2018 (2) TMI 1483

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....aised in the writ petition as we find that the writ petition can be disposed of and decided in view of the statement made by the counsel for the respondents that the original records relating to the present case have been misplaced or weeded out and hence it is not possible to establish and show that the assessing authority had recorded 'reasons to believe' in writing before issuing notice dated 9th November, 1999 under Section 24 of the Act. 4. Section 24 of the Act reads as under:- "24.Turnover escaping assessment.- (1) Where after a dealer has been assessed under section 23 for any year or part thereof, the Commissioner has reason to believe that the whole or any part of the turnover of a dealer in respect of any period has escaped assessment to tax or has been under-assessed or has been assessed at a rate lower than the rate at which it is assessable, or any deduction has been wrongly made therefrom the Commissioner may- (a) within six years from the date of final order of assessment, in a case where the dealer has concealed, omitted or failed to disclose fully the particulars of such turnover; and (b) within four years from the date of final order of as....

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....rded on the order sheet. Non compliance will be viewed seriously." 5. Similar view has been taken in Shruti Fasteners Limited versus Commissioner of Value Added Tax, 2015 SSC Online Del 12952, wherein it has been held:- "9. The narration of facts as noted hereinbefore show that no 'reasons to believe' were formally recorded by the VATO on the file prior to initiating the proceedings under Section 24 of the DSTA. All that was stated in the order dated 10th October 2007 was that the assessment was being reopened "as per direction of higher authorities." After it became apparent to the Court that there was no order of the VATO separately recording the 'reasons to believe', learned counsel for the Respondent was asked to produce 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 20....

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....ief." 13. In Samagya Consultants (P) Ltd. (supra), since the notice for reopening the assessment was issued without recording such reasons, it was held to be 'indefensible'. The matter travelled up to the Supreme Court and the Department's appeal was dismissed by an order dated 23rd April 2008, which read: "We agree with the view taken by the High Court that in the absence of any recorded satisfaction for re-opening the concluded assessment of the assessee for the year 1996-97 by the assessing authority, the assessment could not be re-opened." 14. In Jagdish Cold Storage & Ice Factory v. The Commissioner of Sales Tax, Delhi 2007-08 (46) DSTC J-1 (Del) a similar issue was addressed to the Court. It is noticed that Circular No.7 of 2001-02 dated 3rd March 2001 has been issued by the Commissioner of Sales Tax after the judgment in Samagya Consultants (P) Ltd. v. CST (supra) to the following effect: "Therefore it is emphasised upon all the Assessing Authorities that the aforesaid observations of the Hon'ble Delhi High Court be strictly adhered to and before issuing the notice in form ST-15 under the aforesaid provision of Section 24, the reasons therefore invari....

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....t know what weighed in the mind of the assessing authority for reopening the assessment. It is for this reason that the Commissioner of Sales Tax issued the above circulars that there must be a record of the reasons. Otherwise, it is impossible for any Assessee to know why the 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." 6. Counsel for the Revenue, however, has submitted that in the present case, the re-opening under Section 24 of the Act was on a specific direction given by the Commissioner vide order dated 26th October, 1999 on an application filed by M/s....