2007 (5) TMI 628 - HC - VAT and Sales Tax

Dismissal of Petition Challenging Tax Reassessment despite Limitation Argument

M/s King Agency Versus State of U.P. through is Principal Secretary, Institutional Finance, Government of U.P., Lucknow, The Commissioner, Trade tax, U.P., Lucknow and The Additional Commissioner, Grade - I, Trade tax, Varanasi Zone, Varanasi

The court dismissed the petition challenging authorization for reassessment under the Central Sales Tax Act for the years 1995-96 to 1998-99, despite the ... Re-assessment order - grievance of the petitioner is that under sub-section (2) of Section 21 of the Act, the limitation for passing an order of re-assessment has been provided, which is not after the expiration of six years from the end of such year or March 31, 2002, whichever is later, which period having expired long back, the Additional Commissioner could not have authorised the Assessing Authority for making of re-assessment in respect of the assessment years in question Issues:Challenge to authorization for reassessment under Central Sales Tax Act based on limitation period and failure to produce certified copy of order.Analysis:The petitioner, a dealer in fire works registered under the U.P. Trade Tax Act, challenged separate orders authorizing reassessment for the years 1995-96 to 1998-99 under the Central Sales Tax Act. The petitioner had previously challenged the authorization in a writ petition, alleging lack of opportunity to be heard. The court directed a hearing, but the petitioner failed to appear on the adjourned date, resulting in the authorization being issued four years later on 17th February, 2007. The petitioner argued that the authorization was barred by limitation under Section 21(2) of the Act, as the six-year period had expired. However, the respondents relied on a Supreme Court decision stating that directions given in a writ proceeding could override such limitations.The court referenced a Madras High Court case following the Supreme Court's decision, stating that remanded proceedings need not adhere to the limitation period. The court found that the petitioner's submission regarding the limitation was not valid. Additionally, the court criticized the conduct of the Additional Commissioner and the former Additional Commissioner for their handling of the matter. The court expressed dissatisfaction with the lack of mention of certain facts in the orders and noted that the conduct could be considered misleading. The Additional Commissioner tendered an apology, which was accepted by the court. The court also addressed the retired former Additional Commissioner, indicating that appropriate action could be taken by the Commissioner, Trade Tax, if deemed necessary.In conclusion, the court dismissed the petition with the noted observations regarding the conduct of the involved officials.