# Assotech Realty Pvt. Ltd v. Addl. Commissioner, Gr.-1 Commercial Tax Ghaziabad & Ors

- **Citation:** (2019) 2 ILRA 1345
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-08-28
- **Case number:** Writ Tax No. 354 of 2017
- **Bench:** Bharati Sapru, Piyush Agrawal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/assotech-realty-pvt-ltd-v-addl-commissioner-gr-1-commercial-tax-ghaziabad-ors-44589
- **Pages:** 10

## Headnote

A. U.P. Value Added Tax Act, 2008-Section
22, 29(7)-Completed assessment should not
be reopened on the basis of the subsequent
judgment-Reassessment
notice
dated
18.02.2017 was issued by Respondent No. 1,
for
re-opening
assessment
(AO
dated
30.04.2013) for the year 2009-10, in view of
SC judgment in Larsen & Toubro Ltd. and
others Vs. State of Karnataka and others,
2013 NTN (153) 65. Respondent No. 1 vide
impugned order dated 30.03.2017, granted
permission and impugned show cause notice
dated 22.04.2017 was issued. Allowing the
petition,
the
High
Court
held-The
Department cannot be authorized to reopen
the assessment, which stood closed on the
basis of law as it stood at the relevant time,
1346 INDIAN LAW REPORTS ALLAHABAD SERIES
on the ground of the subsequent judgments
of the Hon'ble Apex Court- Reopening of
proceeding of completed assessment in
question renders bad and in colorable
exercise of power and without jurisdiction.
 (Para 22, 23, 24, 25, 26 & 27)

Petition filed for quashing sanction order dated
30.03.2017, passed by Additional Commissioner,
Grade- I, Commercial Tax Ghaziabad as well as
consequential notice dated 22.04.2017, passed by
Deputy Commissioner Commercial Tax, Ghaziabad
for assessment year 2009-10.

Writ Petition allowed (E-4)

Precedent followed: -

## Text

2 All. Assotech Realty Pvt. Ltd. Vs Addl. Commissioner, Gr.-1 Commercial Tax Ghaziabad & Ors. 1345
authorities of the State Government and
its instrumentalities as well not only to
disclose correct facts before the Court but
also to disclose full and complete facts so
as to assist the Court appropriately in
discharge of its judicial functions.

44. Having observed as above, we
may only point out at this juncture that the
communication dated 28.11.2018 did not
instruct
learned
Standing
Counsel
appearing for the State of U.P. to make
any such statement that the State had no
objection in case result of the petitioners
of the said case was declared by
University. The manner in which the case
of Ankit Kumar was conducted on behalf
of State of U.P. though cannot be
appreciated for non-disclosure of full and
complete facts, however, we do not find it
a case of any deliberate attempt by the
officers of the State Government to
mislead the Court so as to make the
officers liable to be proceeded against,
under contempt jurisdiction. In this view
of the matter, question no.2 referred to us
is answered as follows:

45. Since instructions of State
Government
contained
in
its
communication dated 28.11.2018 did not
disclose full and complete facts including
the order dated 10.09.2018 passed by
Hon'ble
Supreme
Court
on
the
interlocutory application moved by State
of U.P. itself (IA No.1216 of 2017), the
said instructions could not be acted upon,
however, in absence of any specific
instruction to learned State counsel to
submit before this Court that State did not
have any objection if result of those
admitted students is declared by the
University, the contempt proceedings
against officers of the State may not be
initiated/instituted.

46. Reference made is answered
thus.

47. Let writ petition be listed before
Hon'ble Single Judge for hearing and
decision accordingly.
----------

(2019)10ILR A 1345

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 28.08.2019

BEFORE

THE HON'BLE BHARATI SAPRU, J.
THE HON'BLE PIYUSH AGRAWAL, J.

Writ Tax No. 354 of 2017

Assotech Realty Pvt. Ltd. ...Petitioner
Versus
Addl. Commissioner, Gr.-1 Commercial
Tax Ghaziabad & Ors. ...Respondents

Counsel for the Petitioner:
Sri Suyash Agarwal, Sri R.R. Agarwal, Sri
Rakesh Ranjan Agarwal

Counsel for the Respondents:
C.S.C.

