Rajes Kumar J.
1. By means of the present writ petition, the Petitioner is challenging the validity of the notice u/s 21 of the U. P. Trade Tax Act, dated March 20, 2010 issued by the Deputy Commissioner, Commercial Tax, sector 12, Meerut Zone, Meerut, under the Central Sales Tax Act.
2. In the present petition, the Petitioner is seeking the following reliefs:
(1) Certiorari quashing the order dated March 20, 2010 (enclosed as annexure 6 to the writ petition) passed by the Additional Commissioner, Commercial Taxes, Meerut Zone, Meerut;
(2) Certiorari quashing the notice dated March 20, 2010 (enclosed as annexure 7 to the writ petition) issued by the Deputy Commissioner, Commercial Taxes, Sector 12, Meerut;
(3) Mandamus restraining Respondent No. 4 in proceeding in any manner pursuant to the order dated March 20, 2010 passed by the Additional Commissioner, Grade I, Commercial Taxes, Meerut Zone, Meerut;
(4) Prohibition restraining/prohibiting the Deputy Commissioner, Commercial Taxes, Sector 12, Meerut (Respondent No. 4) from proceeding in any manner pursuant to the notice dated March 20, 2010 ;
(5) any other suitable writ, order or direction as this honourable court may deem fit and proper in the circumstances of the case ;
(6) to award the cost of the petition to the Petitioner.
3. When the writ petition came up for consideration on April 16, 2010, Sri Bharat Ji Agrawal, Senior Advocate, appearing on behalf of the Petitioner has not pressed relief No. 1 and in respect of other reliefs, he submitted that the Petitioner is challenging the initiation of proceeding u/s 21 of the U. P. Trade Tax Act (hereinafter referred to as, "the Act") for the assessment year 2003-04 under the Central Sales Tax Act on the ground that the proceeding has been initiated on account of change of opinion, which according to him, is not permissible in law. He, therefore, submitted that the notice issued u/s 21 of the Act and the entire consequential proceedings are liable to be quashed. The writ petition was entertained only on this ground and learned standing counsel was directed to file a counter-affidavit. Counter and rejoinder affidavits have been exchanged and the pleadings are complete.
4. With the consent of learned Counsel for the parties, the writ petition has been heard finally at the stage of admission itself and is being disposed of.
5. The brief facts giving rise to the present writ petition are that the Petitioner is a private limited company incorporated under the Companies Act, 1956 having its registered office at 104, Ashoka Estate, Barakhamba Road, New Delhi. The Petitioner has its corporate office at Gurgaon, in the State of Haryana. There are various units situate in different parts of the country. One of the units is situated at Daurala in the State of U. P. This unit is manufacturing Indian-made foreign liquor (IMFL). The Petitioner had taken the factory situated at Daurala only. It is the case of the Petitioner in the writ petition that earlier there was a company known as Seagram Manufacturing Limited (SML) which was later on renamed as Seagram (P) Limited u/s 43A of the Companies Act. Later on, the said company was merged with Seagram India (P) Limited with effect from April, 2003 by an order dated September 3, 2003 passed by the Delhi High Court under Sections 391 and 394 of the Companies Act. Subsequently, with effect from April 23, 2007 the name of the company was changed u/s 21 of the Companies Act to Pernod Ricard India (P) Limited. The assessment year involved in the present writ petition is 2003-04. In the said year, the company in the name of Seagram India (P) Limited was in existence. The Petitioner had its establishment in different States across the country, including States of Maharashtra, Haryana, Punjab, Rajasthan, Chandigarh, Jammu and Kashmir, Himachal Pradesh, Delhi, Bihar, Jharkhand, Kolkata, Dehradun, Gwalior, etc.
