Hon'ble Shashi Kant ,J.
(Delivered by Hon'ble Rajes Kumar, J.) By means of the present petition, the petitioner is seeking following reliefs:
(i) Issue a writ, order or direction in the nature of certiorari and to quash the order dated 28.9.2004 passed by the Additional Commissioner, Grade 1, Trade tax, Agra Range, Agra (Annexure-8) to the writ petition and consequential assessment and demand of tax etc.
(ii) Issue a writ, order or direction in the nature of certiorari and to quash part of the order passed by the Joint Commissioner (Appeals), Trade Tax, Agra dated 31.5.2005 (Annexure-10) to the writ petition. The order may be quashed to the extent the Joint Commissioner (Appeals), Trade Tax, Agra has remanded the matter to the assessing authority to pass a fresh reassessment order.
(iii) Award cost of this petition to the petitioner.
(iv) Pass such order and further writ, order or direction in favour of the petitioner as this Hon'ble court may deem fit and proper in the circumstances of the case.
The brief facts, giving rise to the present petition, are that the petitioner is a Company, duly incorporated under the Indian Companies Act, 1956, engaged in the business of establishing and running hotels. For the assessment year 1998-99, Assistant Commissioner (Assessment), Trade Tax, Agra, passed the assessment order on 27th March, 2001. The books of accounts was rejected and the best judgment assessment was made, after disbelieving the sales and purchases of food stuffs and beverages etc. In the assessment order, it is noted that a sum of Rs.21,47,694/- was deducted as the tax on the payments made to the contractors on work contracts awarded to them. It is also noted that goods for a sum of Rs.26,16,90,877/- have been imported against 1198 declaration forms for which 11 Form-C have been issued.
Against the assessment order, the petitioner filed the appeal, which has been allowed in part against which the Commissioner, Trade Tax, filed the appeal before the Tribunal, which has been rejected on 22nd February, 2005. We are not concerned with such appellate orders in the present writ petition.
On 25th February, 2004, the Additional Commissioner, Trade Tax, respondent no.3, issued a notice under Section 21(2) for granting of approval to initiate proceeding beyond the normal period of limitation, for re-assessment, for the assessment year 1998-99.
In the notice, it has been stated that during the assessment year 1998-99, the petitioner deducted tax at source for a sum of Rs.21,47,694/- on the payments made to certain contractors. It has also been stated that the petitioner has imported building material, electrical goods, furnitures and other fixed assets for Rs.26,16,90,877/- from outside the State of U.P., but the details of their uses have not been given in the assessment order and this aspect has not been examined by the assessing authority in the assessment order. It has further been observed that it came to the notice that the goods have been directly imported by the contractor against declaration form of the petitioner, which shows that the imported goods have been supplied to the contractor. In view of the decisions of the Apex Court in the case of N.M. Goel & Company v. Sales Tax Officer, Rajnandgaon and another, reported in (1987) 72 STC 368 and in the case of Rashtriya Ispat Nigam Ltd. v. State of Andhra Pradesh, reported in 109 STC 435 such supply comes within the purview of sale. There is a 'reason to believe' that some turnover has escaped the assessment. The date was fixed on 15th March, 2004. On the said date, the petitioner put in appearance and after partial hearing, it was adjourned for 29th March, 2004. It has been further adjourned on the application of the petitioner to 26th April, 2004.
When the petitioner could not appear on 26th April, 2004, another notice dated 11th August, 2004 has been issued asking the petitioner to appear alongwith the books of account. Thereafter, an order has been passed by the Additional Commissioner on 28th September, 2004, granting approval to initiate the proceeding beyond the period of four years, invoking the power under proviso to Section 21(2) of the U.P. Trade Tax Act, which is impugned in the present petition.
Thereafter, a notice dated 16.10.2004, has been issued by the assessing authority asking the petitioner to appear on 29th October, 2004, in the proceeding under Section 21(2). A show cause notice, dated 10th January, 2005, has also been issued, stating therein that the petitioner has imported building materials etc. against the 1098 declaration forms for a sum of Rs.26,16,90,877/- for which 11 Form-C have also been issued. It has been further stated that under the agreement with the contractor, the goods have been imported against the declaration form and the same have been supplied to the contractor and on such goods, there is a liability of tax.
