Axalto Cards and Terminals (I) Ltd. vs State of U.P. and others

The petitioner is a company having its office at Noida, U. P. It has imported SIM cards and Smart cards and thereafter they were sent to Hyderabad. In the assessment year 2000-01, the assessment order under the U. P. Trade Tax Act, 1948 ("the Act") was passed on February 27, 2003, in which time was granted to the assessee to submit form F. The assessee submitted this form F and this was also accepted by the order dated July 4, 2003 and no tax was imposed.

In the meantime, a proposal was also sent to the Additional Commissioner, Trade Tax, for granting approval for reopening assessment u/s 21 of the U. P. Trade Tax Act, 1948 ("the Act").

The Additional Commissioner issued notice dated March 5, 2007 to the petitioner to show cause as to why the approval for the reassessment proceedings u/s 21 of the Act be not granted.

The petitioner filed his objection on March 14, 2007. However, the approval was granted on March 20, 2007 and thereafter notice u/s 21 was issued on March 22, 2007. Hence, the present writ petition.

We have heard counsel for the petitioner and the standing counsel for the respondents.

The counsel for the assessee submits that :

The form F was accepted and the transactions were merely a transfer of stock ;

It is change of opinion ; and

The approval dated March 20, 2007 and the notice dated March 22, 2007 are illegal.

The notice for reassessment has been issued on the ground that :

The SIM cards and smart cards that were transferred were identified to be sold to different companies ;

This was Central sales, covered under the Central Sales Tax Act, 1956 (the Central Act) on which the tax could not imposed ; and

The said turnover has escaped assessment.

Section 6A of the Central Act is titled as "Burden of proof, etc. in case transfer of goods claimed otherwise than by way of sale". It provides procedure as to when it can be considered that the burden of proving that goods were moved to its own dealer was discharged.

Sub-section (2) of section 6A of the Central Act provides that the assessing officer has to be satisfied on the particulars submitted by the assessee. In the assessment order dated July 4, 2003 or the subsequent order dated July 4, 2003, the assessing officer has not discussed anything and proceeded to complete the assessment as if it were stock transfers. In view of this, it cannot be said that it is change of opinion. Whether it is merely a stock transfer or not is to be decided after considering the evidence. In view of this, there is no illegality in granting the approval or issuing the notice.

In this writ petition an interim order was passed on April 24, 2007, granting liberty to the assessing officer to pass the order, however it was mentioned that order will not be served on the petitioner. It is not clear whether any order has been passed or not.

Considering the aforesaid circumstances, the petitioner may file certified copy of this order in the week commencing April 4, 2011, before the assessing officer and in case no order has been passed he may pass the order in accordance with law. In case it has been passed then it may be served.

In view of the fact that the interim order was operative, we further clarify that the period from date of interim order, namely, April 24, 2007 till the petitioners file the certified copy of this order before the assessing officer, will be excluded while calculating the limitation in passing the order in the reassessment proceeding. With the aforesaid observations, the writ petition is dismissed.