Hon'ble Mahesh Chandra Tripathi,J.
(Delivered by Hon'ble Ashok Bhushan,J) We have heard Sri Naveen Chandra Gupta, learned counsel for the petitioner and Shri C.B. Tripathi, learned Special Counsel for the State.
Counter affidavit and Rejoinder affidavits having been exchanged between the parties, and with the consent of the learned counsel for the parties, the writ petition is being finally decided.
By this writ petition, the petitioner has prayed for quashing the order dated 25/3/2008, passed by the Additional Commissioner, Commercial Tax, Noida, Zone, Noida and the consequential reassessment proceedings initiated by the Deputy Commissioner (Assessment) 4, Commercial Tax, Noida, vide his notice dated 26/3/2008, for the Assessment Year 2001-02.
Brief facts which emerge from the pleadings of the parties are: The petitioner is a Civil Works Contractor. Under Section 7-D of the U.P. Trade Tax Act, 1948 (hereinafter called the "Act, 1948") the State Government has issued a compounding scheme for civil works contractor vide its letter dated 23/7/1996. In the said scheme it was provided that the Civil Works Contractors who opt for admission to the benefit of the scheme shall be admitted the benefit of the aforesaid compounding scheme. On 10/8/2000, the State Government issued fresh directions under Section 7-D of the Act, 1948 in respect of the composition money to be accepted by the Assessing Authorities on civil works contracts. One of the change which was brought by the compounding scheme dated 10/8/2000 was that in a case a contractor uses 5% more raw materials from outside the State of U.P., the contract would fall outside the compounding scheme. A circular dated 24/8/2000 was issued by the Commissioner of Trade Tax providing that the compounding scheme for Annual Year 2000-01 would not apply to such contracts where tender had been submitted up to 31/3/2000, though the contract may have been awarded later. It provided that the new scheme shall apply only to the cases where the tenders have been filed by the contractor during the Assessment Year 2000-01. In the Assessment year 2001-02, petitioner had executed 21 civil work contracts and the petitioner applied to the Assessing Authority to be assessed in accordance with the compounding scheme under Section 7-D of the Act, 1948. The Assessing Authority examined the records of all the contracts in 21 cases. After examination of the records, the assessing authority held that out of the above 21 contracts, 9 contracts were such in which the petitioner had purchased more than 5% value of the raw materials from outside the State of U.P. and held that the compounding scheme could not be applied in respect of those 9 contracts. With regard to the remaining 12 contracts the Assessing Authority held that the contract had been executed before introduction of the compounding scheme 2000-01, hence the petitioner was eligible for the benefit of the compounding scheme as prevalent in the Assessment Year 1996-97. The Tax liability of the petitioner was determined accordingly. The order dated 28/2/2004 has been filed as Anxexure-5 to the writ petition.
On 20/3/2008, the Additional Commissioner, Commercial Tax, Noida Zone, Noida issued a notice to the petitioner under the proviso to Section 21 (2) of the Act, 1948 asking him to appear before him on 24/3/2008. The Additional Commissioner vide order dated 25/3/2008, authorized the Deputy Commissioner for initiating reassessment proceedings against the petitioners for the Assessment Year 2001-02 under Section 21(2) of the Act, 1948. A notice dated 26/3/2008 was issued by the Deputy Commissioner fixing 29/3/2008 for reassessment proceedings. This writ petition has been filed for quashing the order dated 25/3/2008, passed by the Additional Commissioner, Commercial Tax, Noida Zone, Noida and the consequential reassessment proceedings initiated by the Deputy Commissioner (Assessment) 4, Commercial Tax, Noida, vide his notice dated 26/3/2008, for the Assessment Year 2001-02. This Court on 09/5/2008 passed following interim order:
"In the meantime, reassessment proceedings for the assessment year 2001-02 (U.P.) initiated by notice dated 26.3.2008 (Annexure-8 to this writ petition) will remain stayed."
Learned counsel for the petitioner challenging the notice of reassessment dated 26.3.2008 made following submissions:
(1) The petitioner having been extended the benefit of compounding scheme under Section 7-D of the Act, 1948, it is not open for the respondents to initiate reassessment proceedings under Section 21(2) of the Act, 1948. He submits that Section 7-D of the Act, 1948 overrides other provisions of the Act, 1948 and when the tax has been assessed under the compounding scheme, reassessment proceedings cannot be undertaken.