The petitioner filed the reply on 9th March, 2005, which is Annexure-6 to the writ petition. In the reply, the petitioner has stated as follows:
"At the outset, it is respectfully submitted that the said notice is without jurisdiction being barred by limitation and none of ingredients of Section 21 are fulfilled in the present cases. This is also clear from reading of your notice, as this is not a case of escaped turnover or under assessment or assessment at a lower rate of tax, moreover order under Section 21(2) has not been served till today. However, without prejudice to the maintainability of the present proceedings, we are giving our reply on the merit purely in the alternative.
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The assessing authority passed the assessment order, under Section 21 on 24th March, 2005 and levied tax on the turnover of Rs.24,57,96,048/-, treating the supply of such imported goods to the contractor and levied tax at Rs.2,41,71,041/-. Against the said order, the petitioner filed an appeal before the Joint Commissioner (Appeal), Trade Tax, Agra. The appeal has been allowed vide order dated 31st May, 2005 and the matter has been remanded back to the Assessing Officer for fresh adjudication. However, during the pendency of the assessment proceeding before the assessing authority, pursuant to the appellate order, the petitioner filed the writ petition in July, 2005, which has been entertained and the proceeding has been stayed, leaving the question of laches and acquiescence open.
Heard Sri Bharat Ji Agrawal, learned Senior Advocate, appearing on behalf of the petitioner and Sri C.B. Tripathi, learned Special Counsel, appearing on behalf of the State of U.P.
Learned counsel for the petitioner made following submissions:
(i) It is mandatory on the part of the Additional Commissioner to record reason for invoking the proviso to Section 21(2) to reopen the assessment proceeding beyond the normal period of limitation, while in the present case no reason has been recorded, therefore, the order is bad in law and is liable to be set aside. Further, the order passed under Section 21 has not been served upon the petitioner, however, when the petitioner came to know about the said order, copy of the order has been obtained and the same is being challenged. Reliance is being placed on the decision of Court, in the case of Maniktala Chemicals v. State of U.P. and others, reported in 2006 UPTC 1128 (Paragraph 15), M/s. S.K. Traders, Modi Nagar, Ghaziabad v. Additional Commissioner, Grade-I, Trade Tax, Zone, Ghaziabad and another, reported in 2008, UPTC 392 (Paragraph 49) and M/s. Vikrant Tyres Ltd. v. State of U.P. and others, reported in 2005 UPTC 501.
(ii) Further submission is that the the order, which has not been served, cannot be given effect. Reliance is being placed on the decision of the Apex Court in the case of Greater Mohali Area Development Authority v. Manju Jain and others, reported in (2010) 9 SCC 157.
(iii) In appeal, the petitioner challenged the order, passed under Section 21(2) by the Additional Commissioner, but the appellate authority has refused to entertain such plea on the ground that the appeal against the said order is not maintainable and the said order cannot be challenged in the appeal.
(iii) The decisions of the Apex Court in the case of N.M. Goel & Company v. Sales Tax Officer, Rajnandgaon and another (supra) and in the case of Rashtriya Ispat Nigam Ltd. v. State of Andhra Pradesh (supra) are not applicable in the present case.
Sri C.B. Tripathi, learned Special Counsel, appearing on behalf of the State of U.P., submitted that the reason for granting approval are mentioned in the notice itself. The said notice was duly served upon the petitioner. The petitioner participated in the proceeding before the Additional Commissioner. Thus, the reason was fully known to the petitioner. Therefore, if the order dated 28th September, 2004 is read alongwith the notice, the reason on which the approval has been granted is apparent and was known to the petitioner. He further submitted that there is no provision for recording reason in the order, passed under Section 21(2).
