2017 (9) TMI 326

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....petitioner procured iron and steel bars from various suppliers and used the same in making of leaf springs. Petitioner, during said period, sold leaf springs worth Rs. 56,18,17,106/- in the State of Madhya Pradesh. That on the basis of earlier determination order dated 3.6.2003 petitioner paid MPVAT @ 4% on the sale of leaf spring and also filed returns during the relevant period. That in a suo motu proceedings drawn in exercise of powers under section 70 of MPVAT Act Commissioner, Commercial Taxes vide order dated 5.6.2007 reviewed the earlier order dated 3.6.2003 and 19.11.2003 which were passed under section 68 classifying leaf spring as iron and steel under Entry 30 (v) of Part II of Schedule II. However, by order dated 5.6.2007 it was held that the leaf spring being part of motor vehicles it was classified under Entry 1 of Part IV of Schedule II which is a residuary clause as it is existed at relevant time (Part IV of Schedule II now stand substituted by notification No.44 dated 17.12.2015 with effect from 18.12.2015) and subjected the leaf spring to 12.5 % tax under MPVAT Act. Evidently as the order dated 5.6.2007 was passed in purported exercise of powers under section 70 th....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....is not disputed by the petitioner. Be that as it may. The Deputy Commissioner, Commercial Tax, passed the re-assessment order on 19.12.2014 holding leaf spring sold by the petitioner classifiable under Schedule-II Part-IV of the M.P. VAT Act liable to tax @12.5% raising the demand of Rs. 4,77,54,454/-. The demand for penalty proposed with show cause notice was however dropped. This order is under challenge in this writ petition. 9. The challenge is on two grounds; firstly, that it is beyond the jurisdiction of the authority concerned to reassess merely on the basis of change of opinion, which in turn is on the basis of a judgment and secondly, that being obligatory on the part of Assessing Authority to pass an order within one year from the date of initiation of proceedings, as contemplated under sub-section (3) of Section 21 of M.P. VAT Act. The order having been passed beyond one year is nonest in the eyes of law as it was beyond the jurisdiction of the authority to pass order after expiry of one year. 10. Though it is contended on behalf of the petitioner that impugned order passed after a period of one year from the date of initiation of proceedings, even after calculatin....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....--(Shorter Oxford English Dictionary). It is suggested that the word "determine" was employed in Rule 33 with a definite intention to set the limit within which the final order in the matter of assessment should be made, the limit being three years. We find it difficult to accept that in the context of sales tax legislation the use of the words "proceed to assess" and "determine" would lead to different consequences or result. In this connection the words which follow the word "determine" in Rule 33 must be accorded their due signification. The words "assess the tax payable" cannot be ignored and it is clearly meant that the assessment has to be made within the period prescribed. Assessment is a comprehensive word and can denote the entirety of proceedings which are taken with regard to it. It cannot and does not mean a final order of assessment alone unless there is some thing in the context of a particular provision which compels such a meaning being attributed to it. In our judgment despite the phraseology employed in Rule 33 the principle which has been laid in other cases relating to analogous provisions in sales tax statutes must be followed as otherwise the purpose of a prov....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....hers Vs. Simplex Concrete Piles (India) Limited, (2013) 11 SCC 373, which was a case under section 147, 149 (1) (a) of the Income Tax Act, 1961 it was held: "2............... In any event, at the relevant time, when the assessment order got completed, the law as declared by the jurisdictional High Court, was that the civil construction work carried out by the assessee would be entitled to the benefit of Section 80-HH of the Act, which view was squarely reversed in CIT v. N.C. Budharaja and Co., 1994 Supp (1) SCC 280. The subsequent reversal of the legal position by the judgment of the Supreme Court does not authorise the Department to reopen the assessment, which stood closed on the basis of the law, as it stood at the relevant time." 14. In Binani Industries Limited, Kerala Vs. Assistant Commissioner of Commercial Taxes, VI Circle, Bangalore and others, (2007) 15 SCC 435, it is held: "24. The issues can be looked at from a different angle. Undisputedly, the 1996 Circular was binding on the revenue authorities as is spelt out in the case of 12.4.1996 and 23.10.1999 Circulars. The assessments were completed on the basis of 12th April, 1996 Circular. Merely because the Commi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t, then, in the garb of re-opening the assessment, review would take place. 7. One must treat the concept of "change of opinion" as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1st April, 1989, Assessing Officer has power to re-open, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. Our view gets support from the changes made to Section 147 of the Act, as quoted hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the words "reason to believe" but also inserted the word "opinion" in Section 147 of the Act. However, on receipt of representations from the Companies against omission of the words "reason to believe", Parliament re-introduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the Assessing Officer." 16. In Eisher Motors Ltd. and another Vs. State of M.P. and others, 2005 (1) M.P.L.J. 408, learned Single Judge of this Court after relying on the decision by Supreme Court held: "7. A careful reading of provision r....