A. U.P. Value Added Tax Act, 2008-Section
22, 29(7)-Completed assessment should not
be reopened on the basis of the subsequent
judgment-Reassessment
notice
dated
18.02.2017 was issued by Respondent No. 1,
for
re-opening
assessment
(AO
dated
30.04.2013) for the year 2009-10, in view of
SC judgment in Larsen & Toubro Ltd. and
others Vs. State of Karnataka and others,
2013 NTN (153) 65. Respondent No. 1 vide
impugned order dated 30.03.2017, granted
permission and impugned show cause notice
dated 22.04.2017 was issued. Allowing the
petition,
the
High
Court
held-The
Department cannot be authorized to reopen
the assessment, which stood closed on the
basis of law as it stood at the relevant time,
1346 INDIAN LAW REPORTS ALLAHABAD SERIES
on the ground of the subsequent judgments
of the Hon'ble Apex Court- Reopening of
proceeding of completed assessment in
question renders bad and in colorable
exercise of power and without jurisdiction.
 (Para 22, 23, 24, 25, 26 & 27)

Petition filed for quashing sanction order dated
30.03.2017, passed by Additional Commissioner,
Grade- I, Commercial Tax Ghaziabad as well as
consequential notice dated 22.04.2017, passed by
Deputy Commissioner Commercial Tax, Ghaziabad
for assessment year 2009-10.

Writ Petition allowed (E-4)

Precedent followed: -
1. K. Raheja Development Corpn. Vs St. of
Karnataka, (2005) 5 SCC 162 (Para 3, 8)
2. Varun Beverages Ltd. Vs St. of U.P. & ors.,
(2017) 99 VST 393 (Para 12)
3. Hindustan Liver Ltd. Vs R.W. Wadkar ACIT,
(2004) 268 ITR 332 (Para 13)
4. CIT Vs Kelvinator India Ltd., (2010) 320 ITR
561 (SC) (Para 14)
5. M/s BHEL Vs St. of U.P. & ors., Writ Tax No.
181 of 2014, decided on 28.02.2017 (Para 14)
6. St. of U.P. Vs Arayaverth Chawal Udyog
Ltd., (2015) 17 SCC 324 (Para 16)
7. M/s Samsung Electronics (India) Pvt. Ltd. Vs
St. of U.P. & 2 ors., (2017) UPTC 63 (Para 23)
8. Dy. Commissioner of Income Tax Vs
Simplex Concrete Piles (India) Ltd., (2012) 25
taxmann.com, 283 (SC) (Para 24)
Precedent distinguished: -
1. Larsen and Toubro Limited and Others Vs.
State of Karnataka and Others, 2013 NTN
(153) 65 (Para 4, 5, 17, 18, 22)
(Delivered by Hon'ble Piyush Agrawal, J.)

1. By means of the present writ
petition, the petitioner has prayed for
issuing a writ of certiorari quashing the
sanction order dated 30.03.2017 passed
by
the
respondent no.
1
for
the
Assessment Year 2009-10 as well as the
consequential notice dated 22.04.2017 for
the Assessment Year 2009-10 passed by
the respondent no. 2.

2. The facts of the case are that the
petitioner is a Company incorporated
under the provisions of Indian Companies
Act, 1956 having its registered Office at
46, Janpath, 1st Floor, New Delhi and
U.P. Office at Windsor Club, Vaibhav
Khand, Indrapuram, Ghaziabad. The
present Office of the petitioner is at Plot
No. 22, Sector - 135, Noida. The
petitioner is a builder and engaged in the
business of construction and sale of flats
to the interested persons/allottee, after
purchasing
the
land
from
the
Development Authorities and developed
the land so purchased.