It is further submitted that there is no provision for serving copy of the order, passed under Section 21(2). In the notice dated 16th October, 2004, which is Annexure-4 to the writ petition, the petitioner has been asked to appear in the proceeding, under Section 21(2), therefore, at that stage itself, it was known to the petitioner that the order, under Section 21(2), has been passed by the Additional Commissioner. In pursuance thereof, the notice has been issued. It was open to the petitioner to obtain the certified copy of the order, in case if the petitioner intended to challenge the said order, but the petitioner has chosen not to challenge the said order at that stage. In the reply, dated 9th March, 2005 also, the order, under Section 21(2), has not been challenged.
The submission of learned counsel for the respondent is that the petitioner participated in the assessment proceeding and on the order being passed on 24th March, 2005, the appeal was filed, which has been allowed and the matter has been remanded back vide order dated 31st May, 2005 and, therefore, the petitioner cannot be allowed to challenge the order, under Section 21(2), passed by the Additional Commissioner, dated 28th September, 2004, after the lapse of almost eleven months and that too after submitting to appellate jurisdiction. Reliance is being placed on a decision of this Court in the case of Tata Chemicals Ltd. v. Assistant Commissioner (Assessment), reported in 2011 NTN ( Vol. 45) 158 (Paragraphs 24 & 25). He submitted that in the aforesaid decision, the Division Bench of this Court has considered the decisions cited by the learned counsel for the petitioner.
He next submitted that to initiate the proceeding, under Section 21, there must be material on the basis of which a belief is formed that there is escaped assessment and it is not necessary that there should be any concealment on the part of the assessee or that any fresh material should be discovered. On the basis of the materials available on record, proceeding, under Section 21 can be initiated. Reliance is being placed on the decision of the Apex Court in the case of Standard Refinery v. Sales Tax Commissioner, reported in 1963 (14) STC 529 and in the case of Commissioner Sales Tax v. Bhagwan Industries reported in 1973 AIR SC 370.
Further, he submitted that, it is not a case of change of opinion. No opinion has been formed in respect of the issue that the substantial building materials have been imported by the petitioner against the declaration form and their use have not been considered in the original assessment. Reliance is being placed on the decision of this Court in the case of M/s. Tristar Farms v. Addl. Commissioner Grade-I and another, reported in (2013) 12 NTN 12 (Writ Petition No. 476 of 2013) and in the case of Radico Khaitan Limited v. State of U.P. & others, reported in (2010) 35 VST 280 (All).
We have considered the rival submissions and perused the materials available on record as well as the relevant provisions.
Section 21 of the U.P. Trade Tax Act reads as follows:
Section 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 the dealer, for 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 this 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 reassess the dealer or tax according to law:
Provided that the tax shall be charged at the rate at which it would have been charged had the turnover not escaped assessment, or full assessment as the case may be.
Explanation I:
Nothing in this sub-section shall be deemed to prevent the assessing authority from making an assessment to the best of its judgment.
Explanation II:
For the purposes of this section and of section 22, "assessing authority" means the officer or authority who passed the earlier assessment order, if any, and includes the officer or authority having jurisdiction for the time being to assess the dealer.
Explanation III:
Notwithstanding the issuance of notice under this sub-section, where an order of assessment or re-assessment is in existence from before the issuance of such notice it shall continue to be effective as such, until varied by an order of assessment or re-assessment made under this section in pursuance of such notice.
(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 two years from the end of such year or March 31, 1998, 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 authorizes 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 six years from the end of such year or March 31, 2002, whichever is later 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 the eligibility certificate granted under 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.
