TaxTMI 
TaxTMI 
2017 (7) TMI 1316
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.... final reassessment order passed during the pendency of the writ petition dated 18-7-2014 for the aforesaid years and finally also questioned the circular dated 16-6-2014 issued by the Commissioner, Commercial Tax, Chhattisgarh, Raipur. 2. The essential facts shorn of unnecessary details imperative to judge the correctness of the plea raised at the Bar are as under: - "2.1) The petitioner was granted mining lease by the State of Chhattisgarh for extracting lime stone for a period of 20 years. The petitioner made regular payment of royalty of lime stone extracted form the captive mines under the provisions of the Mines and Minerals (Regulation and Development) Act, 1957 time to time. 2.2) The petitioner Company was assessed for payment of entry tax for the years 2007-08, 2008-09 and 2009-10 on 24-8-2011, 30-8-2012 and 24-8-2013, respectively, and accordingly, entry tax was paid after taking the matter into appeal. It is the case of the petitioner that thereafter, the State vide the Chhattisgarh Entry Tax (Amendment) Act, 2014, has inserted Section 2(fff) in the Act, 1976 by inserting the new definition of "Market Value" with effect from 1-4-2014. Thereafter, the Commissioner, C....
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....ssued by the competent authority in July, 2014 and such a change of opinion on the basis of change in law and/or non-application of mind is impermissible in law and would not constitute a reason to believe for reopening the assessment already concluded on the basis of law applicable on the date of assessment for a particular year. Therefore, the impugned proceeding commencing from show cause notice concluded in reassessment order deserves to be quashed." 3. A detailed return has been filed on behalf of the State/respondents raising the plea that once the final order of reassessment has been passed on 3-9-2014 which is appealable under Section 48 of the Act, 2005, the writ petition as framed and filed is not maintainable in law The petitioner Company deliberately did not include the royalty aspect for determination of market value of goods which may be the cause for occurrence of huge difference in determination of market value. Therefore, the provision for reassessment has been invoked by the competent authority in exercise of the power contained in Section 22 (1) of the Act, 2005. 4. A rejoinder has been filed by the petitioner controverting the averments made in the return. 5.....
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.... AIR 1961 SC 372, M/s. Filterco and another v. Commissioner of Sales Tax. Madhya Pradesh and another (1986) 2 SCC 103, the writ petition cannot be thrown at this stage on the ground of alternative remedy." 6. Replying the submissions, Mr. Shashank Thakur, learned Government Advocate appearing on behalf of the State/respondents, would submit as under: - "1. The petitioner has effective and efficacious statutory alternative remedy of invoking the jurisdiction of appellate authority under Section 48 of the Act, 2005 by way of appeal, therefore, the writ petition as framed and filed is not maintainable. Reliance has been placed upon the judgment of the Supreme Court in the matter of Union of India and others v. Major General Shri Kant Sharma and another (2015) 6 SCC 773. 2. The assessing authority has rightly reopened and assessed the entry tax in exercise of power conferred under Section 22 (1) of the Act, 2005. In Section 22 (1) of the Act, 2005, "reason to believe" is not required for reopening the concluded assessment, merely on the subjective satisfaction of the assessing authority, proceeding for reassessment can be reopened and, therefore, it has rightly been reopened. 3.....
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....nd as such, the writ petition is not maintainable which has been opposed by learned counsel for the petitioner stating that since it is the case where jurisdictional fact that is reason to believe has been raised, therefore, the writ petition would be maintainable in light of the decision of the Supreme Court in Calcutta Discount Co. Ltd. (supra). 10. In Calcutta Discount (supra), Their Lordships of the Supreme Court have clearly and unmistakably held that the High Court in appropriate cases has power to issue an order prohibiting the Income Tax Officer from proceeding to reassess the income when the conditions precedent do not exist. K.C. Das Gupta, J, speaking for the Supreme Court and delivering the majority judgment held as under: - "It is well-settled however that though the writ of prohibition or certiorari will not issue against an executive authority, the High Courts have power to issue in a fit case an order prohibiting an executive authority from acting without jurisdiction. Where such action of an executive authority acting without jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessary harassment, the High Courts, it is well sett....
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....ere is an allegation of infringement of fundamental rights or when on the undisputed facts the taxing authorities are shown to have assumed jurisdiction which they do not possess can be the grounds on which the writ petitions can be entertained. But normally, the High Court should not entertain writ petitions unless it is shown that there is something more in a case, something going to the root of the jurisdiction of the officer, something which would show that it would be a case of palpable injustice to the writ petitioner to force him to adopt the remedies provided by the statute. It was noted by this Court in L. Hirday Narain v. ITO (1970) 2 SCC 355 : AIR 1971 SC 33 that if the High Court had entertained a petition despite availability of alternative remedy and heard the parties on merits it would be ordinarily unjustifiable for the High Court to dismiss the same on the ground of non-exhaustion of statutory remedies; unless the High Court finds that factual disputes are involved and it would not be desirable to deal with them in a writ petition." 13. The enunciation of law laid down in Calcutta Discount Co. Ltd. (supra) reiterated in the matter of The Commissioner of Income-tax....