3. The petitioner had not entered
into any tripartite agreement between the
petitioner and the purchaser, as the
petitioner
developed
the
land
after
purchasing
the
same
from
the
Development Authorities. In other words,
the petitioner is a sole owner of the land
on which the flats were constructed.
According to the petitioner, the ownership
of the flats continues with it from the time
of construction till the execution of
registered sale deed in favour of the
interested person/prospective buyers and
as such, the petitioner does not fall within
the category of works contract. The
original assessment order was passed for
the year in dispute on 30.04.2013. The
Assessing Authority, after considering all
the materials available on record as well
as the judgement of the Apex Court in the
case
of
K.
Raheja
Development
Corporation Vs. State of Karnataka,
2 All. Assotech Realty Pvt. Ltd. Vs Addl. Commissioner, Gr.-1 Commercial Tax Ghaziabad & Ors. 1347
reported in (2005) 5 SCC 162, letter of
allotment, etc., came to the conclusion
that there is no transfer of any material in
execution of works contract and the
petitioner is not liable for payment of any
tax.

4. Thereafter, reassessment notice
dated 18.02.2007 was issued by the
respondent no. 1 under section 29(7) of
the U.P. Value Added Tax Act, 2008
(hereinafter referred to as, ' VAT Act') to
show cause as to why permission may not
be granted to the Assessing Authority for
reopening the completed assessment in
view of the judgement of the Apex Court
in Larsen and Toubro Limited and
Others Vs. State of Karnataka and
Others, reported in 2013 NTN (153) 65,
where the builders were liable for
payment of tax on the transfer of material
used in execution of works contract. In
response to the notice, the petitioner
submitted a detailed reply explaining each
and every issue raised in the notice and
stated that the proceedings for granting
permission to reopen the completed
assessment may be dropped, as there is no
fresh material.

5. The respondent no. 1, by means
of the impugned order dated 30.03.2017,
granted permission to the respondent no.
2 to reopen the completed assessment on
the ground that the petitioner has received
booking amount from the prospective
purchasers, which amounts to transfer of
property in execution of works contract
and hence, the turnover of the petitioner
has escaped assessment. Further, on the
basis of the judgement in Larsen and
Toubro Limited (supra), the petitioner is
also liable for payment of tax. In
pursuance of the order dated 30.03.2017,
the impugned reassessment show cause
notice dated 22.04.2017 under section
29(7) of the Act has been issued. Hence,
this writ petition.

6. We have heard Shri Rakesh
Ranjan Agarwal, learned Senior Counsel,
assisted by Shri Suyash Agarwal, learned
counsel for the petitioner and Shri C.B.
Tripathi, learned Special counsel for the
respondents.

7. Learned counsel for the petitioner
has
submitted
that
admittedly,
the
petitioner is a builder, who purchases the
land from the Development Authorities.
Thereafter, it constructs flats over it being
the sole owner of the land. The flats are
sold only after completion through
registered sale deed executed in favour of
interested buyers. It is further submitted
that the modus operandi of its business in
the disputed year, i.e., 2009-10, was
identical and similar with the previous as
well as in subsequent years.

8. The learned counsel for the
petitioner has further submitted that for
the Assessment Years 2004-05 and 200506, the Assessing Authority had levied tax
on the petitioner treating it as a dealer and
imposed tax on the material used in the
execution of works contract on the basis
of the judgement of the Apex Court in the
case
of
K.
Raheja
Development
Corporation (supra). Against the said
order, Writ Petition No. 997 of 2006 and
Writ Petition No. 1238 of 2006 were filed
before this Court, which were allowed on
23.03.2007. Against the said order, the
State went in SLP before the Apex Court.
The Apex Court, vide its order dated
30.12.2007, allowed the appeal filed by
the State only on the limited ground that
the writ petition against the assessment
order was not maintainable. The petitioner
1348 INDIAN LAW REPORTS ALLAHABAD SERIES
should have filed the appeal as provided
under the Act.

9. In pursuance of the order of the
Apex Court, the petitioner filed an appeal,
the appellate authority allowed the appeal
and remanded the matter back to the
Assessing Authority for deciding afresh
by order dated 20.10.2009. Against the
aforesaid order, the petitioner preferred
Second Appeal Nos. 231 and 232 of 2010
before the Commercial Tax Tribunal,
Noida Bench, Noida, which were allowed
vide
order
dated
11.06.2010.
The
Tribunal,
after
considering
all
the
materials available on record, allotment
letter and the judgement of the Apex
Court as well as other judgements on the
subject, came to the conclusion that the
petitioner is not a work contractor and
there is no liability for payment of tax on
the material used in the execution of
works contract. Since there was a mistake,
apparent on record, hence an application
under section 22 of the VAT Act was
moved before the Tribunal and the same
was also allowed on 12.07.2010. Against
the order passed by the Tribunal, holding
the petitioner was not liable for payment
of tax on the material used in execution of
works contract, the Department preferred
a revision before this Hon'ble Court,
which was dismissed on 20.09.2012.