It would also be appropriate to refer the notice dated 25th February, 2014 and the order passed under Section 21(2), which reads as under:
i=kad [email protected] fof/k &[email protected]/kkjk&21 ¼2½@03&[email protected],fM-dfe0 ¼xzsM&1½ O;[email protected] dk;kZy; ,Mh'kuy dfe'uj] ¼xzsM&1½ O;kikj dj vkxjk tksu] vkxjkA fnukad vkxjk] 25 Qjojh] 2004 loZJh ts0ih0 iSysl gksVy] Qrsgkckn jksM] vkxjkA o"kZ&1998&99 dkj.k crkvks uksfVl /kkjk &21 ¼2½ ds vUrxZr o"kZ 98&99 ds fy;s ikfjr fd;s x;s dj fu/kkZj.k vkns'k esa dj fu/kkZj.k vf/kdkjh us bl rF; ij fopkj ugha fd;k gS fd vkius :0 26]16]90]877-00 ewY; dk fcfYMax esVhfj;y] bySdVªhdy xqM~l] QuhZpj o vU; fQDLM ,lslV~l izkUr ds ckgj ls vk;kr fd;k Fkk ftlesa ls fcfYMax eSVhfj;y o mlls lEcfU/kr oLrqvksa dk iz;ksx dk dksbZ fooj.k dj fu/kkZj.k vkns'k esa ugh fn;k x;k gSA vkius Bsdsnkjksa :0 21]47]694-00 dh /kujkf'k Vh0Mh0,l0 ds :i esa dkVh gSA bl lEcU/k esa dksbZ foospu dj fu/kkZj.k vkns'k esa miyC/k ugh gSA ;g rF; Hkh izdk'k esa vk;k gS fd vkids vk;kr ?kks"k.kk i=ksa ij Bsdsnkjksa }kjk lh/ks Hkh eky eaxk;k x;k gS ftlls izFke n`"V;k ;g fu"d"kZ fudyrk gS fd vkius vk;kfrr eky dks lIykbZ Bsdsnkjksa dks dh gS tks ekuuh; loksZPp U;k;ky; }kjk loZJh ,u0,e0 xks;y ,.M da0 cuke fcdzhdj vf/kdkjh ¼72,l0Vh0lh0&368½ ,oa loZJh jk"Vªh; bLikr fuxe fy0 cuke vkU/kz izns'k ljdkj ¼109,l0Vh0lh0&435½ esa fn;s x;s fu.kZ;ksa ds vuqlkj izFke n`"V;k fcdzh dh Js.kh esa vkrh gS fdUrq dj fu/kkZj.k vf/kdkjh us bu rF;ksa ij fopkj gh ugha fd;k gSA vr% ;g ekuus dk dkj.k gS fd vkidh dqN fcdzh ij dj yxus ls jg x;k gSA vr% vki d`i;k fnukad 15-3-04 dks izkr% 11 cts t;iqj gkml] vkxjk fLFkr esjs dk;kZy; esa vfHkys[kksa lfgr mifLFkr gksdj fLFkfr Li"V djsaA /;ku jgs ;fn vki fu;r frfFk o le; ij mifLFkr ugha gq;s rks /kkjk 21 ¼2½ ds ijUrqd ds vUrxZ dk;Zokgh iw.kZ dj yh tk;sxhA g0 viBuh;
¼,0,y0 tk;loky½ ,Mh'kuy dfe'uj] ¼xzsM&1½] O;kikj dj vkxjk tksu] vkxjkA @fof/k &[email protected]/kkjk&21 ¼2½@2004&[email protected],fM-dfe0 ¼xzsM&1½ O;[email protected] dk;kZy; ,Mh'kuy dfe'uj] ¼xzsM&1½ O;kikj dj vkxjk tksu] vkxjkA fnukad vkxjk] 28 flrEcj] 2004 vkns'k loZJh ts0ih0 iSysl gksVy] vkxjk ds o"kZ 98&99 izkUrh; okn esa dj fu/kkZj.k vf/kdkjh }kjk vfHkfyf[kr dkj.kksa ds vk/kkj ij ,slk djuk U;k;ksfpr ,oa lehphu gS fd bl ekeys esa bl ckr ds gksrs gq;s Hkh fd ,slk dj fu/kkZj.k ;k iqu% dj fu/kkZj.k djus esa er ifjorZu vUrxZLr gks ldrk gS] dj fu/[email protected]% dj fu/kkZj.k dh vko';drk gSA vr% mRrj izns'k O;kikj dj vf/kfu;e dh /kkjk&21¼2½ ds ijUrqd ds vUrxZr fn;s x;s vf/kdkjksa dk iz;ksx djrs gq;s eSa ,Mh'kuy dfe'uj ¼xzsM&1½ O;kikj dj] vkxjk tksu] vkxjk mDr lanfHkZr okn ls fMIVh dfe'uj ¼d0fu0½&11] O;kikj dj] vkxjk dks dj fu/kkZj.k ;k iqu% dj fu/kkZj.k ds fy;s vf/kd`r djrk gwWA ¼,0,y0 tk;loky½ ,Mh'kuy dfe'uj] xzsM&1] O;kikj dj vkxjk tksu] vkxjkA^^ Proviso to Section 21 (2) does not provide for recording of reason, however, Division Bench of this Court, in the case of Maniktala Chemicals (supra) and in the case of S.K. Traders (supra), has held that before granting approval, under proviso to Section 21(2), opportunity should be given to the assessee. It also provides for recording of the reason.
