- (1.) The petitioner, manufacturer of 'Cotton Coated Fabrics' has challenged the order dated 25/11/2011, passed by the Additional Commissioner, Commercial Tax, Noida Zone Noida under Section 21 (2) of the U.P. Trade Tax Act, 1948 (hereinafter called the "Act, 1948") by which permission has been granted for re-assessment for the years 2005-06 and 2006-07 under the U.P. & the Central Sales Tax Act.
(2.) Counter affidavit and rejoinder affidavits have been exchanged between the parties, and with the consent of the learned counsel for the parties, the writ petition is being finally decided.
(3.) Brief facts necessary to be noted for deciding the issues in the writ petition are: The petitioner's company is engaged in manufacturing and sales of 'Cotton Coated Fabric'. 'Cotton Coated Fabric' is a 100% cotton cloth manufactured on power loom, on which PVC resin and other stabilizers are coated. The petitioner has been paying the additional duty of excise under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (hereinafter called the "Act, 1957"). Notifications under Section 4 of the Act, 1948 were issued from time to time granting exemption for payment of trade tax on various goods including cotton fabrics on all varieties. In this context, notifications dated 31/1/1985, 05/6/1985 and 01/2/1989 were also issued. The petitioner declared his goods to be exempted from trade tax which declarations were accepted by the Assessing Authorities. After accepting the goods as exempted from trade tax after about 10 years, an issue was raised during the Assessment Year 1996-97 as to whether the "cotton coated fabric" manufactured and sold by the petitioner is covered by the exempted notification or not. The matter was taken up to the Tribunal. The Tribunal allowed the appeal and remitted the matter to the Assessing Officer to obtain information as to whether the assessee has been paying the excise and additional excise duty on the goods or not. The Assessing Officer after remand by the Tribunal made inquiries from the Central Excise Authorities and held that the petitioner has been paying the additional excise duty, hence on cotton coated fabrics, the assessee is not liable to pay trade tax. The order passed by the Tribunal as well as by the Assessing Officer pertaining to the year 1996-97 were not challenged by the Department and were allowed to become final. The Assessment orders for the years 2005-06 and 2006-07 (U.P. & Central) were passed by the Assessing Officer on 24/3/2009 and 27/3/2009 respectively whereby the accounts books as well as the declared turnover of sale on cotton coated fabric was accepted as exempted from trade tax. On the very next day i.e. on 25/3/2009, notice under Section 21(1) of the Act, 1948 was issued by the respondent no.4 for the Assessment Year 2005-06 and 2006-07 directing the petitioner to appear before him and explain as to why not proceedings under Section 21(1) be initiated against him. An ex-parte re-assessment order was passed on 25/9/2009 relying on the judgment of this Court in Commissioner Trade Tax, U.P. Vs. M/s. Laxmi Leather Cloth Industries,2008 36 NTN 67. The petitioner challenged the said ex-parte re-assessment order 25/9/2009 as well as the appellate order 17/2/2011 before the Tribunal. The Tribunal allowed the appeal vide its judgment and order 10/8/2011, which order was not challenged any further by the Department. A notice dated 14/10/2011, under the proviso to Section 21(2) of the Act, 1948 was issued by the respondent no.3 for the Assessment Years 2005-06 and 2006-07 on the ground that the "Cotton Coated Fabric" manufactured by the petitioner is not exempted under the notification dated 05/6/1985. The petitioner appeared and objected to the aforesaid notice. Petitioner's case was that the judgment of this Court in M/s. Laxmi Leather Cloth Industries is not attracted. The Additional Commissioner, however, vide its order dated 25/11/2011, authorized the Assessing Officer to proceed with the re-assessment proceedings against the petitioner under the U.P. as well as under the Central Act for the Assessment Years 2005-06 and 2006-07. Consequential notice was issued to the petitioner on 28/11/2011. The petitioner thereafter filed the present writ petition on 16/1/2012. This Court passed an interim order on 24/1/2012 staying the operation of the order dated 25/11/2011 as well as the consequential notices dated 28/11/2011.;