10. It has further been argued that
against the judgement and order of this
Court dated 20.09.2012, holding that the
petitioner is not a dealer and hence, not
liable for tax on the material used for
execution of works contract, neither any
appeal was preferred by the State, nor any
material was brought on record showing
the order of this Court has been set
aside/modified/recalled / stayed by the
competent Court. In other words, the
Department has accepted the order passed
by this Court.

11. It is further argued by the
learned counsel for the petitioner that
once the issue has been settled interparties and there is no new material
brought on record to suggest otherwise,
the completed assessment in disputed, i.e.,
2009-10, cannot be permitted to be
reopened merely on the basis of change of
opinion and therefore, the impugned order
dated
30.03.2017
and
consequential
notice dated 22.04.2017 are liable to be
set aside.

12. The counsel for the petitioner
has relied upon the judgement of this
Court in Varun Beverages Ltd. Vs. State
of U.P. & Others reported in (2017) 99
VST 393 (All); wherein, this Court has
held as under:-

"8. It is not disputed before us
that if there is a change of opinion,
reassessment under Section 29(7) is not
permissible. When it can be said "change
of opinion" has been recently considered
by Apex Court in State of Uttar Pradesh
and others Vs. Aryaverth Chawl Udyoug
and others (2016) 91 VST 1 (SC) wherein
after referring to its earlier decisions in
Binani Industries Limited, Kerala Vs.
Assistant Commissioner of Commercial
Taxes, VI Circle, Bangalore 2007 (15)
SCC
435
and
A.L.A.
Firm
Vs.
Commissioner of Income-tax 1991 (2)
SCC 558 the Court said as under:

"If a conscious application of
mind is made to the relevant facts and
material available or existing at the
relevant point of time while making the
assessment and again a different or
divergent view is reached, it would
tantamount to "change of opinion". If an
2 All. Assotech Realty Pvt. Ltd. Vs Addl. Commissioner, Gr.-1 Commercial Tax Ghaziabad & Ors. 1349
assessing authority forms an opinion
during
the
original
assessment
proceedings on the basis of material facts
and subsequently finds it to be erroneous;
it is not a valid reason under the law for
reassessment."

9. In the present case, entire
material which is now being taken into
consideration
for
the
purpose
of
impugned notice and approval granted
was available before Assessing Authority
and after having considered the same,
assessment was made. Now authorities,
taking a different view, have issued
impugned notice. Thus, it is a clear case
of change of opinion, hence reassessment
is not permissible in view of aforesaid
exposition of law."

13. It is further argued that in the
impugned order, the respondent has relied
upon a survey report dated 22.09.2009
submitted by the SIB Unit, for which no
notice, whatsoever, was given by the
respondent no. 1. The said survey report
has been relied upon behind the back of
the petitioner as the petitioner was neither
put to any notice while issuing notice
dated 18.02.2007 under section 29(2) of
the VAT Act (Anneuxre No. 6 to the writ
petition), nor before passing the impugned
order dated 30.03.2017 (Anneuxre No.8
to the writ petition). Therefore, the
impugned order, relying upon the survey
report, is also bad. On the said point, the
petitioner has relied upon the judgement
in Hindustan Liver Limited Vs. R.W.
Wadkar ACIT, reported in (2004) 268
ITR 332 (Bom.) at page 338; wherein,
following observation has been made:-