In the case of Radico Khetan (supra), the Division Bench of this Court has held as follows:
"The Division Bench of this Court in the case of M/s. S. K. Traders , Modi Nagar, Ghaziabad Versus Additional Commissioner, Grade-I, Trade Tax , Zone Ghaziabad and another, reported in 2008 U.P. T.C.-392 and Manaktala Chemicals Pvt. Ltd. Vs. State of U.P. and others, reported in 2006 U.P.T.C. 1128 have held that before granting the approval under the proviso to Section 21 (2) of the Act the opportunity should be given to the assessee. We are of the view that under the proviso the Commissioner does not exercise the judicial power in strict sense. He is not suppose to adjudicate the issue. He has to satisfy on the basis of the reasons recorded by the assessing authority that it is just and expedient to authorise the assessing authority to make the assessment or re-assessment beyond the period of limitation prescribed under Section 21 (2) of the Act. Therefore, we are of the view that a detailed reasoning is not required to be given while granting the authorisation. What is required under the proviso is that there should be an application of mind to arrive at the satisfaction on the consideration of the reasons recorded and the submissions of the assessee. We have gone through the order passed by the Additional Commissioner, Grade-1, Trade Tax, Moradabad Zone, Moradabad under the proviso to Section 21 (2) of the Act. The order reveals that he has considered the reasons recorded by the assessing authority and also considered the reply and after being satisfied granted the approval. Therefore, the order cannot be said to be mechanical and without application of mind. Learned counsel for the petitioner has rightly withdrew his submission challenging the order under Section 21 (2) of the Act passed by the Additional Commissioner, Grade-1, Trade Tax, Moradabad Zone, Moradabad."
In the case of Dhanwat Marketing v. State of U.P. & others, 2011 Tax Law Diary 41, the Division Bench of this Court held as follows:
"The approval granted by the Additional Commissioner, Kanpur is not as detailed as one might expect, however, he has approved the proposal sent by the Assessing Officer. It is not necessary on the part of the approving authority to give detailed reasons lest it may be said he had influenced the reassessment proceedings on merit."
In the case of Tata Chemicals Ltd. v. Assistant Commissioner (Assessment) (Supra), the Division Bench held as follows:
"24. Where the orders under the proviso to Section 21 (2) of the Act challenging period of limitation are based without disclosing any reasons, the same may be challenged on the ratio in Maniktala Chemicals Pvt. Ltd. and S.K. Trader's case. Where, however, petitioner is fully aware of the reasons, which are disclosed in notice under Section 21 and which is the basis on which limitation was extended under Section 21 (2), it is not open to the petitioner to contend after 10 years, that no reasons have been disclosed by the Addl. Commissioner in the order under Section 21 (2) of the Act.
