Reassessment permission failed where it was founded on an incorrect appellate record and pending challenge to the prior order.

Reassessment permission under Section 29(7) of the Uttar Pradesh Value Added Tax Act, 2008 could not stand where it rested on an incorrect factual premise that the appellate authority had allowed the assessee's appeal only on limitation. The appellate record showed that the assessment order had been set aside on both merits and limitation, so the statutory basis for reopening was absent. The pendency of the Department's appeal against the appellate order also meant that the order had not been displaced, and reassessment could not be used to bypass that pending challenge. The High Court accordingly set aside the permission in favour of the assessee.

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Issues: Whether permission for reassessment under Section 29(7) of the Uttar Pradesh Value Added Tax Act, 2008 could be sustained when the appellate authority had already set aside the assessment order on merits as well as on limitation and the Department's appeal against that appellate order was pending.

Analysis: The appellate order was found to have allowed the assessee's appeal on both merit and limitation, whereas the notice and the impugned permission proceeded on the premise that the appeal had been allowed only on limitation. Since the very basis for invoking Section 29(7) was contrary to the record, the reassessment machinery could not be set in motion on that foundation. The pendency of the Department's appeal before the Tribunal also showed that the appellate order had not been displaced and the Department could not bypass that pending challenge by resorting to reassessment under Section 29(7).

Conclusion: The permission for reassessment under Section 29(7) was unsustainable and was set aside, in favour of the assessee.

Ratio Decidendi: Reassessment permission cannot be granted on a factual premise contrary to the appellate record, particularly where the prior appellate order has decided the matter on merits and is still under challenge in appeal.

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