"21. The reasons recorded by
the Assessing Officer nowhere state that
there was failure on the part of the
assessee to disclose fully and truly all
material
facts
necessary
for
the
assessment of that assessment year. It is
needless to mention that the reasons are
required to be read as they were recorded
by the Assessing Officer. No substitution
or deletion is permissible. No additions
can be made to those reasons. No
inference can be allowed to be drawn
based on reasons not recorded. It is for
the Assessing Officer to disclose and open
his mind through reasons recorded by
him. He has to speak through his reasons.
It is for the Assessing Officer to reach the
conclusion as to whether there was failure
on the part of the assessee to disclose
fully and truly all material facts necessary
for his assessment for the concerned
assessment year. It is for the Assessing
Officer to form his opinion. It is for him to
put his opinion on record in black and
white. The reasons recorded should be
clear and unambiguous and should not
suffer from any vagueness. The reasons
recorded must disclose his mind. The
reasons are the manifestation of the mind
of the Assessing Officer. The reasons
recorded should be self-explanatory and
should not keep the assessee guessing for
the reasons. Reasons provide the link
between conclusion and evidence. The
reasons recorded must be based on
evidence. The Assessing Officer, in the
event of challenge to the reasons, must be
able to justify the same based on material
available on record. He must disclose in
the reasons as to which fact or material
was not disclosed by the assessee fully
and truly necessary for assessment of that
assessment year, so as to establish the
vital link between the reasons and
evidence. That vital link is the safeguard
against
arbitrary
reopening
of
the
concluded
assessment.
The
reasons
recorded by the Assessing Officer cannot
be supplemented by filing an affidavit or
1350 INDIAN LAW REPORTS ALLAHABAD SERIES
making an oral submission, otherwise, the
reasons which were lacking in the
material
particulars
would
get
supplemented, by the time the matter
reaches the court, on the strength of the
affidavit or oral submissions advanced."

14. Learned counsel for the
petitioner further submitted that even
assuming, without admitting, that the
survey report dated 22.09.2009 was to be
taken into account, but the same were
already considered by the then Assessing
Authority while passing the original
assessment order. Therefore, there is no
fresh or tangible material or information
to form a reasonable belief to have a livelink with the information of belief that a
turnover has escaped assessment, which
could legally be permitted for initiation of
reassessment proceedings under section
29(7) of the VAT Act. At best, it can be
said that it is only a change of opinion,
which is not permissible under the Act. In
support of this submissions, learned
counsel for the petitioner has relied upon
the judgements in CIT Vs. Kelvinator
India Limited, reported in (2010) 320
ITR 561 (SC) and M/s Bharat Heavy
Electronics Limited Vs. State of U.P. and
Others (Writ Tax No. 181 of 2014,
decided on 28.02.2017), (see pages 11,
12, 19 & 20). The relevant observations
made in the judgement are quoted below:-

"It is settled law that the
jurisdiction
to
initiate
reassessment
proceedings
arises
only
after
the
assessing authority records his reason to
believe that any turnover has escaped
assessment Thus, not only is the belief of
escapement
essential
but
more
importantly, it is necessary for the
Assessing Authority to record his reason/s
as to existence of the belief of such
escapement. In Commissioner of Sales
Tax Vs. Bhagwan Industries (P) Ltd.
(1973) 31 STC 293 (SC) the phrase
"reason to believe"appearing in a similar
provision in Section 21 of the U.P, Sales
Tax Act, 1948 providing for reassessment
was interpreted thus:

"The words "reason to believe" in
Section 21 of the U.P. Sales Tax Act convey
that there must be some rational basis for the
assessing authority to form the believe that the
whole or any part of the turnover of a dealer
has, for any reason, escaped assessment to tax
for some year. If there are, in fact, some
reasonable
grounds
for
the
assessing
authority to believe that the whole or any part
of the turnover of a dealer has escaped
assessment, 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 ground are of an extraneous
character, the same would not warrant
initiation of proceedings under the above
section. If, however, the grounds are relavant
and have a nexus with the formation of belief
regarding escaped assessment, the assessing
authority would be clothed with jurisdiction to
take action under the section. Whether the
ground are adequate or not is not a matter
which would be gone into by the High Court
or the Supreme Court, for the sufficiency of
the grounds which induced the assessing
authority to act is not a justiciable issue. What
can be challenged is the existence of the belief
but not the sufficiency or reasons for the
belief. At the same time, the belief must be
held in good faith and should not be a mere
pretence."

