prospective date as per sub-section (3) of section 70 which envisages (3) Any order passed by the Commissioner under sub-section (1) and (2) shall have a prospective effect and shall be binding on the authorities referred to in Section 3 in all proceedings under this Act except appeals. 3. That the return filed by the petitioner for the year 2006-07 were assessed and the assessment order was passed on 26.5.2009 by the Assistant Commissioner, Commercial Tax, Gwalior Circle-3, whereby it was held that the leaf springs are taxable @ 4% being declared goods under section 14 of the CSI Act. 4. That show cause notice was issued to petitioner on 9.12.2011 for re-assessment of the year 2006-07 under sub-sections (1) and (2) of section 21 of MPVAT Act, whereby the petitioner was called upon to show cause as to why on the sales turnover of ₹ 56,18,17,840/- pertaining to leaf springs whereon sales tax @ 4% has been paid whereas the leaf springs being part of motor vehicle being covered under Part IV of Schedule II and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of the petitioner that impugned order passed after a period of one year from the date of initiation of proceedings, even after calculating the period during which the operation of the show-cause notice was stayed is nonest in view of the stipulation contained under Section 21(3) read with Section 22 of the MPVAT Act, we are not impressed with the contention for the reasons that after the disposal of the Writ Petition No.6062/2012 on 2.4.2014, though the petitioner filed the reply on 15.04.2014; however, the matter was adjourned repeatedly at the instance of the petitioner and since the Authority concern was under an obligation to decide after affording reasonable opportunity, the order passed after one year cannot be faulted with because of the repeated adjournments sought by the petitioner. For delay, if any, in passing the final order, it is the petitioner who has to be accounted for and not the Authority concern. Even otherwise joint reading of the provisions contained in sub-section (3) of Section 21 and Section 22 of MPVAT Act does not lend the support to the contentions on behalf of the petitioner that the Authority concern had no jurisdiction to pass an order after e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iple which has been laid in other cases relating to analogous provisions in sales tax statutes must be followed as otherwise the purpose of a provision like Rule 33 can be completely defeated by taking certain collateral proceedings and obtaining a stay order as was done in the present case or by unduly delaying assessment proceedings beyond a period of three years. 5. It is undoubtedly open to the legislature or the rule making authority to make its intention quite clear that on the expiry of a specified period no final order of assessment can be made. Then the taxing authorities would certainly be debarred from completing the assessment beyond the period prescribed as was the case in sub-section (3) of section 34 of the Income tax Act, 1922; but such is not the case here and we would hold that the assessment proceedings relating to the year 1962-63 were within time. 11. Applying the principle of law laid down in M/s Sudarsanam Iyengar and Sons (supra) and the given facts of present case and the provision contained under sub-section (3) of Section 21 of MPVAT Act which envisages that: (3) The assessment or reassessment under sub-section (1) shall be made within a peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t out in the case of 12.4.1996 and 23.10.1999 Circulars. The assessments were completed on the basis of 12th April, 1996 Circular. Merely because the Commissioner changes his view/opinion and according to him it was review of the earlier decision that cannot have any effect on any assessment which has been completed on the basis of the 1996 Circular. 25. That being so, the question of re-opening the assessment by mere change of opinion is entirely impermissible. 26. Though these aspects need not be taken note of in view of the conclusion that the proviso was clarificatory in nature and operated with effect from the date Section 5-C was amended i.e. 1.4.1986 yet this is an additional factor to set aside the High Court's judgment. 27. It is stated by a long line of decisions that reopening of assessment is not permissible by mere change of the opinion in the assessing officer. Here it has not been disputed that the Circular dated 23.10.1999 was on account of change of opinion of the Commissioner that too while reviewing the earlier Circular. It could not be brought to our notice as to which provision permitted the review. 15. In Commissioner of Income Tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate of M.P. and others, 2005 (1) M.P.L.J. 408, learned Single Judge of this Court after relying on the decision by Supreme Court held: 7. A careful reading of provision reveals that expression 'escape' serves as a key and foundation of the jurisdiction to reopen an assessment is that of 'turnover' and not, be it noted, an assessment. A turnover escapes assessment when it is not noticed by the officer either because it is not before him by reason of inadvertence omission or deliberate concealment on the part of the assessee or because of want of care on the part of officer the turnover though shown in returns was not taken notice of. This would be the natural and normal meaning of expression 'turnover which has escaped'. In the present case, petitioner had filed the returns disclosing turnover. It was not the case of ex parte assessment or discovery of new material. Perusal of reassessment order reveals that show-cause notice was issued on the basis of flying squad report. Now the question is whether said report would come within the ambit of expression 'for any reason' occurring in Section 19 the Act of 1958. In (1996) 29 VKN 430 a Division Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner issued show- cause notice for reopening of assessment. Division Bench while answering the reference held in no uncertain terms that turnover considered exempted can not be treated as escaped assessment and in doing so authorities exceeded jurisdiction by resorting to Section 19 (1) of the Act of 1958. The view taken by the Division Bench is based upon the decision of Supreme court in Ghanshyamdas v. Regional Assistant Commissioner of Sale Tax, Nagpur, reported in 1964 MPLJ (SC) 782= AIR 1964 SC 766. In view of the aforesaid discussion, I have no hesitation to hold it was not case of escaped assessment. In the present case there was no concealment of taxable turnover relating to inter-State sale of LCV. It was shown in returns and assessing authority exempted it from payment of tax by permitting deduction. Except for change of opinion based upon the report of the flying squad, there was no material to initiate proceedings under Section 19 of the Act of 1958. Thus authorities clearly acted beyond their jurisdiction by initiating reassessment proceedings and passing the order of reassessment. This is unsustainable in law. Accordingly, the impugned order of reassessment is q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier determination order dated 3.6.3003 the petitioner filed the return for the year 2006-07 and the assessment order was passed on 26.5.2009 accepting tax @ 4% on the leaf springs being declared goods under section 14 of CST Act. However, it was on the basis of the opinion formulated by order dated 5.6.2007, which as evident, is on the basis of the decision by Rajasthan High Court in Commercial Tax Officer Vs. M/s Mach Springs Pvt. Ltd.; Sales Tax Revision Petition No.297/2005 decided on 10.3.2006. 21. The Rajasthan High Court as evident from the decision was dealing with specific entry no.9 of the Notification dated 26.3.1999 (S.No.1218) under 6% tax which read as Motor Parts and Accessories for all types of Motor-Vehicles (including auto-parts for two wheelers); and affirmed the view of the Tax Board which held that leaf springs sold by the assessee as Auto Vehicle parts and charged to tax at the rate of 6% were taxable @6% and could not be taxed in residuary or general category @ 10%. In the case at hand till an order is passed on 5.6.2007 the leaf springs were classified as iron and steel under Entry 30 (v) of Part II of Schedule II and it is only after the decision ..... 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