(2) That while accepting the application of the petitioner for compounding for the Assessment Year 2001-02, the Assessing Authority has scrutinized all the contracts and has specifically applied his mind towards the applicability of the new compounding scheme and the condition of limit of 5% for importing the raw materials purchased from outside the State of U.P. He submits that the tax liability has been computed under the compounding scheme and no new materials or documents have been referred to in the permission granted by the Additional Commissioner for initiating reassessment proceedings, hence the condition precedent for initiating reassessment proceedings were not satisfied. It is submitted that there was no material to form an opinion that the turnover of a dealer has escaped assessment, hence the proceedings initiated are without jurisdiction.
Refuting the submission of learned counsel for the petitioner, the learned counsel for the State submits that the Commissioner of Commercial Tax has clarified vide circular dated 09/2/2007 that the benefit of the compounding scheme cannot be provided after 31/3/2000. The proceedings initiated under Section 21 (2) of the Act, 1948 is wholly legal, just and proper and the notice for initiation contains valid reasons, and even if there is a change of opinion, proceedings can be initiated under Section 21 (2) of the Act, 1948.
Learned counsel for the parties have placed reliance on various judgments of this Court as well as of the Apex Court, which shall be referred to while considering their submissions.
The State Government, in exercise of power under Section 7-D of the Act, 1948 has issued a compounding scheme for Civil Works Contractor.
Section 7-D of the Act, 1948 is quoted below:
"7-D Composition of tax liability.- Notwithstanding anything contained in this Act, but subject to directions of the State Government, the assessing authority may agree to accept a composition money either in lump sum or at an agreed rate on his turnover in lieu of tax that may be payable by a dealer in respect of such goods or class of goods and for such period as may be agreed upon:
Provided that any change in the rate of tax which may come into force after the date of such agreement shall have the effect of making a proportionate change in the lump sum or the rate agreed upon in relation to that part of the period of assessment during which the changed rate remains in force."
Under Section 7-D of the Act, 1948 the Compounding Scheme was issued on 23/7/1996 for the Assessment Year 1996-97 up to 1999-2000. Copy of the Compounding Scheme has been filed as Annexure-1 to the writ petition.
The compounding scheme indicates that option has been given to a dealer which is covered by the scheme to opt for a payment of lumpsum in lieu of the amount of tax. The payment by this alternate method of taxation is a hastle free and simple method of assessment.The petitioner had submitted an application under the compounding scheme for the Assessment Year 2001-02. The Assessing Authority examined the details of 21 contracts which were executed by the petitioner during the Assessment Year 2001-02. The Assessing Authority was aware of the compounding scheme which was prevalent till a new compounding scheme was issued on 10/8/2000. The Assessing Authority also noted the fact that under the new compounding scheme, condition of import of raw material beyond 5% disentitles the benefit of the compounding scheme. The 12 contracts were held by the Assessing Officer to be covered by the old scheme which was prevalent prior to 2000-01. With regard to the contracts on which the condition of import of material not more than 5% was applicable were also examined and it was held that the material imported by the petitioner in those contracts were not beyond 5% ceiling.
Learned counsel for the petitioner firstly submitted that the provisions of Section 21(2) of the Act, 1948 are not applicable with regard to any order passed accepting the compounding scheme under Section 7-D of the Act, 1948. Secondly, the condition precedent for exercising the power under Section 21-D of the Act, wherein there was no sufficient material to form any objective opinion for initiating any reassessment proceedings.
We take up the second submission first.
The law with regard to initiation of the reassessment proceedings is well settled.
Sections 21 (1) and (2) of the Act, 1948 are as follows:
"21. Assessment of tax on the turnover not assessed ruing 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, had 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 this Act, or any deductions or exemptions has 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 re-assess the dealer to tax according to law]:
Provided that the tax shall be discharged at the rate at which it would have been charged had the turnover not escaped assessment, or full assessment, as the case may be.
[(2) Except as otherwise provided in this section, no order of assessment or re-assessment under any provision of this Act for any assessment year shall be made after the expiration of [three years from the end of such year or March 31,1996, whichever is later]:
[Provided that if the [Commissioner] [on his own, or on the basis of reasons recorded by the assessing authority, is satisfied], that it is just and expedient so to do authorises the Assessing Authority in that behalf, such assessment or re-assessment may be made after the expiration of the period aforesaid but not after the expiration of eight years from the end of such year notwithstanding that such assessment or re-assessment may involve a change of opinion]:
[Provided further that the assessment or re-assessment for the assessment year 1987-88 may be made by March 31, 1993].