Applying the above principle,
this court, in the case of Rathi Industries
Limited Vs. State of U.P. and another has
further elaborated-

From a perusal of the aforesaid,
it is apparently clear that the words
2 All. Assotech Realty Pvt. Ltd. Vs Addl. Commissioner, Gr.-1 Commercial Tax Ghaziabad & Ors. 1351
"reason to believe" in Section 21 of the U.P.
Trade Tax Act conveys that there must be
some rational basis for the assessing authority
to form a belief that the whole or any party of
the turnover of a dealer has for any reasons
escaped
assessment.
Such
reason
or
reasonable ground to believe that the whole
or any part of the turnover had escaped
assessment must be germane to the formation
of the believe regarding escaped assessment.
Such reasons or grounds must have a nexus
with the formation of the belief. The approach
has to be practical and not pedantic."

In absence of any material it was
not open to the authorities to assume existence
of such facts for the purpose of acquiring
jurisdiction and to later, in the course of
reassessment proceedings to conduct an
inquiry as to its existence or otherwise. The
Supreme Court in the case of Arun Kumar &
Ors Vs. Union of India & Ors (2007) 1 SCC
732 has categorically held :

74. A "jurisdictional fact" is a fact
which must exist before a court, tribunal or an
authority
assumes
jurisdiction
over
a
particular matter. A jurisdictional fact is one
on existence or non-existence of which
depends jurisdiction of a court, a tribunal or
an authority. It is the fact upon which an
administrative agency's power to act depends.
If the jurisdictional fact does not exist, the
court, authority or officer cannot act. If a
court or authority wrongly assumes the
existence of such fact, the order can be
questioned by a writ of certiorari. The
underlying principle is that by erroneously
assuming existence of such jurisdictional fact,
no authority can confer upon itself jurisdiction
which it otherwise does not possess.

75. In Halsbury's Laws of
England, it has been stated:

"Where the jurisdiction of a
tribunal is dependent on the existence of a
particular state of affairs, that state of
affairs my be described as preliminary to,
or collateral to the merits if, the issue. If,
at the inception of an inquiry by an
inferior tribunal, a challenge is made to
its jurisdiction, the tribunal has to make
up its mind whether to act or not and can
give a ruling on the preliminary or
collateral issue; but that ruling it not
conclusive."

76.
The
existence
of
jurisdictional fact is thus sine qua non or
condition precedent for the exercise of
power by a court of limited jurisdiction.

84. From the above decisions, it
is clear that existence of "jurisdictional
fact" is sine qua non for the exercise of
power. If the jurisdictional fact exists, the
authority can proceed with the case and
take
an
appropriate
decision
in
accordance with law. Once the authority
has jurisdiction in the matter on existence
of "jurisdictional fact", it can decide the
"fact in issue" or "adjudicatory fact". A
wrong decision on "fact in issue" or on
"adjudicatory fact" would not make the
decision
of
the
authority
without
jurisdiction
or
vulnerable
provided
essential or fundamental fact as to
existence of jurisdiction is present."

Thus we accept the contention of the
petitioner that in this case, in the state of the
reason to believe as contained in the proposal
made by the petitioner's assessing authority, the
jurisdictional fact of applicability of Rule 9 (3) of
the Rules is not established.

15. It was further argued that while
passing the original assessment order, the
survey report dated 22.09.2009 was taken
into account and the petitioner has given a
satisfactory reply to the same as well.
Even if the discovery of an inadvertent
mistake or non-application of mind during
the assessment would not be justifiable
ground for re-initiating proceeding under
section 29(7) of the Act.
1352 INDIAN LAW REPORTS ALLAHABAD SERIES

16. In support of his submission, he
has relied upon the judgement of the
Apex Court in State of U.P. Vs.
Arayaverth
Chawal
Udyog
Limited
(2015)
17
SCC
324;
wherein,
in
paragraph nos. 30 & 31, the Apex Court
has held as under:-

"30. In case of there being a
change of opinion, there must necessarily
be a nexus that requires to be established
between the "change of opinion" and the
material present before the assessing
authority. Discovery of an inadvertent
mistake or non-application of mind
during assessment would not be a justified
ground to reinitiate proceedings Under
Section 21(1) of the Act on the basis of
change
in
subjective
opinion
(Commissioner of Income-tax v. Dinesh
Chandra H. Shah: [1972] 3 SCC 231 :
and Income-tax Officer v. Nawab Mir
Barkat Ali Khan Bahadur: [1975] 4 SCC
360.