6. During the year under consideration, the Petitioner had shown the stock transfer of IMFL to its depot outside the State of U. P. to the extent of Rs. 61,62,48,808 in respect thereof form F have been submitted. On the basis of the form F, the claim of stock transfer has been accepted in the original assessment order. However, a proposal has been sent by the assessing authority to the Additional Commissioner for approval to initiate the reassessment proceeding beyond the normal period of limitation. The proposal was sought mainly on the ground that in form F several columns were incomplete, still the claim of stock transfers have been accepted and the finding that no defect has been found was recorded without examining each and every form individually. The Additional Commissioner issued show-cause notice on February 26, 2010. The Petitioner filed its reply to the show-cause notice and after giving opportunity of hearing, the Additional Commissioner, Grade I, Commissioner Taxes, Meerut Zone, Meerut passed an order dated March 20, 2010 and granted permission to the Deputy Commissioner (Assessment) to initiate the proceeding u/s 21 of the Act. In pursuance thereof, the Deputy Commissioner (Assessment) issued the notice u/s 21 of the Act on March 20, 2010 under the Central Sales Tax Act, which is being challenged in the present writ petition.
7. The learned Counsel for the Petitioner submitted that during the course of the assessment proceeding, the Petitioner had furnished all form F and complete details relating to the stock transfers and after examination of the form F and the details relating thereto, the stock transfers have been accepted. Therefore, the initiation of proceedings on the ground that certain columns of form F were incomplete, is wholly unjustified.
8. Sri S.P. Kesarwani, learned Additional Chief Standing Counsel, submitted that by virtue of amendment in 2002 under the Central Sales Tax Act for the claim of stock transfer, filing of form F was mandatory. Form F should be complete and valid form. Unless form F is complete and valid, the claim of stock transfer cannot be accepted. He submitted that in the show-cause notice issued by the Additional Commissioner, it has been specifically alleged that some of the columns of form F were unfilled and allegations made in the show-cause notice had not been disputed and, therefore, it was admitted that some of the columns were unfilled and since forms were incomplete, the exemption has been wrongly allowed. Therefore, the initiation of proceeding u/s 21 of the Act was justified, inasmuch as the proceeding u/s 21 of the Act can be initiated in a case if wrong exemption has been allowed.
9. We have considered the rival submissions and gone through the various documents.
10. Section 21 of the Act read as follows:
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 or full assessment to the best of its judgment.
Explanation II: For the purposes of this section and 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 reassessment 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 reassessment made under this section in pursuance of such notice.
11. A bare perusal of the aforesaid provision reveals that if on the basis of the material belief is formed that the exemption has been wrongly allowed, the proceeding u/s 21 of the Act can be taken. After the amendment in Section 6A of the Central Sales Tax Act by Amending Act, 2002 the filing of form F is mandatory for the claim of exemption on the stock transfer. The apex court in the case of India Agencies (Regd.), Bangalore v. Additional Commissioner of Commercial Taxes, Bangalore reported in [2005] 139 STC 329 : JT [2005] 1 16 held that the form should be a valid form in accordance with the Rules. If the form is not in accordance with rules, the benefit cannot be allowed. Thus for the claim of exemption, the form should be completely filled. There is no independent finding in respect of each and every form that they were duly filled and in accordance with law. In the proposal sent by the assessing authority for obtaining the approval from the Additional Commissioner one of the grounds was that form F were not completely filled. On the basis of the said approval, the notice was issued by the Additional Commissioner to the Assessee specifically stating therein that some of the columns of the forms were unfilled. The Petitioner filed the reply to the show-cause notice. A perusal of the reply reveals that such allegation has not been disputed. Therefore, we are of the view that initiation of the proceedings u/s 21 of the Act under the Central Sales Tax Act cannot be said to be without any basis and merely on account of change of opinion.
12. On the aforesaid facts and circumstances, we decline to interfere in the matter under Article 226 of the Constitution of India and to quash the proceeding at this stage. However, it will be open to the Petitioner to participate in the proceedings u/s 21 of the Act and file the necessary reply.
13. In the result, the writ petition fails and is accordingly, dismissed.
