TaxTMI 
TaxTMI 
TaxTMI 
2005 (3) TMI 729
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....05 A.Y. 2001-02 do. Annexure 4 to the W.P 3. M/s. Vikrant Tyres Limited, (the petitioner) being aggrieved against orders dated February 25, 2005 (as indicated above) passed by Additional Commissioner, Grade 1, Trade Tax, Kanpur Zone, Kanpur, under section 21(2), U.P. Trade Tax Act, 1948 ("the Act") has approached this court by filing present writ petitions under article 226, Constitution of India. 4. The three writ petitions based on similar facts, raise common question of law and hence decided together by common judgment. 5. Facts, as borne out from the record of Writ Petition No. 455 of 2005, necessary for deciding above petitions, are as under: 6. Petitioner is a company registered under the Indian Companies Act, 1956, and also registered as "dealer" under the Act. During aforementioned assessment years, it sold tyres and tubes used in "cart" as animal driven vehicles. The Commissioner, Trade Tax, vide circular dated April 1, 1992/annexure 5 to the writ petition held that tyres/tubes used in animal driven vehicles were exempt from trade tax. The assessing officer, with respect to the aforementioned assessment years, allowed exemption from trade tax on the sale of tyres an....
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.... assessing officer to initiate reassessment proceedings), ought to have recorded some good and relevant reason to show that said authority was satisfied that it was just and expedient so to do. 10. Learned counsel for the petitioner argued that mere mention of fact that there is possibility of change of opinion, bereft of good and valid reason, is not a sufficient ground. Merely expressing apprehension on possibility of change of opinion in the absence of cogent reasons, shows non-application of mind and cannot justify reopening of assessment as it will lead to arbitrary exercise of power and unsettle things for ever without an acceptable excuse. 11. Learned counsel for the respondents, Sri K.M. Sahai, Advocate, on the other hand, submitted that section 21(2) of the Act clearly lays down that when matter is referred by assessing officer, reasons are to be recorded by said assessing officer and that is sufficient compliance under law for initiating reassessment proceedings. 12. In order to appreciate respective contentions/arguments, the scope, extent and nature of the order to be passed by the Additional Commissioner for initiating reassessment proceedings, reference may be made....
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....ws that the assessing authority has to act judiciously and it cannot act arbitrarily or upon whims, i.e., without disclosing ground acceptable in law. The assessing officer has to justify "reassessment" on a ground covered under section 21(1), and it must not be opposed to good conscience, fair play and public policy. 15. Reassessment on the same material by the same authority, if permitted, for no valid reason, will open the floodgate for arbitrary action exposing one to unending process, permitting uncertainty, reopening of closed chapters without assigning good reason, depending upon whims of individuals and in the end precipitating anomalous situations. 16. It, therefore, naturally follows that there has to be some valid ground, viz., some relevant document or material having escaped notice or there has been wrong calculation due to human error bona fide committed, or ignorance of correct and complete facts due to mistake or ignorance or fraud/mis-representation (but not mere change of opinion on same material). 17. Proviso to section 21(2) of the Act contemplates that the Additional Commissioner can suo motu, on his own motion, direct assessing authority to initiate ....
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..... However, we may observe that irrespective of the amplitude of the language used in section 21 of the Act, reassessment proceedings are not permissible on mere change of opinion by the taxing authority at a subsequent stage. The petitioners are right in their submission that issuance of a notice under section 21 of the Act in the present cases was without authority of law." 23. In the case of Ratan Industries (Pvt.) Limited v. Additional Commissioner of Trade Tax, Agra [2006] 148 STC 111 (All); [2004] UPTC 347 (All), another division Bench of this court, vide para 22 observed: "It is a well-settled principle of law that the question which has been examined in detail in the original assessment proceedings and thereafter the assessment order has been passed, then the said assessment order cannot be reopened under section 21 of the Act on mere change of opinion." Again in para 36 the court observed: "In the case of Royal Trading Co. [2000] UPTC 642, it has been held by a division Bench that no reassessment proceedings can be legally taken, even if an authorization has been given under section 21(2) by the Commissioner, Trade Tax, if no cogent material was there to form a reason....
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....no such mention or even a whisper in the impugned order dated February 25, 2005 or in the notice given by the Additional Commissioner dated February 9, 2005/annexure 8 to the writ petition and hence the impugned order cannot be sustained and liable to be quashed. 27. The cases should have been normally remitted back to the concerned authority to pass fresh order under section 21 of the Act, if so advised, in accordance with law. 28. Since relevant notifications have been annexed with the writ petition and learned counsels for the parties have agreed that issue-"whether exemption granted earlier by the assessing authority was proper and just and in accordance with notification" depends upon the interpretation of these notifications, (without dispute on facts) hence this court may itself decide the same. According to the learned counsels for the parties it may be embarrassing for the Government authority/respondent to interpret its notifications against it and hence failure to act impartially. Consequently, we proceed to decide the question. 29. Learned counsel for the petitioner referred to U.P. Gazettes, relevant extract of which reads: "I. U.P. Gazette, dated January 30....
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....edule to the aforesaid notification, for the existing entries in column 2 against serial No. 1, the following shall be substituted:- 1.. Agricultural implements and parts, accessories and attachments thereof, as per details given below:- A.-Agricultural implements worked by human or animal power. ............................. Carts. . . B.-Tractor-drawn or pozver driven implements:- Ditchcr, cage, wheel, sprayer, duster or sprayer. . . or mower." 30. The petitioner submits, that certain doubts having arisen in the matter, M/s. Metro Tyre Limited filed application for clarification of these very notifications. The department clarified that tyre and tube in that case (similar to the present case of the petitioner) were exempt. Decision of the department on the said application of M/s. Metro Tyre Limited is annexure 6 to the writ petition; relevant extract of which reads: ................ Quoted text was illegible Hence not reproduced ................ 31. Learned counsel for the petitioner in order to support his contention, referred to the notification dated June 30, 1986 and argued that the articles/items which have been accorded exemption from tax are menti....
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....evelopment and Cane Marketing Union Ltd. v. Bank of Bihar, it was held: 'The Explanation must be read so as to harmonise with and clear up any ambiguity in the main section. In our opinion in view of the decision of the Supreme Court in Manickchand's case, it cannot be said that there was any ambiguity in section 39 which required any Explanation so as to harmonise and clear up the said ambiguity. The Legislature must have considered the Explanation as superfluous and omitted it on that score. We perused the statement of objects and reasons contained in the Bill of the amending Act aforesaid but it rendered no assistance on the point whatsoever. In our opinion, therefore, the fact that the Explanation was subsequently omitted is not of any consequence'." 38. Expression "cart" is defined in "Oxford Advanced Learner's Encyclopedic Dictionary" as follows: "Cart vehicle with two or four wheels used for carrying loads and usually pulled by a horse." 39. The above definition of "cart" shows that "wheels" are essential part and a prominent feature. Again expression "wheel" includes all kinds of wheels, viz., wooden/steel wheel with or without rubber collar on ....