31. The above observations
regarding the import of the words "reason
to believe" though made in the context of
different statutes have, in our opinion,
equal bearing on the construction of those
words in Section 21 of the Act."

17. Rebutting the contentions of the
learned counsel
for the petitioners,
learned counsel for the respondents has
argued that it is not a case of change of
opinion. The petitioner is a builder and is
making construction for and on behalf of
the prospective buyers after getting the
booking amount and in view of the latest
judgement in the case of Larsen and
Toubro Limited (supra), where it has
been held that the material used in the
execution of works contract is liable to be
taxed as the works contractor enters into
the agreement. In the case in hand, the
petitioner
has
issued
the
letter
of
allotment to the prospective buyers and
was receiving payments in installment,
which itself shows that the petitioner has
entered into an agreement and therefore,
is liable to be taxed, accordingly and the
same has escaped to tax at the time of
passing the original assessment order.
Therefore, the present writ petition is
liable to be dismissed.

18. We have perused the record. It is
beyond doubt that the reassessment
proceedings have been initiated against
the petitioner to reopen the completed
assessment in view of the subsequent
judgement of the Apex Court in Larsen
and Toubro Limited (supra). It is
admitted fact that at the time of passing of
the
original
assessment
order,
the
Assessing Authority has taken note of
survey report dated 22.09.2009 and
thereafter, passed the original assessment
order holding that the petitioner is not
liable for payment of tax on the material
used in the execution of works contract.

19. The facts are not disputed. The
petitioner has not entered into any
tripartite agreement with the prospective
buyers or with any development authority
from whom the land was purchased. The
petitioner, after purchase of the land from
the
development
authority,
has
constructed the flats as per the layout plan
sanctioned by the local authorities. The
ownership
of
the
flat
was
never
transferred before its completion. The
flats are sold by the petitioner only after
its completion through registered sale
deeds executed in favour of the interested
buyers. The petitioner's business module
has been same in the previous and
subsequent years. For the assessment
years 2004 - 05 and 2005-06 tax was
2 All. Assotech Realty Pvt. Ltd. Vs Addl. Commissioner, Gr.-1 Commercial Tax Ghaziabad & Ors. 1353
levied, which was challenged before this
Court in Writ Petition Nos. 997 & 1238 of
2006 and was allowed on 23.03.2007,
against the said judgement, the State filed
Special Leave Petition before the Apex
Court and the Apex Court allowed the
Special Leave Petition on the ground that
against the assessment order, writ petition
was not maintainable.

20. The petitioner contested the
matter through the remedies provided
under the Act and the Tribunal, by its
order dated 11.06.2010, after recording a
finding of fact, came to the conclusion
that the petitioner was not liable for
payment of tax on the material used in the
execution of works contract, against
which the Revenue preferred a Trade Tax
Revision, which was dismissed by this
Court on 20.09.2012 reported in 2012
VSTI (15) B-923. It has been accepted, at
the Bar, that against the order dated
20.09.2012 passed by this Court in CCT
Vs. S/s Assotech Ralty Pvt. Ltd 2012
VSTI (15) B-923, no appeal has been
preferred before the Apex Court. The
Department has accepted the order passed
by this Court. Once an order, which has
been passed and has been confirmed by
this Court under the provision of the Act,
the case in hand, then in absence of any
new material being brought on record, the
completed assessment should not have
been reopened.

21. We are not entering into the
merit of the case, but confining it to the
reassessment proceeding under section 29
of the Act.

22. The proceeding of reassessment
has been initiated on the basis of a
subsequent judgement passed in the case
of Larsen and Toubro Limited (supra).
The Honb'le Apex Court, time and again,
has held that completed assessment
should not be reopened on the basis of
subsequent judgement being given.

