TaxTMI 
TaxTMI 
2004 (1) TMI 657
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.... vehicles, vide paragraph 2 of the writ petition. 4. As alleged in paragraph 10 of the writ petition by Notification No. 7038 dated January 31, 1985 issued under section 4 of the U.P. Trade Tax Act, 1948 the animal drawn carts, their parts and accessories, attachment, etc., have been exempted from payment of tax, vide annexure 10 to the writ petition. 5. In the original assessment proceedings for the assessment year 1996-97 a show cause notice was issued on the basis of the report of the special investigation branch of the trade tax department that the "animal driven vehicle hubs" in respect of which exemption has been claimed by the petitioner are of the sizes of 340 mm (34 cm) and 160 mm (16 cm) and are very heavy in weight, which is about 20-21 kg. per piece, and hence they cannot be treated as the hub of the animal driven vehicle but these are "hubs of the truck and tractor trolley". 6. A detailed reply and the expert report of the chartered engineers and other evidence was submitted during the course of the assessment proceedings that these hubs of 20-21 kg. per piece, whose diameter is 340 mm (34 cm) and 160 mm (16 cm) are "animal driven vehicle hubs". Hence merely ....
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....nt order was passed by the assessing authority on March 12, 2001 vide annexure 3 to the writ petition. 12. Despite this, notices under section 21 for reassessment for the assessment years in question were issued to the petitioner allegedly on the grounds which had already been considered and adjudicated upon by the assessing authority as is clear from the original assessment orders. 13. The notices for reassessment under section 21 of the U.P. Trade Tax Act dated January 16, 2003 issued by the assessing authority (annexure 8 to the writ petition) for the assessment years 1996-97 to 1999-2000 both under the U.P. as well as under Central Sales Tax Act show that they have been issued on the ground that the Central Excise Department has found that the diameter of the hubs are 312 mm to 320 mm while the heaviest hubs of ADV are of the diameter of 220 mm. 14. It has also been mentioned in the notices under section 21 that the hubs manufactured by the petitioner were got inspected by the Central Excise Department from I.I.T., Kanpur, and on that basis the notice has been issued on the ground that the hubs manufactured by the petitioner are not the hubs of animal driven vehicle but are ....
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....al assessment proceedings and thereafter the assessment order has passed, then the said assessment order cannot be reopened under section 21 of the Act on mere change of opinion. 23. A perusal of the original assessment order dated March 30, 1999 for the assessment year 1996-97 clearly shows that in the assessment proceedings, the question of diameter of the hubs manufactured by the petitioner being 340 mm (340 mm for one side and 160 mm on the other side) as well as the weight of each hub being 20 to 21 kg. per piece was very much the subjectmatter of investigation vide the original assessment order dated March 30, 1999 (annexure 1 to the petition). 24. However, the assessing authority after considering the STO (S.I.B.) report, as well as the circular of the Commissioner, Trade Tax, U.P., Lucknow, dated February 26, 1992 including the decision of the Government dated February 17, 1992 has held that these hubs are normally used in animal driven vehicle and even if it can be used in other vehicles, still it is entitled for examination under the Notification No. 7038 dated January 31, 1985, as clarified by the State Government itself. 25. Thus the initiation of reassessment procee....
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....he circular issued by the Commissioner is binding upon the department. The departmental authorities cannot be permitted to contend that the circular issued by the Commissioner is contrary to law. Recently the Supreme Court in Simplex Castings Ltd. v. Commissioner of Customs, Vishakhapatnam [2003] 5 SCC 528, has held that it is not open to the Customs Department to prefer an appeal before CEGAT contrary to what was laid down in the circular, dated July 12, 1989. The said decision has referred to an earlier decision in Paper Products Ltd. v. Commissioner of Central Excise [1999] 7 SCC 84, in which it is observed: "This question is no more res integra in view of the various judgments of this court. This court in a catena of decisions has held that the circulars issued under section 37-B of the said Act are binding on the department and the department cannot be permitted to take a stand contrary to the instructions issued by the Board. These judgments have also held that the position may be different with regard to an assessee who can contest the validity or legality of such instructions but so far as the department is concerned, such right is not available. [See Collector of Central....
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....gible to tax merely because the assessing authority subsequently comes to take a different view of the matter. Para 6.-A perusal of the order of assessment in those cases would show that the assessing authority had, after elaborately considering the evidence before it, taken the view that what was being sold by the petitioners was nothing but cloth, cut in the shape of collar. Its turnover of sales was held exempt from the tax. Notification No. ST-4064/ X-960(4)-58, dated 25th November, 1958, provided for such exemption for 'cotton fabric of all varieties' subject to some exceptions." 35. It was further held in para 16 (page 200 of STC) as follows: Para 16. . . irrespective of the amplitude of the language used in section 21 of the Act, reassessment proceedings are not permissible on mere charge 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." 36. In the case of Royal Trading Co. v. Trade Tax Officer [2000] UPTC 642, it has been held that no reassessment proceedings can be legally initiated unless there was co....