[Provided also that if the eligibility certificate granted Section 4-A has been amended or cancelled by the Commissioner under sub-section (3) of Section 4-A, the order of assessment or re-assessment may be made within one year from the date of receipt by the assessing authority of the copy of the order amending or cancelling the aforesaid certificate or by March 31, 1995, whichever is later:
Provided also that the assessment or re-assessment for the assessment year 1989-90 may be made by March 31, 1995]."
The expression "reason to believe" used in Section 21(1) of the Act, 1948 has also been used in Income Tax Act, 1922.
The Apex Court in S.Narayanappa & Ors Vs. Commissioner of Income Tax, Bangalore, (1967) 63 ITR 209, in context of the Income Tax Act, 1922 laid down following in paragraph 4 which is to the following effect:
"The expression 'reason to believe' in Section 34 does not mean a purely subjective satisfaction on the part of the Income-tax Officer. The belief must be held in good faith; it cannot be merely a pretence. It is open to that court to examine whether the reasons for the belief have a rational connection or a relevant bearing to the formation of the belief and are not extraneous or irrelevant to the purpose of the section. To this limited extent, the action of the Income-tax Officer in starting proceeding under Section 34 of the Act is open to challenge in a court of law."
A Division Bench of this Court in Kalpana Kala Kendra, Kanpur Vs. Sales Tax Officer, Circle 20, Kanpur 1989 U.P.T.C 597, laid down following in paragraphs 5,12,13,14,16 and 17:
"5. Now, the belief of the assessing authority cannot be purely subjective and it must be held upon relevant material, however meagre. The reason for belief must have a rational connection or live link between the material coming in possession of the assessing authority and the escapement of the turnover of the assessee from assessment in a particular year, or a part of the year. In short if, there are in fact, some reasonable grounds for the assessing officer to believe and form an opinion objectively that turnover has escaped assessment, the assessing authority would be well within its jurisdiction to take action under Section 21 of the Act.
12. Section 21 of the Act is based upon the theory that the taxes must be collected by the statutory machinery. The escapement from assessment whether it results on account of a concealment practised or fraud played by the assessee or as a result of negligence or ignorance of the assessing authority, in our opinion, is of no consequence, provided the action to reopen the assessment is otherwise justified and the assessing officer is not acting arbitrarily or in a capracious manner. The escapement of assessment contemplated under that section may be due to various reasons. The term 'turnover has escaped assessment of tax' which includes under assessment, may as well be result of lack of care on the part of the assessing officer or by reason of his inadvertance on his part. Section 21 does not prohibit obtaining of information from investigation of material on the record of the original assessment. The scope of that section is not circumscribed by a rider like the one that exists in Section 147 (a) of the Income Tax Act, 1961, namely, the Income Tax Officer has reason to believe that by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment for that year, income chargeable to tax has escaped assessment for that year. The escapement envisaged by Section 21 of the Act for the purposes of re-assessment need not necessarily spring from a source, extraneous to the original record. However, a second thought or a mere change of opinion, by the assessing authority on the same set of facts and material on record would not clothe the assessing authority with a valid jurisdiction.
13. The section with which we are concerned is in close proximity and is in parimateria with Section 147 (b) of the Income Tax Act, where the action for re-assessment is contemplated notwithstanding that there was no omission or failure on the part of the assessee as aforesaid. The mere filing of a document either alongwith the return or otherwise, without anything more does not ipso facto take away the jurisdiction of the assessing authority to take action under Section 21 of the Act.
14. In Commissioner of Income Tax, Gujarat v. A Raman and Co., (1968) 67 ITR 11, the Supreme Court while dealing with a matter under Section 147 (b) of the Income Tax Act, 1961 pointed as under :
"Jurisdiction of the Income-tax Officer to reassess income arises if he has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment. That information must, it is true, have come into the possession of the Income Tax Officer after the previous assessment, but even if the information be such that it could have been obtained during the previous assessment from an investigation of the material on record, or the facts disclosed thereby, or from other enquiry or research into facts or law, but was not in fact obtained, the jurisdiction of the Income-tax Officer is not affected."
