TaxTMI 
TaxTMI 
TaxTMI 
2014 (2) TMI 251
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.... 21 (2) of the UP Trade Tax Act by the Additional Commissioner (Grade-1), Commercial Tax to show cause as to why permission be not given to re-open the assessments of trade tax on the ground that while assessing the petitioners to Central Sales Tax, a set off/adjustment has been given of the amount of State tax paid on the purchase of paddy. The notices proceed on the basis that there is no provision under the UP Trade Tax Act for giving benefit of Section 8 (2A) of the Central Sales Tax to the manufacturers of rice for giving adjustment of the State tax paid on paddy in the Central Sales Tax, referring to the clarification in the Circular letter no.2313 of the Commissioner, Trade Tax, U.P. dated 29.3.2007. 3. The petitioner has also challenged the Circular dated 29.3.2007 on the ground that the Commissioner of Trade Tax has no jurisdiction to issue such circular influencing the assessing authorities to exercise their powers of assessment in one way or other. 4. It is submitted by learned counsel appearing for the petitioners that the questions raised in these writ petitions were considered and decided in favour of assessee in M/s Aryaverth Chawal Udyog and others vs. State of UP....
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....unt of change of opinion. The Assessing Authority in the notice under section 21 of the Act has neither referred any decision of any High Court or of the Apex Court interpreting Section 15 (c ) of the Act in the manner in which it has now been considered. Therefore, apart from his own change of view and may be on the basis of instructions of the Commissioner of Trade Tax by the impugned circular, proceedings under section 21 of the Act have been initiated. Thus, on the facts and circumstances of the case, we are of the view that at the time of initiation of the proceeding under section 21 of the Act, there was no material on the basis of which a believe could be formed that there was escaped assessment, namely, that the tax levied on the inter-State Sales of rice has been wrongly reduced by the tax levied on the paddy out of which such rice was procured except on account of his own change of opinion in this regard. 74. It may be mentioned here that in view of language used in the proviso to section 21 (2) of the Act, the approval of extension of time may be granted even in case of change of opinion, but in absence of any such words in Section 21 (1) of the Act the assessing author....
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....desh 43 STC 183. The Circular clarified that the judgment of Andhra Pradesh High Court is not applicable due to different statutory set up in U.P. Trade Tax Act. This position of law was found legally correct in M/s Aryaverth Chawal Udyog and others vs. State of UP and others (supra) and thus it cannot be said that the Commissioner wanted to and had interfered in quasi judicial functioning of the authorities of the Trade Tax. It was held in S/s Gaya Deen Kailash Chand vs. State of UP & others (supra) as follows:- "A bare perusal of the circular would show that it has only invited the attention of the Assessing Authorities to the fact that the decision given by the Andhra Pradesh High Court in the case of Aitha Narasaiah & Co. (supra) is not applicable due to different statutory set up in U.P. Trade Tax Act. The said view has been found legally correct by the Division Bench of this Court in the case of M/s Aryaverth Chawal Udyog (supra). Thus, it cannot be said by any stretch of imagination that it amount to interference in the quasi judicial function of the authorities of trade tax. Drawing the attention of the authorities discharging quasi judicial function, to a correct expositi....
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....thority has reason to believe that -- (i)whole or part of any turnover of a dealer in any assessment order or part thereof; (ii)has escaped assessment to tax or (iii)has been under assessed or (iv)has been assessed to tax at a rate lower than at which it is assessable under this Act, or (v)any deductions or exemptions have been wrongly allowed in respect thereof. (vi)the Assessing Authority may issue notice ......................" 8. Section 21 (2) is by way of enlargement of jurisdiction with the permission of the Additional Commissioner. 9. In the present three writ petitions the notices under Section 21 (2) are by way of show cause notices as to why limitation be not enlarged for proceeding of re-assessment to tax to deny the adjustment of state tax given on the purchase of paddy in the central sales tax on inter-state sales. 10. In S/s Gaya Deen Kailash Chand vs. State of UP & others (supra) this Court referred to the judgments in Commissioner of Sales Tax vs. Bhagwan Industries (P) Ltd (1973) 31 STC 293 (SC); Sales Tax Officer Ganjnam & another v. Uttareswari Rice Mills (1972) 30 STC 567; Rawalpindi Flour Mills versus State of UP & others 1998 UPTC 192; M/s S.K. Trade....
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....s, which were issued under Section 21 (2) for re-assessment to tax the escaped turnover due to deductions which were wrongly allowed under Section 21 (1) (v) of the U.P. Trade Tax Act. 13. Where the principle of law has been correctly laid down by the Division Bench, it is not necessary for the subsequent Division Bench hearing the matter of granting relief to refer the matter to a larger bench. 14. So far as directions issued in para-72 of the judgment in in M/s Aryaverth Chawal Udyog and others vs. State of UP and others (supra) is concerned, we find that the directions are merely by way of guidance and do not amount to quashing the Circular nor there was any valid ground on which the Circular letter dated 29.3.2007, could be quashed. In the present case also we do not find any good ground to entertain the challenge inasmuch as the circular is only by way of clarification and does not take away the jurisdiction of assessing authority of re-assessment. 15. We have taken the same view in M/s Balaji Foods & others vs. State of UP & another Writ Tax No.1466 of 2008 decided on 10.7.2013. 16. Before parting the matter we may quote with benefit the conclusions drawn in S/s Gaya Deen....