TaxTMI 
TaxTMI 
2015 (11) TMI 1429
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....the Assessee under Section 81 of the Delhi Value Added Tax Act, 2004 read with Section 45 of the Delhi Sales Tax Act, 1975 ("DSTA") are directed against the impugned common order dated 9th/13th July 2010 passed by the Appellate Tribunal Value Added Tax ("AT") under Section 43 (6) of the DSTA read with Section 9 of the Central Sales Tax Act, 1956 ("CSTA") for Assessment Years (AYs) 2000-01, 2001-02 and 2002-03. Background Facts 2. The brief facts leading to the present appeals are that an assessment order under the DSTA for the period 2000-01 was passed in respect of the Appellant/Assessee on 30th September 2002 and a demand of Rs. 6,82,380 was made. On 31st March 2003 the assessment order for the period 2001-02 was finalized by raisin....
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....that it is a fit case to reassess under Section 24 of the DST Act 1975 (Repeated) according S.T 15 issued for 29th October 2007." 6. A similar order was passed in respect of AYs 2001-02, 2002-03. The further proceedings resulted in reassessment orders being passed on 10th October 2008 creating demands of Rs. 48,67,284, Rs, 71,62,323 and Rs. 48,79,881 for the AYs 2000-01, 2001-02 and 2002-03 respectively. 7. By a common order dated 31st April 2009 the appeals filed by the Appellant were disposed of by the Appellate Authority with a direction to the Appellant to again appear before the VATO within 15 days along with the documents. The further challenge by the Appellant to the said order of the Appellate Authority was negatived by the AT....
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....before the Court the relevant file notings. The original file, as well as the photocopies of the relevant pages, was produced by learned counsel for the Respondent. It showed that a complaint was received on 24th May 2007 in the office of the Commissioner against the Appellant. This was then forwarded by the Commissioner under cover of letter dated 14th June 2007 to the Deputy Commissioner (IX). On the basis of the said complaint, the VATO on 10th July 2007 issued a show cause notice to the Appellant. This was not in compliance with Section 24 (1) DSTA. 10. Section 24 (1) DSTA states that where, after a dealer has been assessed under Section 23 of the DSTA, the Commissioner has "reasons to believe" that the whole or any part of the turno....
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.... decision in Sales Tax Officer v. Uttareshwari Rice Mills 1972 (30) STC 567 and held: "the legislative intent is also clear because of the expression used in Section 24 itself i.e. "Commissioner has reasons to believe". The powers of the assessing officer to reopen assessment, though wide, are not plenary. The words used in the statute are "reason to believe" and not "reason to suspect". The expression "reason to believe" postulates belief and existence of reasons for that belief. It postulates that the assessing officer holds the belief induced by the existence of reasons for holding such belief." 13. In Samagya Consultants (P) Ltd. (supra), since the notice for reopening the assessment was issued without recording such reasons....
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....y to record reasons before issuing a notice for reopening a completed assessment. It is well settled in law that circulars issued by governmental authorities are binding upon the subordinate authorities. There is absolutely no reason, in this particular case, for the respondents to act in a manner contrary to the Circular issued by the Commissioner. That apart, we have gone through M/s. Samagya Consultant Pvt. Ltd. The Division Bench has specifically recorded that there must be an existence of reason on which belief is founded before a notice is issued. It is not necessary for the notice to state the reasons, but there must be existence of those reasons. 11. An Assessing Officer cannot view the reopening of a completed reassessment....
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....e assessment was reopened or what prompted the assessing authority to initiate the action taken by it. Even a court which is called upon to judicially review the decision of the assessing authority to reopen the assessment would be unable to fathom the reasons, if they are not recorded anywhere." 17. In light of the legal position explained in the above decisions, the Court concludes that in the present case the jurisdictional requirement of the VATO having to record the "reasons to believe" preceding the issuance of the show cause notice to the Assessee under Section 24 (1) DSTA was not complied with. Consequently, the entire re-assessment proceedings are bad in law. 18. Question (i) is answered in the negative, i.e., in favour of th....