TaxTMI 
TaxTMI 
2019 (11) TMI 373
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....ined the very same transactions, coming to the conclusion that the concessional rate of tax claimed was in order. He goes so far as to specifically state and record this in the original orders of assessment. While this is so, the petitioner received pre-assessment notices dated 06.12.2006 proposing to bring to tax the very same transactions at regular rate, thus denying the petitioner the benefit of concessional rate of tax. This, according to the petitioner, constitutes a change of opinion or review of the original stand adopted in assessment that is impermissible in law. He points out that neither the prerevision notices nor the impugned orders of assessment refer to any new material or information gathered by the department or that has come to its notice, warranting the revision of assessments, in law or on facts. 4. He relies on a judgment of the Supreme Court in the case of State of Uttar Pradesh and Others Vs. Aryaverth Chawl Udyoug and Others [(2016) 91 VST 1 (SC)], wherein, the Bench, in the context of the U.P. Trade Act, 1948, states that the Assessing Authority can reassess turnover only on the basis of new material and not upon a change of opinion. 5. Per contra, Mr.Mo....
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.... any reason'. The language utilised is wide and grants unrestricted powers to an assessing authority to bring to tax turnover that has in his opinion escaped assessment for any reason whatsoever. 8. In Surya Fertilisers (supra), a Division Bench of this Court, in considering the validity of an assessment invoking powers under Section 16 of the Act, holds that the Assessing Officer can bring to tax turnover that has escaped on account of an erroneous understanding of the nature of transaction, a wrong understanding of the provisions of the Act or erroneous exclusion of taxable turnover from the ambit of tax. The ratio thereof has been confirmed in Yercaud Coffee Curing Works Ltd. (supra) by another Division Bench (Justice Sethuraman being common to both Benches). 9. In the case of Dinod Cashew Corporation (supra), a subsequent Division Bench has reiterated the same view as aforesaid. A specific argument advanced by the petitioner in that case was a comparison of the provisions relating to re-assessment in terms of the Indian Income Tax Act with the Tamil Nadu General Sales Tax Act. The Bench noted that the provisions of the Income Tax Act used the phraseology 'reason to be....
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.... 329, where the Full Bench observed as follows : "The 'escape' that serves as the foundation of the jurisdiction to reopen an assessment is that of 'turnover' and not, be it noted, an assessment. 'Turnover' escapes when it is not noticed by the officer either because it is not before him by reason of an inadvertence, omission or deliberates concealment on the part of the assessee, or because of want of care on the part of the officer the turnover though in the books has not been taken notice of. This would be the natural and normal meaning of the expression 'turnover which has escaped' in rule 17(1)."... ....The argument before the Supreme Court was that section 26 was not applicable to a case where income was returned but was initially held to be not liable to tax. This contention was negatived and the Supreme Court held that the Agricultural Income-tax Officer was competent under section 26 of the Bihar Act to assess an item of income which he had omitted to tax earlier, even though in the return that income was included and the Agricultural Income-tax Officer then thought it was exempt. In paragraph 16 of its judgment the Supreme Court point....
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....or re-assessment merely if, in his opinion, turnover liable to be brought to tax, has escaped assessment. 12. It is relevant to note that the U.P. Trade Tax Act,1948 also utilises the phrase 'reason to believe' in Section 21 of the Act dealing with 'Assessment of tax on the turnover not assessed during the year', extracted below: '21. Assessment of tax on the turnover not assessed during the year - (1) If the assessing authority has reason to believe that the whole or any part of the turnover of a dealer, from any assessment year or part thereof, has escaped assessment to tax or has been under assessed or has been assessed to tax at a rate lower than that at which it is assessable under htis Act, or any deductions or exemptions have been wrongly allowed in respect thereof, the assessing authority may, after issuing notice to the dealer and making such inquiry as it may consider necessary assess or reasses the dealer or tax according to law' 13. Thus the reliance of the petitioner on this judgment is of no assistance to it. For the aforesaid reasons, the plea regarding lack of jurisdiction is rejected. 14. Now coming to the merits of the matter, the peti....
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....denied concessional rate of tax on the following main grounds: (i) that the goods in respect of which concessional rate has been claimed do not find place in the Eighth Schedule to the Act, which according to the Officer deals only with capital goods; (ii) that FGRP does not constitute capital goods, or parts of machinery sold for replacement during maintenance and repairs; (iii) that the decisions relied upon by the assessee deal with section 3(3) and not section 3(5) which is relevant for the purposes of the present case; (iv) that the sales transactions have been effected with the full knowledge of the petitioner that the goods sold are not entitled to concessional levy of tax. 20. The petitioners' submission that action, if any, for allegedly misusing Form XVII declaration would have to be initiated only as against the purchasing dealer was also rejected on the ground that the Assessing Officer cannot be expected to investigate and confirm whether the goods have been used for the stated purpose or not. A distinction was sought to be made by the Officer between the provisions of Section 3(3) and 3(5), pointing out that the provisions of section 3(3) granted concessional....