TaxTMI 
TaxTMI 
2010 (4) TMI 992
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.... for Rs. 1,83,52,863 whereas as per the bank statement, the actual sale was for Rs. 2,10,09,586. (c) Sale to M/s. Siddhanath Ind. was for Rs. 54,93,575 whereas as per the bank statement, the actual sale was for Rs. 94,05,000. (B) Inter-State movement: Vehicle numbers mentioned in the invoices for inter-State movement were bogus. (C) Following bogus C forms were filed by the petitioners: (a) M/s. Laxmiputra Chemox Inds., Karnataka for Rs. 11,94,334. (b) M/s. Gurudeo Chemox Inds., Karnataka for Rs. 11,07,474. (c) M/s. Black Diamond Petrochemicals, Gujarat. (d) M/s. Abindo Paint Chem Inds., West Bengal for Rs. 54,09,369. (e) M/s. Avon Petro Chemicals, Karnataka for Rs. 60,75,762. The factual background The petitioners in regular course of their business had purchased raw material for carrying out their manufacturing activities and availed of Modvat credit on the same wherever applicable. They produced and sold final product on payment of excise duty. They filed quarterly sales invoices. The sales tax was paid wherever applicable. As per the normal procedure, a dealer is required to file the returns as per provisions of the rule 22 of the Bombay Sale....
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.... dated March 10, 2008 for supplying copies of letters sent by the respondents to the various R.T.O. offices, the respondents failed to do so. He further submitted that in any case initiation of reassessment proceedings for the period April 1, 1999 to March 31, 2000 is barred by limitation. The learned counsel for the petitioners further submitted that the petitioners accepted the sale consideration by cheques alone from their various customers. All these facts could be seen from their bank statement. According to him, the burden is on the respondents to prove that the C forms submitted by the petitioners were bogus. The respondents failed to produce any cogent evidence on record to show that C forms submitted by the petitioners were bogus and that the vehicle numbers given in the sales invoices were also bogus. Therefore, it is not permissible in law to reopen the assessment for the assessment period 1999-2000, that too, just before the lapse of eight years. Mr. Jetly, learned counsel for the petitioners submitted that it is well settled that expression "reason to believe" contained in section 35 of the BST Act, 1959 cannot be entirely subjective satisfaction of the....
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....as sought to be ensured by taking a declaration in the prescribed form C from the purchasing dealer. However, if the declaration is found to be false or if the goods are utilized by the purchasing dealers for some other purpose contrary to the intention expressed by them in the declarations, the object and purpose of giving deduction/concessional rate of tax may be defeated. Mr. Jetly, learned counsel for the petitioners, further submitted that the excise authority accepted the delivery challans of the petitioners of the same vehicle numbers which were disputed by the respondents. The respondents are not concerned by which vehicles the goods were transported from one State to another but they are only concerned with C forms issued by the purchasers, therefore, the concerned officers misinterpreted the expression "reason to believe" at the time of issuing the impugned notices dated February 14, 2008. On the other hand, Mr. Sonpal, learned "A" Panel Counsel on behalf of the respondent, submitted that at the time of issuing the impugned notices dated February 14, 2008 the concerned authority verified all the facts and record of the case and on the basis of that, came to t....
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....or reassessment could be initiated even after five years but before expiry of eight years, if it is found that there was disclosure of incorrect facts or fraud is committed by the assessee. He submitted that in the present case the petitioners submitted bogus C forms showing inter-State sales and also vehicle numbers given in challans were in respect of scooters, dumpers/tipper, Mahindra utility, etc., which were incapable of transporting the goods alleged to have been sold by the petitioners to the traders from other States. The undermentioned chart in the first three columns gives the vehicle numbers shown in the invoices whereas the last but one column showing class of vehicles found out from the RTO record by the respondent: Sr.No. Invoice No. Vehicle No. mentioned on invoice Class of vehicle Report from RTO authority 1 160 MH-04-4085 Hero Honda RTO, Thane 2 212 MH-04-1581 Hero Honda RTO, Thane 3 218 MH-04-628 LML Vespa RTO, Thane 4 208 MH-04-6360 Bajaj Auto RTO, Thane 5 224 MH-04-1374 Chetak RTO, Thane 6 236 MH-04-9211 Bajaj Super RTO, Thane 7 287 MH-04-3405 Bajaj Auto RTO, Thane 8 211 MH-15-G-1989 Open delivery van RTO, Nashik 9 226 MH-15-B-1415 ....
