Allahabad High Court
M/S J.K. Poly Bag Industry vs Dy. Commissioner (Asstt.)-Ii, Trade ... on 6 July, 2010
Bench: Rajes Kumar, Bharati Sapru
Court No. 37
Civil Misc. Writ Petition No. 98 of 2008
M/s J.K. Poly Bag Industry, Meenakashi Road, Hapur, District
Ghaziabad..............Petitioner.
Vs.
Deputy Commissioner (Assessment)-II, Trade Tax, Hapur and
others..........Respondents.
Hon'ble Rajes Kumar, J.
Hon'ble Bharati Sapru, J.
Rejoinder affidavit filed today, the same may be placed on record.
By means of the present writ petition, the petitioner is challenging the initiation of proceeding under Section 21 of the U.P. Trade Tax Act (hereinafter referred to as the "Act") for the assessment years 2002-03 and 2003-04 under the U.P. Trade Tax Act initiated by the Deputy Commissioner (Assessment)-II, Trade Tax, Hapur, on the ground that the proceeding has been initiated on account of change of opinion.
The dispute relates to the taxbility of Lay Flat Tubings. The petitioner claimed that Lay Flat Tubings, being the attachments of sprinkler, are not liable to tax under Notification No. ST-II-8305/X-11(9)/78-UP Act XV/48-Order-86, dated 30.6.1986 wherein Agricultural implements and parts, accessories and attachments thereof have been exempted from tax. The assessing authority in both the assessment years examined the claim of the petitioner and has held that Lay Flat Tubings being the attachments of sprinkler is exempted from tax under the notification of Agricultural implements and parts, accessories and attachments. The proceeding under Section 21 of the Act has been initiated on the ground that Lay Flat Tubings is PVC pipe and, therefore, liable to tax @ 10% as an unclassified items. A reliance has been placed on the decision of the Commissioner of Trade Tax, dated 21.3.2007 passed under Section 35 of the Act.
Learned counsel for the petitioner submitted that in the original assessment order, the assessing authority has examined the issue relating to taxbility of Lay Flat Tubings and has exempted it from tax treating it as the accessories of the agricultural implements and, therefore, the proceeding under Section 21 of the Act could not be initiated on account of change of opinion. He submitted that the opinion of the Commissioner in the proceeding under Section 35 of the Act cannot be a basis for initiation of the proceeding. A reliance is placed on a recent decision of the Apex Court in the case of Commissioner of Income Tax v. (1) Kelvinator of India Limited, reported in [2010] 320 ITR 561 (SC).
Learned Standing Counsel is not able to defend the stand of the Department.
We have considered the submissions of learned counsel for the petitioner and perused the assessment orders and the notices issued under Section 21 of the Act.
On the facts and circumstances, we are of the view that the proceedings have been initiated only on account of change of opinion. The original assessment orders reveal that the assessing authority has adjudicated the issue relating to taxbility of Lay Flat Tubings in detail and has exempted the same treating it as the accessories of the agricultural implements. There is no material on record on the basis of which a belief could be formed that Lay Flat Tubings is not accessories of the agricultural implements. Since the assessing authority has already adjudicated the issue relating to taxbility of Lay Flat Tubings, the initiation of proceeding under Section 21 of the Act is merely on account of change of opinion, which is not permissible in law. The Apex Court in the case of Commissioner of Income Tax v. (1) Kelvinator of India Limited (Supra) has held that reassessment proceeding cannot be initiated on account of change of opinion.
In view of the above, the writ petition is allowed. The notices issued under Section 21 of the Act for the assessment years 2002-03 and 2003-04, both dated 6.12.2007, are hereby quashed.
6.7.2010 OP