2007 (5) TMI 574 - HC - VAT and Sales Tax

Revisable order under Trade Tax Act; Limitation period clarified

The court held that the order dated May 29, 2003, dropping proceedings under section 21 of the Trade Tax Act constitutes an 'order' under section 10B, ... - Issues Involved:1. Whether the order passed by the assessing authority on May 29, 2003, dropping the proceedings under section 21 of the U.P. Trade Tax Act, is considered an 'order' under section 10B of the Act.2. Whether the period of limitation for initiating proceedings under section 10B of the Act starts from the date of the original assessment order or from the date of the order dropping the reassessment proceedings.Issue-wise Detailed Analysis:1. Nature of the Order Passed on May 29, 2003:The primary issue was whether the order passed by the assessing authority on May 29, 2003, dropping the proceedings under section 21 of the Act, constitutes an 'order' under section 10B. The Commissioner of Trade Tax argued that this order should be considered an 'order' within the meaning of section 10B, allowing it to be revised. The Tribunal had previously held that this order was not an 'order' for the purposes of section 10B. However, the court found that the order dated May 29, 2003, was indeed an 'order' as it involved the examination of account books, consideration of the original assessment, and application of legal principles. The court emphasized that the term 'order' is broad and includes decisions made by statutory authorities, thereby concluding that the order in question is revisable under section 10B.2. Period of Limitation for Initiating Proceedings Under Section 10B:The second issue was whether the limitation period for initiating proceedings under section 10B starts from the original assessment date or from the date the reassessment proceedings were dropped. The Tribunal had ruled that the limitation period started from the original assessment dates, i.e., February 27, 1999, and June 17, 2000, for the respective assessment years. The court, however, disagreed with this interpretation. It held that the limitation period should start from the date of the order dropping the reassessment proceedings, i.e., May 29, 2003. The court reasoned that the subject matter for consideration under section 10B was the legality and propriety of the order dated May 29, 2003, and not the original assessment orders. Therefore, the period of limitation for exercising revisional power under section 10B should be calculated from the date of the order dropping the proceedings.Conclusion:The court concluded that:1. The order dated May 29, 2003, is an 'order' within the meaning of section 10B and is revisable.2. The period of limitation for initiating proceedings under section 10B starts from the date of the order dropping the reassessment proceedings, i.e., May 29, 2003, and not from the original assessment dates.The Tribunal's orders in the second appeals were set aside, and the appeals filed by the dealer-opposite party were dismissed. The revisions were allowed with costs amounting to Rs. 4,000 in total.