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.... forms to show that those parties were genuine. Relying on those documents, Mr. Jetly submitted that for the purpose of reopening the assessment, the limitation was of five years, however, in the present case the notices were issued in the year 2008 and therefore, the same was highly belated. Mr. Jetly, with respect to the details of the vehicles are concerned, submitted that some vehicle numbers were accepted by the Excise Department at the time of payment of excise duty and therefore, the respondents could not reopen the same issue for reassessment. In support of his various submissions, he relied on the following judgments: (1) Balaram (T. S.), ITO v. Volkart Brothers [1971] 82 ITR 50 (SC). (2) Deva Metal Powders Pvt. Ltd. v. Commissioner, Trade Tax, U.P. [2008] 221 ELT 16 (SC) . (3) Asian Paints Ltd. v. Deputy Commissioner of Income-tax [2009] 308 ITR 195 (Bom) (W.P. No. 1351 of 2008.) (4) Asteroids Trading and Investments P. Ltd. v. Deputy Commissioner of Income-tax [2009] 308 ITR 190 (Bom) (W.P. No. 1352 of 2008). (5) IL and FS Investment Managers Ltd. v. Income-tax Officer [2008] 298 ITR 32 (Bom). (6) M.J. Pharmaceuticals Ltd. v. Deputy Commission....
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....facie material is sufficient to conclude prima facie suppression of correct information or disclosure of wrong information by the assessee, assuming the assessee to be right with respect to the nature of C forms concerned. Needless to mention that sufficiency of the material is not required to be looked into. Some strong prima facie material is sufficient to reopen assessment. The apex court, in the matter of Income-tax Officer v. Mewalal Dwarka Prasad reported in [1989] 176 ITR 529, held that if the notice issued under section 148 of the Income-tax Act is found to be good in respect of one item, it cannot be quashed under article 226 of the Constitution of India on the ground that it may not be valid in respect of some other items. The said ratio holds good even in this case. In the present case, the notice issued by the Assistant Commissioner of Sales Tax dated February 14, 2008 in respect of reassessment is a combined notice which includes the element of submitting false C forms, concealment of sale and providing bogus numbers of vehicles on the challans. The chart produced hereinabove in respect of vehicle numbers itself prima facie, shows that the goods were transported ....
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....iod, it is found that the total amount of tax paid with returns is less than eighty per cent of the tax so assessed and if the dealer has been assessed under sub-section (2) of section 33 in respect of any of the five periods immediately preceding the said period, then the Commissioner may, at any time, within one year of the date of passing of the assessment order in which it has been found that the tax paid with returns is less than eighty per cent of the tax assessed, after giving the dealer a reasonable opportunity of being heard, proceed to assess or reassess, to the best of his judgement, the amount of tax due from such dealer, in respect of the period or periods, as the case may be, for which the dealer has been assessed under sub-section (2) of section 33. (2) Nothing in sub-section (1) or (1A) shall apply to any proceeding (including any notice issued) under section 57 or 62. (3) Nothing in section 57 or 62 shall affect a proceeding under this section." (emphasis(1) supplied) A bare reading of section 35(1)(b) of the BST Act, 1959 shows that the authority can reopen the assessment within eight years if (1) concealment of sales or purchases (2) concealment of any m....
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....tain any information and that there was neither evidence of manipulation nor evidence or collusive transactions referred to in the letter and that no inquiries were made by the Income-tax Officer after the receipt of the letter so as to constitute information. We are unable to agree with the said view of the High Court. The contents of paragraph 2 of the letter of Shri Bagai refer to the statement containing financial information regarding Maharaja Shree Umaid Mills Ltd. which was annexed to the letter of Shri Bagai. The said statement contained information derived from the Bombay Stock Exchange Directory about the financial condition of Maharaja Shree Umaid Mills Ltd. during the period 1965-70 which indicated that during this period the company has prospered and that the book value per equity share had risen from Rs. 318.55 for the year ending December 31, 1965 to Rs. 401 for the year ending December 31, 1970, the earning per share rose from Rs. 8.37 per share to Rs. 44 per share and that dividend percentage had also risen from two per cent to 10 per cent for the same period. 11.. On the basis of the information contained in the letter of Shri Bagai and the documents ....