BALAJI FOODS Vs. STATE OF UP

JUDGEMENT

(1.) We have heard Shri Krishna Agarwal, learned counsel for the petitioner. Shri C.B. Tripathi appears for the State-respondents. The petitioners have challenged the notice for reassessment under section 21(2) of the U.P. Trade Tax Act issued by the Additional Commissioner, Grade-1, Commercial Tax, Gorakhpur Zone, dated June 30, 2008 and all subsequent proceedings taken for the said year. They have also prayed for direction to the respondents not to proceed to reassess the petitioner for the assessment year 2002-03 (Central) in pursuance of the aforesaid notice.

(2.) The notice for reassessment has been challenged on the ground that the petitioner as rice miller made purchase of paddy from within the State of U.P. on which purchase tax was paid. The rice procured out of such tax-paid paddy was sold inside the State as also in the course of inter-State trade. At the time of original assessment for the year 2001-02 (Central), the petitioners claimed reduction of tax on inter-State sales of rice by an amount equal to tax paid on purchases of paddy under section 15(c) of the Central Sales Tax Act. Long after the assessment was completed, a notice under section 21(2) was issued, by exercising powers on the change of mind, which is not permissible for initiating proceedings under section 21 of the Act.

(3.) The petitioner has relied on Aryaverth Chawal Udyog v. State of U.P.,2008 UPTC 881, in which this court has held that section 15(c) of the Central Sales Tax Act provides reduction of tax leviable on the turnover of rice under the U.P. Trade Tax Act, on the tax paid on the paddy out of which such rice was procured. It does not provide any reduction of tax under the Central Act by the tax on paddy under the State law out of which such rice was procured. The court further held that proceedings under section 21 of the Act were initiated without any material on the basis of which belief could be formed that there was escaped assessment.