Allahabad High Court
M/S Ripe Components Technologies ... vs The Commissioner Commercial ... on 28 July, 2022
Bench: Saumitra Dayal Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD
?Court No. - 38
Case :- SALES/TRADE TAX REVISION No. - 446 of 2019
Revisionist :- M/S Ripe Components Technologies Privete Limited .
Opposite Party :- The Commissioner Commercial Taxes
Counsel for Revisionist :- Shubham Agrawal
Counsel for Opposite Party :- C.S.C.
Hon'ble Saumitra Dayal Singh,J.
1. Heard Shri Shubham Agrawal, learned counsel for the assessee and Shri A.C. Tripathi, learned Standing Counsel for the State.
2. Present revision has been filed by the assessee against the order of the Commercial Tax Tribunal, NOIDA, dated 30.08.2019 in Second Appeal No. 53 of 2018 for A.Y. 2010-11 (U.P.). The Tribunal has dismissed the aforesaid appeal along with other similar appeals filed by the assessee being Second Appeal No. 51 of 2018 for A.Y. 2008-09 (U.P.), Second Appeal No. 52 of 2018 for A.Y. 2009-10 (U.P.) and Second Appeal No. 54 of 2018 for A.Y. 2011-12 (U.P.).
3. Revision was admitted on the following question of law:
"Whether the Tribunal was justified in affirming the validity of reassessment proceedings based merely on the basis of subsequent judgement, which is in teeth of the law declared by the Division Bench of this Hon'ble Court in the case of Samsung India Electronics Private Limited (supra), by which on similar facts the reassessment proceedings have been quashed?"
4. Upon hearing the parties, it transpires, the assessee is a manufacturer of battery chargers used with mobile phone handsets. The assessee claims, those commodities to be parts of cellphone and, therefore, taxable under Entry no. 28 Part B, Schedule II of the U.P. Value Added Tax Act, 2008, at the rate of 4%. This claim of the assessee remained unquestioned in the original assessment proceedings for the A.Y. in question, vide assessment order dated 28.10.2013. It was taxed accordingly.
5. Later, vide reassessment order dated 09.03.2017, the assessee was subjected to tax with respect to turnover of sales of mobile phone chargers, at the rate of 13.5% treating the same to be unclassified commodity. That order was confirmed by the First Appeal Authority, vide its order dated 16.01.2018, as has been further confirmed by the Tribunal, by means of order impugned in the present revision.
6. Having heard learned counsel for the parties and having perused the record, there is no denying that the reassessment proceedings were initiated and concluded against the petitioner solely in view of the later decision of the Supreme Court dated 17.12.2014 in Civil Appeal No. 11486-11487 of 2014 (State of Punjab & Ors. Vs. Nokia India Pvt. Ltd.). There, in a case arising from Punjab & Haryana High Court, in the context of Punjab Value Added Tax Act, 2005, the Supreme Court observed as below:
"Further, the battery in the cell phone can be charged directly from the other means also like laptop without employing the battery charger, implying thereby, that it is nothing but an accessory to the mobile phone."
7. Armed with that observation made by Supreme Court, the present assessee has been reassessed. The law on the point was discussed by the division bench of this Court in Writ Tax No. 435 of 2016 (M/s Samsung India Electronics Pvt. Ltd. Vs. State of U.P. & 2 Ors.) decided on 01.08.2016, amongst others, with respect to battery chargers, in the context of reassessment proceedings, under the Act.
8. After considering the submissions advanced in that case, division bench reached the following conclusions:
"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."
9. Reassessment could arise under Section 29 of the Act if the Assessing Authority had reason to believe that the whole or any part of the turnover of the dealer, for any assessment year or part thereof, had escaped assessment to tax. The word "escaped" would require a definite conclusion to exist. A judicial opinion expressed by a higher court, subsequent to the assessment of assessee, that too in the context of facts pertaining to another assessee and legal issues arising in the context of another enactment may not give rise to such reassessment, by way of an automatic consequence.
10. Primarily, reassessment proceedings seek to target concealed turnover. They also may include other cases where rates of tax may be involved. However, to authorize a reassessment on the basis of law declared by the Supreme Court on a date much later than the date of original assessment would run the risk of disturbing closed assessment proceedings. It introduces an element of uncertainty.
11. Though all judgements are retrospective unless made prospective, at the same time, in the context of reassessment, that principle may not be blindly applied as may potentially create multiplicity of litigation.
12. In any case, in view of the decision of division bench of this Court in M/s Samsung India Electronics Pvt. Ltd. (supra), question of law (as framed above) is answered in the negative i.e. in favour of the assessee and against the revenue.
13. Revision stands allowed.
Order Date :- 28.7.2022
Prakhar
