TaxTMI 
TaxTMI 
2005 (1) TMI 634
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....tioner is a registered dealer both under the M.P. General Sales Tax Act, 1958 (hereinafter referred to as "Act of 1958", for short) and Central Sales Tax Act, 1956 (hereinafter referred to as "Act of 1956", for short). Case of the petitioner is that in order to fillip industrial growth, State Government exercising powers conferred by section 12 of the Act of 1958 issued the Notification dated October 23, 1981. Similar Notification dated June 29, 1982 was issued under the Act of 1956. According these notifications incentives in the shape of exemption from payment of tax were provided to registered dealers who had set up industry in the District as mentioned in the Schedule and had commenced production from the date specified in the notificat....
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....s. 15,80,10,349 had escaped assessment from tax. Show cause notice was issued by the same authority who had passed the earlier assessment order, i.e., Assistant Commissioner. Petitioner submitted detailed reply raising various objections against the reopening of assessment. The Assistant Commissioner overruled objections holding that petitioner did not manufacture LCV at Pithampur as it imported the fabricated bodies to be fitted on the chassis manufactured at Pithampur to make the complete LCV. Thus, Assistant Commissioner raised additional demand of tax by the order impugned. It is, against this order present writ petition has been filed. 3.. After notice, respondents filed reply and submitted that after the assessment order was passed, ....
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....to notice of section 19(1) of the Act of 1958, which reproduced as under: "Section 19. Assessment of turnover escaping assessment.--(1) Where an assessment has been made under this Act or any Act repealed by section 52 and if for any reason any sale or purchase of goods chargeable to tax under this Act or any Act repealed by section 52 during any period has been under-assessed or has escaped assessment or assessed at a lower rate or any deduction has been wrongly made therefrom, the Commissioner may, at any time within five calendar years from the date of order of assessment, after giving the dealer a reasonable opportunity of being heard and after making such enquiry as he considers necessary, proceed in such manner as may be prescribed t....
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....29 VKN 430 a division Bench of this Court has already held reopening of assessment on the basis of audit report is not permissible under section 19 of the Act of 1958. Same can safely be held in respect of flying squad report. In Indian and Eastern Newspaper Society v. Commissioner of Income-tax [1979] 119 ITR 996, Supreme Court held that opinion of an internal audit party on point of law could not be regarded as "information" enabling the Income-tax Officer to initiate reassessment proceedings under section 147(b) of the Income-tax Act, 1961. Same view was taken in A.L.A. Firm v. Commissioner of Income-tax [1991] 189 ITR 285 (SC) wherein [1979] 119 ITR 996 (SC) (Indian and Eastern News Paper Society v. Commissioner of Income-tax) has been ....
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....ied. However, in Union of India v. Gujarat Woollen Felt Mills AIR 1977 SC 1548 it was held that non-woven felts manufactured from woollen fibers by machine pressing and used for filtration in heavy industries were "woollen fabrics" covered by entry 21. Based upon that decision, Commissioner issued show cause notice for reopening of assessment. Division Bench while answering the reference held in no uncertain terms that turnover considered exempted cannot be treated as escaped assessment and in doing so authorities exceeded jurisdiction by resorting to section 19(1) of the Act of 1958. The view taken by the division Bench is based upon the decision of Supreme Court in Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax, Nagpur repor....