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TMI Blog2022 (5) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... which revealed evaded/ unaccounted purchases/ sales of about Rs.2,31,81,000/- as evident from the Sale Ledger Account and other particulars available in the hard-disk and CD/ soft copy received from the Deputy Commissioner (SIB), Second Unit, Ghaziabad vide letter No.663, dated 27.03.2010, which is based on the report/ materials received from the Director General of Central Excise Intelligence, New Delhi. It is settled principles of law that proceedings under Section 21 of the Act, 1948 can be initiated if the material on which the Assessing Authority bases its opinion, is not arbitrary, irrational, vague, distant or irrelevant. There must be some rational basis for the assessing authority to form the belief that the whole or any part of the turnover of a dealer has, for any reason, escaped assessment to tax for some year. If such a basis exists, the assessing authority can proceed in the manner laid down in Section 21 of the Act, 1948. If the grounds are of an extraneous character, the same would not warrant initiation of proceedings under the above section - The question as to whether that material in sufficient for making assessment or re-assessment under section 21 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of 2010 Relief as prayed in Writ Tax No. 875 of 2010 Relief as prayed in Writ Tax No. 353 of 2012 Relief as prayed in Writ Tax No. 13 of 2014 i) issue a suitable writ order or direction in the nature of writ of certiorari quashing the permission granted by the opposite party no. 3 on 30.4.2010 for the assessment year 2003-04, 2004-05, 2005-06, 2006-07 and the consequential notice under Section 21(1) for the assessment year 2003-04 (ANNEXURE NO. 10 12) of this Writ Petition as well as the notice issued under sub section 1 of section 21 of the Act by the opposite party no. 4 for the assessment year 2007-08 (ANNEXURE NO. 12) to this Writ Petition after summoning the records. ii) issue a suitable writ order or direction in the nature of mandamus/prohibition directing/prohibiting the Opposite Party No. 4 not to impose and realise tax under section 21 of the Act for the assessment year 2003-04, 2004-05, 2005-06, 2006-07 2007-08 during the pendency of this Writ Petition before this Hon'ble Court or till the finalization of proceeding by the Central Excise Department. iii) issue a suitable writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in the nature of certiorari quashing notices dated 19.10.2013 issued by Respondent No.7). ii) issue a suitable writ order or direction in the nature of certiorari quashing the approval dated 24.3.2011 for the assessment year 2004-05 granted by the Opposite Party No. 3 under subsection 2 of Section 21 (ANNEXURE NO. 1) to this Writ petition after summoning the records. iii) Issue a suitable writ order or direction in the nature of writ of mandamus/ prohibition directing/ prohibiting the Opposite Party no. 3 4 not to proceed in any manner in pursuance of the notice under Section 21 of the Act for the assessment year 2004-05, 2005-06 2006-07. 7. Perusal of the reliefs sought by the petitioners reveal that notices under Section 21 of the UP Trade Tax Act, 1948 and the approval granted, relating to assessment years 2003-04, 2004-05, 2005-06 and 2006-07 have been challenged by the petitioners. The above noted first three writ petitions are pending in this Court from about a decade and the fourth writ petition is pending from about eight years. The order sending back the matter to this Court was passed by Hon'ble Supreme Court on 28.8.2019. Two and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conscious application of mind is made to the relevant facts and material available or existing at the relevant point of time while making the assessment and again a different or divergent view is reached, it would tantamount to change of opinion . If an assessing Authority forms an opinion during the original assessment proceedings on the basis of material facts and subsequently finds it to be erroneous; it is not a valid reason under the law for reassessment. Thus, reason to believe cannot be said to be the subjective satisfaction of the assessing Authority but means an objective view on the disclosed information in the particular case and must be based on firm and concrete facts that some income has escaped assessment. 30. In case of there being a change of opinion, there must necessarily be a nexus that requires to be established between the change of opinion and the material present before the assessing Authority. Discovery of an inadvertent mistake or non-application of mind during assessment would not be a justified ground to reinitiate proceedings under Section 21(1) of the Act on the basis of change in subjective opinion (CIT v. Dinesh Chandra H. Shah, (1972 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 8808.74 2005-06 5728.865 2006-07 7757.930 12. Apart from above, the materials available in the hard-disk also revealed purchases of scrap by the petitioners from various dealers and sale of ingots to various local dealers and also to some Firms of Uttarakhand. It also came to light on the basis of materials available in the hands of the respondents that the petitioners made undisclosed purchases during the Assessment Year 2003-04 from M/s Kamakhya Steels Pvt. Ltd., Bijnore (658.28 MT). These details of evaded purchases/ sales which have been extracted above from the impugned notices under Section 21(1) of the Act, 1948. Evaded transactions in some greater detail are mentioned in the impugned notices. Writ Tax No.13 of 2014:- 13. In this writ petition, the approval dated 24.03.2011 for the Assessment Year 2004-05 was granted by the Additional Commissioner under the proviso to Section 21(2) of the Act, 1948 noticing the information received by the Deputy Commissioner (Special Investigation Branch) Second Unit, Ghaziabad through letter No.659 dated 26.03.2010 from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he section. To put it differently, if there are, in fact, some reasonable grounds for the assessing authority to believe that the whole or any part of the turnover of a dealer has escaped assessment, it can take action under the section. 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 the above 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 the section. Whether the grounds are adequate or not is not a matter which would be gone into by the High Court or this Court, for the sufficiency of the grounds which induced the assessing authority to act is not a justiciable issue. What can be challenged is the existence of the belief but not the sufficiency of reasons for the belief. At the same time, it is necessary to observe that the belief must be held in good faith and should not be a mere pretence. 10. It may also be mentioned that at the stag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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