Reopening of VAT assessments fails where the only basis is a judgment later set aside by the Supreme Court.

Completed VAT assessments could not be reopened under Section 29(7) of the U.P. Value Added Tax, 2008 when the only basis for reopening was a prior High Court ruling that the Supreme Court had later set aside. The assessments had been finalised under Section 28(2), and the reopening was sought solely because of the earlier Modi Naturals decision used to deny full input tax credit. Once that judgment was overturned and full input tax credit was required to be granted, the foundation for reopening disappeared. In the absence of any independent ground for action under Section 29(7), the reopening notices and the approval were quashed.

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Issues: Whether notices and approval for reopening completed VAT assessments under Section 29(7) of the U.P. Value Added Tax, 2008 could survive when the reopening was founded solely on a prior judgment that had been set aside by the Supreme Court.

Analysis: The assessments had earlier been completed under Section 28(2) of the U.P. Value Added Tax, 2008 and were sought to be reopened only because of the earlier High Court decision in Modi Naturals, which had been the basis for denying full input tax credit. Once the Supreme Court set aside that decision and held that full benefit of input tax credit was to be granted, the sole foundation for reopening disappeared. As no independent ground for invoking Section 29(7) was shown, the reopening notices and the related approval could not be sustained.

Conclusion: The impugned notices under Section 29(7) of the U.P. Value Added Tax, 2008 and the approval for reopening were quashed.

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