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....tax, hence deduction was allowed. If the deductions were wrongly allowed then for correction of mistake Section 19 of the Act of 1958 can not be invoked as held by the Division Bench of this Court in Commissioner of Sales Tax v. Filterco Neemuch, [1996] 29 VKN 162. In that case assessee, a registered dealer was manufacturing compressed woolen felts which were sold in State as well in the course of inter-State trade & Commerce. Assessee requested the Commissioner of Sales Tax to treat the merchandise covered under Entry No. 6 of Schedule I. The said request after due consideration was allowed and the sale turnover of woolen felts manufactured by assessee was not subjected to tax during the period 1971 onwards and no tax was levied. However, in Union of India v. Gujrat Woolen Felt Mill AIR 1997 SC 1548 it was held that non woven felts manufactured from woolen fibers by machine pressing and used for filtration in heavy industries were 'woolen 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 can not ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....g under clause (e) , proceed in such manner as may be prescribed, by issue a notice in the prescribed form appointing a place which may be the business premises or at such place specified in the notice to assess or reassess, as the 35 case may be the tax payable by such dealer after making such enquiry as he considers necessary, and assess or re-assess to tax." 19. Thus re-assessment of tax is permissible only when it has been under assessed or has escaped assessment, or has been assessed at a lower rate, or any wrong deduction has been made while making the assessment or a rebate of input tax has incorrectly been allowed, while making the assessment or is rendered erroneous and prejudicial to the interest of revenue. Consequent to or in the light of any judgment or order of any Court or Appellate Board, which has become final. Thus, except these circumstances no other grounds available for the Commissioner to reassess the tax. 20. In the present case evidently on the basis of earlier determination order dated 3.6.3003 the petitioner filed the return for the year 2006-07 and the assessment order was passed on 26.5.2009 accepting tax @ 4% on the leaf springs being declared goo....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....determining the rate of tax on such goods in accordance with such procedure as may be prescribed. 24. That sub section (3) stipulates that any order passed by the Commissioner under sub-section (1) and (2) shall have a prospective effect and shall be binding on the authorities referred to in Section 3 in all proceedings under this Act except appeals. 25. In view whereof, the order passed on 5.6.2007 was applicable for next financial year i.e. 2007-2008 and not 2006- 2007. For this reason also the impugned order cannot be upheld. 26. In view whereof, the consequential order passed under Section 13 of the M.P. Entry Tax in respect of assessment year 2006-2007 read with section 21 (2) of MPVAT Act is also set aside. 27. In the result, petitions are allowed to the extent above. There shall be no costs. ============= Document 1 "व्यवसाई द्वारा प्रस्तुत लिखित पक्ष समर्थन का अवलोकन किया गया। पाà¤....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... दर से करारोपरण कर दिया गया था। Document 2 "व्यवसाई द्वारा प्रस्तुत लिखित पक्ष समर्थन का अवलोकन किया गया। पाया गया कि मूल कर निर्धारण के समय आयुक्त महोदय के द्वारा मेसर्स जमना ऑटो इण्डस्ट्रीज लिमिटेड, मालनपुर (2004) 3एस.टी.जे. 69 (सी.सी.टी. एम.पी.) में à....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....†à¤²à¥‹à¤šà¥à¤¯ वस्तु के सम्बंध में करदाताओं को पूर्व पारित आदेशों के कारण कोई भ्रांति न रहें, इस हेतु स्व-प्रेरणा से आयुक्त के द्वारा प्रकरण लिया जाकर मेसर्स जमना ऑटो इण्डस्ट्रीज एवं अन्य के प्रकरण में दिनांक 05 जून 2007 को पूनः आदेश पारित à¤....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....¿à¤°à¥à¤£à¤¯ के अंश इस प्रकार है- M/s Jamna Auto Industries Ltd. Gulmohar Garden, City Centre, Gwalior State 2006-07 "Interpretation of entries- and selling automobile leaf springs for use in various types of motor vehicles like Tata, Telco, Mahindra and Mahindra etc. The appellant was registered with the Govt. of Maharashtra and was also granted ISO certificate as a manufacturer of automobile leaf springs and assemblies. The appellant was selling these leaf springs only to auto dealers for use in motor vehicles. Their published price list also indicated that they were for various auto vehicles only. All these facts predominantly established that leaf springs manufactured and marketed by the appellant were for motor vehicles only. Merely because someone puts these leaf springs to any other use can not take them out of the scope of specific entry relating to motor vehicles parts and accessories. It is well settled law that a particulars use to which an article is put can not decide the real nature or character of that article." The a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....¤¾à¤¨ अधिनियमों में कॉमन पारलेंस की दृष्टि से किस वस्तु को किस अर्थ में लिया जाता है. यह अत्यंत महत्वपूर्ण है, न कि तकनीकी अर्थों में वह वस्तु क्या है। कॉमन पारलेंस के सम्बंध में कलेक्टर ऑफ सेन्ट्रल एक्साईज विरूद्ध पार्ले एक्सपोरà....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....य होगी। Document 4 मेसर्स मैप स्प्रिंग प्रा.लि. के प्रकरण में माननीय उच्च न्यायालय, राजस्थान के द्वारा पारित आदेश सीधे सीधे लीफ स्प्रिंग से सम्बंधित है। यह निर्णय दिनांक 10 मार्च 2006 को निर्णित हुआ है। इस निर्णय के परिप्रेक्ष्य में व्यवसाई क....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....¥à¤µà¤¾à¤°à¤¾ कर संग्रह किया गया है, एवं कर की राशि जमा कराई गई है। कर निर्धारण के समय भी उनके द्वारा कर निर्धारक अधिकारी के समक्ष सारे तथ्य रखे गये थे। अतः शास्ति का कोई प्रश्न ही नहीं उठता है। व्यवसाई का कथन मान्य किया जाता है। अतः मध्यप्....