23. This Court in the case of M/s
Samsung India Electronics Pvt. Ltd. Vs.
State of U.P. & 2 Others, reported in
2017 UPTC 63, in paragraph nos. 11, 14
& 15, has held as under:-

"11. Further, a subsequent
judgment cannot be used to reopen
assessments or disturb past assessments
which have been concluded. [See Para 7,
Austin Engineering V. JCIT (2009) 312
ITR 70 (Guj.) Para 4 and 5, Bear Shoes
2011 (331) ITR 435 (Mad.), B.J. Services
Co. Middle East Ltd. v. Deputy Director
(2011) 339 ITR 169 (Uttarakhand), Sesa
Goa V. JCIT 2007 (294) ITR 101 (Bom.),
Geo Miller and Co. 2004 (134) Taxmann
552 (Cal)]. Reliance is also placed on the
decision of the Hon'ble Supreme Court in
MEPCO Industries V. CIT, (2010) 1 SCC
434, where the CIT on the basis of a
subsequent decision of the Supreme Court
sought to rectify his earlier order. The
Hon'ble Court held that this would
amount to a change of opinion.

14. Impugned notices are bad
and against principles enunciated by
Apex Court in afore quoted decisions.
This renders the notices and orders bad
and have been passed in colourable
exercise of powers and are without
jurisdiction.

15. This writ petition has to be
allowed with cost as law is well settled
that assessment once having become final
should not have been reopened on the
basis of judgment of the Apex Court. "

24. Similarly, the Apex Court, in the
case of Deputy Commissioner of Income
1354 INDIAN LAW REPORTS ALLAHABAD SERIES
Tax Vs. Simplex Concrete Piles (India)
Limited
reported
in
(2012)
25
taxmann.com 283 (SC) has held as
under:-

"3. We see no error in the
observation made by the Divisoin Bench
of the High Court in the impugned
judgement that once limitation period of
four
years
provided
under
Section
147/149(1A) of the Income Tax Act, 1961
(for short, Rs. The Act') expires then the
question of reopening by the Department
does not arise. In any event, at the relvant
time, when the assessment order got
completed, the law as declared by the
jurisdictional High Court, was that the
civil construction work carried out by the
assessee would be entitled to the benefit
of Section 80HH of the Act, which view
was squarely revsersed in the case of CIT
Vs. N.C. Budharaja & CO. (1993) 204
ITR 412/70 Taxman 312 (SC). The
subsequent reversal of the legal position
by the judgement of the Supreme Court
does not authorize the Department to
reopen the assessment, which stood
closed on the basis of the law, as it stood
at the relevant time."

25. In view of the above cited
judgements and the principles enunciated
therein, reopening of the proceeding of
completed assessment in question renders
bad and in colourable exercise of powers
and without jurisdiction.

26. It is evidently clear that the
assessment, once has become final,
should not have been reopened on the
basis of subsequent judgment of the Apex
Court.

27. In view of the aforesaid facts
and circumstances, we are of the opinion
that the present reassessment proceedings
have been initiated on the basis of
subsequent judgement of the Apex Court,
which
cannot
be
used
to
reopen
assessment or disturb past assessment
which
have
been
concluded.
The
Department cannot be authorized to
reopen the assessment, which stood
closed on the basis of the law as it stood
at the relevant time.

28. We also take judicial notice of
the fact that the country is entering into a
new era of taxation,i.e., Goods & Services
Tax (GST), so the dealers and the
Department are set to take up a new
challenge of the said Goods & Services
Tax. It will be in the interest of both, the
dealers as well as the Department, that all
old pending matters to be decided at the
earliest and attain finality.

29. In the result, the writ petition
succeeds and is allowed. The impugned
order dated 30.03.2017 passed by the
respondent no. 1 for the Assessment Year
2009-10 as well as the consequential
notice
dated
22.04.2017
for
the
Assessment Year 2009-10 issued by the
respondent no. 2 are here by quashed.
----------

(2019)10ILR A 1354

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 26.09.2019

BEFORE

THE HON'BLE CHANDRA DHARI SINGH, J.

Contempt No. 2622 of 2015
&
15 Other Contempt Cases No. 2627 of 2015,
279 of 2016, 278 of 2016, 280 of 2016, 283 of
2016, 284 of 2016, 285 of 2016, 331 of 2016,