25. The petitioners have neither pleaded nor taken any ground in the amendment application that any notice was required to be given and that such notice was not given to the petitioners before the Addl. Commissioner made the order under the proviso to Section 21 (2) of the Act dated 2.11.2009 extending the period of limitation. The facts of the case in Maniktala, R.K. Traders, M/s Swati Gramodyog Sewa Sansthan, and Yadav Traders are entirely different. In all those cases the order issued by the Addl. Commissioner under the proviso to Section 21 (2) was under challenge. In the present case the petitioners did not challenge the notice under Section 21 based upon the order under proviso to Section 21 (2) of the Act. It has challenged the orders under proviso to section 21 (2) after a period of 10 years. The facts and circumstances and the merits on which the department decided to reopen the assessment were not only in the knowledge of the petitioner but that the petitioner had also taken several grounds including the terms of the contract in challenging the notice. In these circumstances, can it be said that the order under the proviso to Section 21 (2) has to struck down as it does not contain any reason? The law does not insist on recording reasons, where the reasons are not only known, but have also been challenged in the writ petitions. The principles of law are required to be applied by appreciating the facts and circumstances of each case. In the present case the only ground urged to challenge notice under Section 21 of the Act is that there was detailed discussion in the assessment order and that since there was a stipulation in the contract for taking action against breach of contract, if surplus stores were not returned, the reduction of the surplus stores by the contractor and the entries by which price was deducted from his bills will not amount to sale. The Addl. Commissioner on the reasons disclosed in the assessment order decided to extend the period of limitation. The petitioner was fully aware of these reasons on which notice under Section 21 was given and had challenged the same in detail in the writ petition."
Proviso to Section 21(2) provides that the Commissioner, on his own or on the basis of the reason recorded by the assessing authority, is satisfied that it is just and expedient so to do authorizes the assessing authority in that behalf, such assessment or re-assessment may be made after the expiry of the period. Under the Proviso the Commissioner does not exercise the judicial power in strict sense. He is not supposed to adjudicate the issue. He has to satisfy on the basis of reasons recorded by the assessing authority that it is just and expedient to authorise the assessing authority to make the assessment or re-assessment beyond the period of limitation prescribed under Section 21(2) of the Act. What is required under the proviso for granting authorisation by the Commissioner is to satisfy himself on the basis of reason recorded by the assessing authority that whether it is a fit case for granting approval. There should be application of mind. If the reason is available on the record on which the satisfaction is recorded, that would suffice. It is not necessary that the same may be reflected in the order itself.
The opportunity is required to be provided for the reason that the reason on the basis of which the approval has been sought and the authority is intending to grant must be communicated to the assessee to get his version. If it is done, the object is achieved.
It is always open to the assessee to challenge the validity of the order passed under the Proviso to Section 21(2), notice under Section 21 and further proceeding in pursuance thereof on the ground that there is no material, or the material is irrelevant, etc. on the basis of which 'belief' of escaped assessment cannot be formed, or the proceeding has been initiated on account of change of opinion on the basis of principle of law laid down by the Apex Court and various High Courts in this regard.
We are of the view that the challenge to the order, under Section 21 (2), dated 28th September, 2004, is grossly barred by laches and is not bonafide. The notice issued by the Additional Commissioner has been served upon the petitioner. The petitioner participated in the proceeding before the Additional Commissioner. In the subsequent notice, dated 16th October, 2004, calling upon the petitioner to appear, it was clearly mentioned that the notice is under Section 21(2), therefore, the order passed by the Additional Commissioner was well within the knowledge of the petitioner. There is no provision, under the Act or Rules framed thereunder, to serve the order passed under Section 21(2), granting approval. Thus, petitioner could have obtained the certified copy of the order passed by the Additional Commissioner if intended to challenge the same. In the reply to the show cause notice issued by the assessing authority, the petitioner has not challenged the validity of the order of the Additional Commissioner and participated in the assessment proceeding. Against the assessment order, the petitioner filed the appeal. The appeal has been allowed and the matter has been remanded back, therefore, in the circumstances, the petitioner cannot be allowed to challenge the order, under Section 21, after lapse of 11 months. Our view finds support from decision of the Division Bench of this Court in the case of Tata Chemicals Ltd. (Supra), wherein it has been held as under:
27. In Standard Refinery Co. Vs. Sales Tax Commissioner, U.P., 1963 (14) STC 529 relying upon George Oakes (Private) Ltd. Vs. State of Madras, AIR 1962 SC 1352 it was held that language of Section 21 of the U.P. Sales Tax Act, 1948 is wide enough to cover any case in which even by mistake, whether by fact or law or by mere omission the assessing authority does not assess the whole or part of turn over in any particular year. It is not necessary that there should be any concealment on the part of assessee or that any fresh material should be discovered. The reason to believe under Section 21 was interpreted by the Supreme Court in Commissioner of Sales Tax, U.P. Vs. M/s Bhagwan Ind. (P) Ltd., AIR 1973 SC 370; it was held that the words 'reason to believe' in Section 21 convey that there must be some rational basis for the assessing authority to form the belief that the whole or any part of turn over of a dealer has, for any reason, escaped assessment to tax for some year. If there are, infact, some reasonable grounds for the assessing authority to form such belief, 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.