Although the above decision was given with reference to Section 147 (b) of the Income Tax Act, but so far the issue with which we are concerned, the said Section, as already noted, is in pari materia with Section 21 of the Act. In finding out the meaning of the expression "escaped assessment" or "has been under assessed" envisaged by Section 21 of the Act, we see no reason why the said expressions should bear a more limited meaning than that it bears under Section 147 (b) of the Income Tax Act. The object of the two sections under the two statutes is to gather the revenue which has improperly escaped and both the Acts deals with taxing statues.
16.We were also referred to another decision of this Court in Commissioner of Sales Tax, U.P., Lucknow, v. M/s Panna Lal Gupta, 1987 U.P.TC 441. That case is again distinguishable. All that had been held there was that re-assessment of same turnover already considered in the original assessment without any fresh material is not justified under Section 21 of the Act.
17. We are not impressed by the argument that the instant case is a case of change of opinion. The change of opinion necessarily postulates that the assessing authority had an occasion to consider the material earlier, and on the same set of facts another opinion was sought to be formed. The question of change of opinion cannot arise where there has been no previous proceeding of assessment in respect of a turnover in dispute. As pointed out by the Calcutta High Court in Income Tax Officer v. Mahadev Lal Tulayan, (1978) 111 ITR 25, a change of opinion by the Assessing Officer contemplated, formation of two different opinions or to make two different inferences at two stages on the same set of primery facts. The distinction between an inadvertent mistake or omission and change of opinion was pointed out by one of us after reviewing a large number of decided cases, both by this Court and by the Supreme Court, in Commissioner of Sales Tax, U.P. v. Madhu Chemical Works, Bareilly, 1988 UPTC 230. It was held that in a case where a particular point has been considered on merits, and a view is taken, it would not be a case of inadvertent mistake or omission, if it is found that the view taken earlier was wrong. It would be a case of change of opinion, but if it is not so, then it would be a case of non-application of mind and an action would be justified under Section 21 of the Act."
From the proposition as laid down in the above-noted case, the Court can examine whether the reasons for the belief have a rational connection or a relevant bearing to the formation of the "belief." Mere change of opinion on same material cannot cloth the Assessing Officer to proceed with the reassessment proceedings. In this context a Division Bench of this Court in M/s Kothari Contract Interiors, New Delhi Vs. Trade Tax Officer, Modinagar, Ghaziabad, 2006 U.PT.C 74, relied on by the learned counsel for the petitioner is relevant to be noted which fully supports the submission raised by the learned counsel for the petitioner.
In M/s Kothari's case (supra) the petitioner was a Contractor who moved an application under Section 7-D of the Act, 1948 for lump sum payment in lieu of Tax. By order dated 07/2/1994, the application of the petitioner was accepted. Subsequently a notice under Section 22 of the Act,1948 was issued on 06/2/1997 cancelling the earlier order dated 07/2/1994. The said order was challenged in this Court in Writ Petition No.338 of 1997 which was ultimately set-aside by the High Court. The Department thereafter issued a notice dated 04/11/1999 under Section 21(2) of the Act, 1948 for reassessment which was challenged by the petitioner in this Court. The Division Bench of this Court in the said case held that it was not the case of the department that the petitioner did not truly and correctly disclosed the nature of the contract work taken by him in the relevant year. The Deputy Commissioner (Executive), Trade Tax examined the contract awarded to the petitioner and accepted the application for compounding. In the said circumstances, the proceedings initiated under Section 21 (2) of the Act, 1948 were held to be without jurisdiction. Following was laid down in paragraphs 14,15,16 and 17 which are quoted below:
"14. It is not in dispute that the order dated 7th February, 1994, passed by the Deputy Commissioner (Executive), Trade Tax accepting the payment of tax at the rate of one per cent on the amount received during 1990-91 still subsists and unsuccessful attempt was made to cancel the order dated 7th February, 1994. The question which arises whether in such circumstances the Trade Tax Officer could issue the impugned notice dated 4th November, 1999 under Section 21 (2) of the Act. Section 21 of the Act deals with the assessment of tax on the turnover not assessed during the year. In other words it talks about the reassessment of the turnover which has escaped the assessment. The Assessing Authority has been empowered to issue notice under Section 21 of the Act, if he has reason to believe that whole or any part of the turnover of the dealer 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 the Act or any deduction or exemptions have been wrongly allowed in respect thereof. Learned Standing Counsel submitted that it is a case of escaped assessment of the turnover of the petitioner as the petitioner carried on the work of interior decoration, which was not covered by the scheme issued under Section 7-D of the Act and in any view of the matter the turnover of the petitioner has been under assessed by extending the umbrella of Section 7-D of the Act. The said argument of the learned Standing Counsel is misconceived. Power vested with any authority under various provisions of law can be exercised only for the stated purpose and for no other purpose. All acts by authorities must be in conformity with or according to the intent of the Act and not for any other collateral purpose. It is not in dispute that besides the contracts with Modi Pon Fibre Company, the petitioner has not undertaken any other contract work.
