TaxTMI 
TaxTMI 
2009 (8) TMI 1230
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....eeding under section 21 of the U.P.Trade Tax Act for the assessment year 1999- 2000 (U.P/ Central) (iii) Any other and further writ, order or directions which this Hon'ble Court may deem fit and proper in the circumstances of the case be also issued in favour of the petitioner." The petitioner of Writ Petition no.604 of 2006 and the petitioner of Writ Petition No.605 of 2006 are hereinafter referred to as petitioner no.1 and petitioner no.2 respectively. 3. The background facts of the case in a nutshell essentially are as follows: 4. The petitioners are a registered dealers under the provisions of U.P.Trade Tax Act (hereinafter referred to as the "Act") as well as under Central Sales Tax Act ( in short "CST Act") and are carrying on the business of purchase and sale of Petroleum oil and petroleum products. The petitioner no.1 is owned by Jagarti Khetan and the petitioner no.2 is owned by his wife Smt. Mukta Khaitan. The assessment order for the assessment year 1999-2000 was passed by the assessing authority under rule 41(8) of U.P.Act and under section 9(2) of CST Act. 5. The petitioner no.1 had disclosed interstate sales of ₹ 13,32,24,500/- against form- C which were iss....
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....342160.00 6- 0951810 537680.00 7- 0951811 562120.00 8- 0248852 478400.00 9- 0248853 454480.00 10- 0248854 583700.00 11- 0248855 406640.00 12- 0248859 611520.00 13- 0248860 430560.00 14- 0248861 479960.00 15- 0248873 474240.00 16- 0248872 499200.00 17- 0248881 483860.00 18- 0248886 310960.00 19- 0248887 207480.00 20- 0248897 478400.00 (ii) Deputy Commissioner Excise and Taxation, Bhivani vide his letter no.823 dated 02-8-2005 following form- C found unverified: Form-C Amount 1- 0996530 499200.00 2- 0996535 478400.00 3- 0996536 485940.00 4- 0996540 478400.00 5- 0996546 478400.00 6- 0996549 478400.00 7- 0996550 358800.00 8- 0996325 488800.00 9- 0996324 308256.00 The above Form- C are issued to M/s Mittal Sales Corporation, H.B.Bhivani R.C.No.6530 and not tyo Sai Nath Trader H.B.Bhivani R.C.No.6529 (iii) Deputy Commissioner Excise and Taxation Bhiwani (Haryana) vide his letter no.624 dated 02-8-2005 informed that following form C have been actually issued to Sai Nath Trader H.B Bhivani R.C.No.6529 and not to Mittal Sales Agencies, Bhiwani (Haryana) R.C.No.6530 1- 0876966 357136.00 2- 0876978 478400.00 3....
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....d disclosed interstate sale which was covered by Form-C,was assessed @ 4%. The Form-C was issued by the purchasers of other States to whom sale during interstate sale was affected and at the time of assessment no defect or discrepancy in them was pointed out. It is further submitted that there was no material or reasons to believe that any turnover has escaped assessment under the Act and It is further contended that onus which lay upon the petitioner, has been discharged by submitting genuine Form-C in respect of interstate sale. It is the department to prove beyond doubt that the exemption allowed in the assessment year, was wrong. It is also submitted that the proceeding under section 21 have been illegally initiated by respondent no.3 against the petitioners. He has further submitted that no liability may be fastened on a selling dealer for the defaults committed by the purchasers in issuing forms. Provisions of the CST Act does not place on the selling dealers the burden of making all sorts of verification. 12. Learned Standing Counsel appearing on behalf of the respondents has submitted that the notices issued by respondent no.2 & 3 contained sufficient information and relev....
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....ct were initiated and the impugned notices dated 24-2-2006 have been issued after seeking permission from respondent no.2. Before granting permission to respondent no.3 for initiating proceeding under section 21 of the Act, proper opportunity was given to the petitioner and the impugned orders have been passed after considering their reply and their submissions. Therefore, it cannot be said that the respondent no.2 has not considered the submissions of the petitioner and the impugned order has been passed without application of mind. 16. Provisions of Section 8(1) and Section 8(4) of the CST Act and Rule 12(8)(c)(1a) of the Rules clearly indicate that the dealer may be entitled to benefit of concessional rate of tax by submitting Form-C only if such forms are obtained by the registered dealer (purchasing dealer) from the Prescribed authority and such declaration/ Form-C should be signed by the competent person. The benefit of concessional rate of tax taken by the petitioner lacks above mentioned mandatory requirements of the CST Act and the Central Sales Tax Rules. Therefore, the proceedings under section 21 of the Act cannot be said to be invalid or unjustified . 17. Learned cou....
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.... the belief that the whole or any part of the turnover of a dealer has, for any reason escaped assessment to tax for some year. If such a basis exists, the assessing authority can proceed in the manner laid down in the section. To put it differently, if there are, in fact, some reasonable grounds for the assessing authority to believe that the whole or any part of the turnover of a dealer has escaped assessment, it can take action under the section. Reasonable grounds necessarily postulate that they must be germane to the formation of the belief regarding escaped assessment. If the grounds are of an extraneous character, the same would not warrant initiation of proceedings under the above section. If, however the grounds are relevant and have a nexus with the formation of belief regarding escaped assessment, the assessing authority would be clothed with jurisdiction to take action under the section. Whether the grounds are adequate or not is not a matter which would be gone into by the High court or this Court for the sufficiency of the grounds which induced the assessing authority to act is not a justiciable issue .What can be challenged in the existence of the belief but not the ....