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....er of any court or Tribunal, proceed in such manner as may be prescribed, to assess or re-assess, as the case may be, the tax payable by such dealer after making such enquiry as he considers necessary, and assess or re-assess to tax." 16. A focused glance of the aforesaid provision would show that the assessing authority is empowered to reopen the assessment "for any reason", if any sale or purchase of goods liable to tax 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; and 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 Tribunal which has become final. 17. This power under Section 22 (1) of the Act, 2005, cannot be exercised as a matter of course. This power can be exercised only in the circumstances which are specified in the Section. It is a prerequisite that before issuing notice the officer must record the reasons for doing so. This is a sufficient safeguard for an assessee against frequent reopening of....
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.... 1947 which also empowers the assessing authority "if for any reason the turnover of sales or the turnover of purchases of a dealer has escaped assessment or has been under-assessed", the Supreme Court while examining the ambit and scope of reassessment has held that existence of a reason that the turnover of dealer escaped assessment or has been under-assessed is a condition precedent to issuance of notice of reassessment under Section 12 (8) of the Act and the existence of such reason is sine qua non for the issuance of notice. Their Lordships concluded in paragraph 8 of the report as under: - "8. Although the opening words used in section 12(8) are "if for any reason" and not "if the sales tax authority has reason to believe", the difference in phraseology, in our opinion, should not make much material difference. A reason cannot exist in vacuum. Somebody must form the belief that reason exists and looking to the context in which the words are used, we are of the view that it should be the sales tax authority issuing the notice who should have reason to believe that the turnover of a dealer has escaped assessment or has been under-assessed. The approach in this matter has to b....
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....s to be based on fulfillment of certain precondition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, 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...." 23. It is well settled law that mere change in opinion/reaching different or divergent view (as to one reached at the time of original assessment) while perusing same material cannot give rise to necessary precondition of "reason to believe" to reopen concluded assessments and accordingly, reassessment cannot be done on mere change in opinion. The Supreme Court in the matter of State of Uttar Pradesh and others v. M/s. Aryaverth Chawl Udyoug and others has clearly held that discovery of an inadvertent mistake or non-application of mind during assessment would not be a justified ground to re-initiate the concluded assessment and has held in paragraph 31 as under: - "31. In case of there being a change of opinion, there must necessarily be a nexus that requires to be established between the "change of opinion" and the material present b....
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....ty has not indicated any material at all that has given rise to such reason and thus, on the basis of mere "change of opinion" concluded that exemption on purchase tax has wrongly been allowed." 26. Similar view has been expressed by the M.P. High Court, as already noticed, in Laduram Ramniwas (supra). 27. Noticing the aforesaid statutory provisions and the principles relating to reopening of concluded assessment emanating from the judgments of the Supreme Court, now, I would proceed to examine the factual matrix of the case in hand in light of those principles and statutory provisions. 28. In the present case, the concluded assessment has been sought to be reopened on the basis of amendment made in the definition of "market value" as contained in the Entry Tax Act and thereafter, certain directions have been issued by the Commissioner, Commercial Tax even to reopen the concluded assessment. The definition of "market value" as contained in the Act, 1976, suffered amendment by the Chhattisgarh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar (Sanshodhan) Adhiniyam, 2014 and new definition in shape of Section 2(fff) was introduced explaining/clarifying the earlier definition which has b....
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....d on the said prospective amendment. 33. In M/s. Aryaverth Chawl Udyoug 's case (supra), in similar fact situation, Their Lordships of the Supreme Court have clearly held that subsequent change in law according to which the assessment was conducted cannot constitute change in opinion for reopening the concluded assessment. It is impermissible in law when the Act does not specify the operation of law as retrospective. Their Lordships further held that discovery of an inadvertent mistake or non-application of mind during assessment would not be a justified ground to re-initiate proceedings. 34. Further, in the matter of M/s. Reliance Jute and Industries Ltd. v. C.I.T., West Bengal, Calcutta, Their Lordships of the Supreme Court have held that it is a cardinal principle of the tax law that the law to be applied is that in force in the assessment year unless otherwise provided expressly or by necessary implication. 35. Thus, it is crystal clear that in the instant case, assessment has been made as per law in force and after the definition of "market value" is amended with effect from 1-4-2014, and on that basis, circular has been issued by the State Government, the proceeding fo....