15. It is not the case of the department that the petitioner did not truly and correctly disclosed the nature of the contract work undertaken by him. It has come on record that the Deputy Commissioner (Executive), Trade Tax examined the contract awarded to the petitioner. After examination of the two contracts he accepted the application for compounding with his wide open eyes. There is not even a slightest whisper either in the impugned notice or in the counter-affidavit that the petitioner is guilty of concealing any material fact or has not truly and correctly disclosed the contract work undertaken by him. There is no allegation that the petitioner by playing fraud obtained the order dated 7th February, 1994 by which the application under Section 7-D of the petitioner was accepted. This Court in the case of M/s. Ram Prakash Vijay Kumar Pvt. Ltd., Saharanpur v. Deputy Commissioner (Executive), 1996 U.P.T.C. 998 has held that Deputy Commissioner (Executive) cannot review its order unless the dealer has misrepresented any fact or suppressed any information. The legal effect of the order dated 7th February, 1994 is that the petitioner is liable to pay lump sum i.e. one per cent of the sum received by him during the assessment year in question to which the department also agreed. The said agreement is valid and binding on both the parties. In the absence of any material to show that the order dated 7th February, 1994 was tainted on account of fraud or concealment of material fact, it is not open to the department to initiate reassessment proceedings under Section 21 of the Act as it would amount the ignoring of the order dated 7th February, 1994. Where the application under Section 7-D is allowed there is no assessment as it is commonly understood in Taxing Statutes. The question of escapement of turnover would hardly arise in such cases. The demand, as held by this Court in the case of Sri Durga Bricks Field supra) "is not relatable to the actual turnover". Section 7-D opens with non-obstante clause. It gives an overriding effect over the provision in the same or the other Act mentioned in the obstante clause. It is equivalent to saying that inspite of the provisions or the Act mentioned in the non-obstante clause, the provision following it will have its full operation or the provisions embraced in the non-obstante clause will not be impediment in the operation of the enactment or the provision in which the non-obstante clause occurs.
16. Thus, the argument of the learned Standing Counsel that the scheme was subject to such direction as the State Government may from time to time issue in that behalf, and the petitioner's work contract being beyond the scope of the scheme, the order passed by the Deputy Commissioner (Executive) accepting the compounding application is liable to be ignored has no substance. Moreover, it could not be disputed by him that the Deputy Commissioner (Executive) is a higher officer than the Trade Tax Officer who issued the impugned notice and the order dated 7th February, 1994 has been passed by the Deputy Commissioner (Executive) in exercise of powers vested in him under Section 7-D of the Act. In any administration it is essential for a junior officer to obey and follow and give due weight to an order which has been validly passed by an officer who is higher in rank, otherwise there would be chaos in the administration. It is not open to an officer who is junior in rank to give a complete go bye to such an order passed by his superior. The order passed by the superior unless varied, modified or vacated, is an order binding on a junior officer and he has to obey it. The Apex Court in the case of Authorised Officer (Land Reforms) v. M.M. Krishnamurty Chatty, 1998 (9) S.C.C. 138, has held that it is well settled that even order which may not be strictly legal become final and are binding between the parties if they are not challenged before the superior Court. This may instantly cause some prejudice to the Revenue but the remedy is to take appropriate steps within the frame work of the State. It may be recalled here that an attempt was made by the Deputy Commissioner (Executive) to rectify the order dated 7th February, 1994 by order dated 6th February, 1997. The order dated 6th February, 1997 has been quashed by this Court. The relevant portion of the judgment reads as follows:
"The impugned order shows that there was no allegation of misrepresentation or suppression of fact by the petitioner while making the application under Section 7-D of the Act. It appears that the said order was passed on change of opinion by the Assessing Authority. In that view of the matter we do not think that the order dated 6th February, 1997 can be sustained. We accordingly quash the order dated 6th February, 1997.