28. In Addl. Commissioner (Legal) & Anr. Vs. Assistant Commissioner, Trade Tax, 1999 UPTC 45 SC the scope of the powers under proviso to Section 21 (2) of the Act was under consideration. The Supreme Court held that one may go into the intention of the legislature in enacting such provision. The date of commencement of the proviso does not control its retrospective operation. Under the amended provision, the Commissioner of Sales Tax authorises assessing authority to make assessment or reassessment after the expiration of 8 years on the end of such year notwithstanding that such assessment or reassessment may involve a change of opinion (para 25).
29. Hon'ble Mr. Justice M. Katju (as he then was) and Hon'ble Mr. Justice Umeshwar Pandey in M/s Shyam Babu Vaishya & Anr. Vs. Asstt. Commissioner, Trade Tax, 2004 UPTC 210 refused permission to challenge the reopening of the assessment under Section 21 (2) on the ground that the writ petition was filed in September, 2003, seven months after the order was passed on 13th March, 2003. It was held that reopening of the assessment can be made on the basis of material already on record at the time of original assessment, if escapement of assessment to tax was due to concealment by the assessee or negligence and ignorance on the part of the Assessing Officer.
In the present case, the Additional Commissioner has issued the show cause notice stating therein the material and the reason on which the approval has been sought. Said notice has been duly served upon the petitioner. The petitioner participated in the proceeding. In this way, the petitioner was fully aware about the reason. Merely because in so many words reason mentioned in the notice has not been incorporated in the order, the order granting approval will not be rendered invalid, in view of the legal position stated above. More so, in the order under Section 21(2), it is clearly mentioned as " dj fu/kkZj.k vf/kdkjh }kjk vfHkfyf[kr dkj.kksa ds vk/kkj ij". We are of the view that this fulfills the requirement of the provsion.
In view of the facts stated above, we are of the view that the approval has been granted, on consideration of the reason recorded by the assessing authority, mentioned in the notice, after application of mind and as such we do not find any illegality.
We are further of the view that the reason, on which the approval has been granted, was relevant and sufficient to form the 'belief' that there was escaped assessment. It is not the case of the change of opinion inasmuch as the issue raised in the proceeding, under Section 21 has not been adjudicated in the original assessment. It is settled principle of law that sufficiency of the material cannot be examined in the writ jurisdiction. Learned counsel for the petitioner has also not made any submission in this regard.
So far as challenge to the appellate order of the Joint Commissioner, remanding back the matter to the assessing authority, is concerned, the same cannot be allowed to be challenged under the writ jurisdiction. It was open to the petitioner to file an appeal against the said order before the Tribunal. No prejudice is caused to the petitioner. The petitioner has full opportunity to represent its case on merit before the assessing authority.
In view of the discussions made above, we decline to interfere in the matter. In the result, the writ petition, being devoid of merits, fails and is dismissed.
No order as to cost.
Order Date :- 14.05.20114 bgs/