1980 (3) TMI 249 - HC - VAT and Sales Tax

Validity of Reopening Assessment Notice Confirmed Under Sales Tax Act

Laxmi Motor Stores Versus Commissioner of Sales Tax, MP

Laxmi Motor Stores Versus Commissioner of Sales Tax, MP - [1981] 47 STC 118 (MP) Issues:1. Validity of notice issued for reopening assessment under section 19(1) of the M.P. General Sales Tax Act.2. Whether reassessment under section 19(1) constituted a change of opinion by the assessing authority.3. Interpretation of the applicability of a specific notification regarding the sale of batteries separately.Analysis:Issue 1:The case involved a reference under section 44(1) of the M.P. General Sales Tax Act regarding the validity of the notice issued for reopening the assessment. The assessing authority had initially assessed the sale of batteries at a lower rate, leading to the reassessment under section 19(1) of the Act. The notice issued to the assessee was challenged for not providing reasons for the reopening. The Court upheld the validity of the notice, stating that it clearly mentioned the discrepancy in the assessment rate for batteries, justifying the reassessment.Issue 2:The contention raised was whether the reassessment under section 19(1) amounted to a change of opinion by the assessing authority. The Court rejected this argument, emphasizing that the original assessment did not reflect a proper application of mind regarding the correct tax rate for batteries. Therefore, the reassessment was deemed valid as it rectified the initial assessment error and was not merely a change of opinion.Issue 3:The interpretation of the applicability of a specific notification regarding the sale of batteries separately was crucial. The Board of Revenue held that batteries fell under a specific entry 1-A of Part II of Schedule II to the Act, making them liable for assessment at a higher rate. The notification cited by the assessee did not cover batteries, as it was specific to motor vehicles. Therefore, the Court affirmed that the batteries were correctly assessed under entry 1-A and were not covered by the notification, supporting the decision of the Board of Revenue.In conclusion, the Court answered the questions raised in the reference. The notice for reopening the assessment was deemed valid, the reassessment was not considered a change of opinion, and the sale of batteries separately was correctly assessed under entry 1-A of the Act. The parties were left to bear their own costs in the reference, and the judgment was delivered accordingly.