In the result, the writ petition succeeds and is allowed. There shall be no order to costs."
17. The scheme of the Trade Tax Act shows that ample power has been conferred on the authorities to take appropriate action in appropriate cases when the order is prejudicial to the interest of Revenue. Besides power of the rectification under Section 22 of the Act the power of revision under Section 10-B of the Act, is there. The power in appropriate could be exercised under Section 10-B of the Act by way of revision by the Commissioner of Trade Tax. The Commissioner of Trade Tax under Section 10-B has been empowered to call for and examine the record relating to any dealer passed by any officer subordinate to him for the purpose of satisfying himself as to the legality or propriety of such order. The power being there under Section 10-B of the Act, we find no force in the argument of the learned Standing Counsel that in such circumstances the only remedy open to the department is to initiate reassessment proceedings under Section 21 of the Act."
The order of the Additional Commissioner, Commercial Tax, Noida, Zone, Noida dated 25/3/2008, by which the permission has been granted does not indicate any reason to come to a conclusion on objective satisfaction that a case has been made out for initiating reassessment proceedings. The said order indicates that the tax has escaped on the goods in which there was import of more than 5% of raw material. The Deputy Commissioner in his order dated 28/2/2004 has noted the fact that under the new compounding scheme enforced w.e.f. 2000-01 in cases where more than 5% of raw material have been imported, the scheme is not applicable. The Deputy Commissioner in the said order has held that the 12 contracts were covered under the old scheme and for which contracts 5% ceiling of importing the material has been put, the import of raw material was less than 5%. Thus, we find that there is no basis for forming any belief that tax has escaped assessment. The words "reason to belief" as used in Section 21 (1) of the Act, 1948 has not to be based on surmises and conjectures, rather it is to be based on objective satisfaction. There has to be nexus between the reason to belief and the materials on the record. It is true that if there are materials on the record, the Court shall not enter into the sufficiency of the materials for forming a belief, but if there is no material which is referred to for forming a belief the initiation of reassessment proceedings is arbitrary and falls beyond the Sections 21 (1) and (2) of the Act, 1948.
The Division Bench judgment in M/s Kothari Contract Interiors (supra) fully supports the submission raised by the learned counsel for the petitioner and we are satisfied that the present is not a case for initiating reassessment proceedings.
Learned counsel for the petitioner has further relied on a Division Bench judgment of this Court in M/s Systematic Conscom Limited Vs. State of U.P. & Ors, 2009 NTN (39) 245. In the said case, the issue before the Division Bench was whether the payment of State Development Tax under Section 3-H of the Act, 1948 is applicable on dealers having annual turnover of more than Rs. 50 lakh who have opted for composition under Section 7-D of the Act, 1948. The Division Bench in the said case held that Composition Scheme can be nullified only under composition scheme and it cannot be revised otherwise.
The aforesaid Division Bench judgment of this Court was also affirmed by the Apex Court vide its judgment and order dated 26/2/2013 in Civil Appeal No.1843/2013, State of U.P. & Ors Vs. M/s Systematic Conscom Ltd. In paragraph 24 of the judgment the Apex Court had left the question open as to whether the Assessing Authorities can demand the State Development Tax from those dealers who had already opted for the composition charges under the composition scheme. It is useful to quote paragraph 24 of the said judgment which is as under:
"24. Now, we leave it open to the assessing authorities, whether to demand the State Development Tax from those dealers who had already opted for the composition charges under the composition scheme by way of issuing appropriate demand notices in accordance with law. If and when such demand notices are issued by the assessing authority/authorities, the assessees are at liberty to question the same before the appropriate forum."
In view of our observations as above, that there was no material to form a belief that that tax has escaped assessment and the proceedings initiated were not justified, we are of the view that it is not necessary for us to consider the first submission raised by the learned counsel for the petitioner that Section 21 of the Act, 1948 is not applicable on composition orders passed under Section 7-D of the Act, 1948. We leave the question open.
In view of the foregoing discussions, we allow the writ petition.
Order dated 25/3/2008, passed by the Additional Commissioner, Commercial Tax, Noida, Zone, Noida and the consequential reassessment proceedings initiated by the Deputy Commissioner (Assessment) 4, Commercial Tax, Noida, vide his notice dated 26/3/2008 for Assessment Year 2001-02 are quashed.
Parties shall bear their own costs.
Order Date :- 19/5/2014 SB