Union Of India v. Nahar Colours And Coating Ltd

HIGH COURT OF JUDICATURE FOR RAJASTHAN ATJODHPUR D.B. Spl. Appl. Writ No. 683/2019 1. Union Of India, Through The Secretary, Ministry OfFinance, Department Of Revenue, North Block, New Delhi.2. Assistant Commissioner Of Income Tax, Circle- 2,Udaipur. ----Appellants Versus Nahar Colours And Coating Ltd, Through Its Director RajkumarSurana, Aged About 55 Years, S/o Late Shri Bijay Kumar Surana,G-1, 90-93, Udyog Viahr, Sukher, Udaipur. ----Respondent For Appellant(s) : Mr. K.K. Bissa, GC. HON'BLE THE CHIEF JUSTICE S. RAVINDRA BHAT HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI 30/07/2019 Order 1.The present appeal filed by the Revenue, challenges an orderof the learned Single Judge whereby, reassessment notices issuedto the respondent-assessee under Sections 147 and 148 of theIncome Tax Act, 1961 were quashed. 2.Acting upon certain information provided by Revenueintelligence, the AO issued reassessment letters for AY 2006-2007and 2009-2010. The basis for reopening was identical, i.e.Revenue intelligence had received information of under valuationof goods cleared by the assessee, by ex facie. Consequent to this,show cause notice proceedings were initiated by the Central ExciseAuthority. The assessee challenges the notices as being incontravention of Sections 147 and 148. 3.It was pointed out during the course of proceedings, that theshow cause notice proceedings before the Central Excise Authorityhave culminated in an order adverse to the Revenue. 4.The Custom Excise And Service Tax Appellate Tribunal(CESTAT), Ahmedabad by its order dated 12.05.2015 M/s.Belgium Glass & Ceramics Pvt. Ltd & Ors. vs. Commissioner ofCentral Excise [Appeal No.E/1851-1854, 1926-1928/2010] andconnected cases including the appeal of the present assessee) hadquashed the initiation of proceedings and the assessment by theorder in original. The order of the CESTAT was subsequentlyupheld by the Gujarat High Court. 5.Noticing these facts, the learned Single Judge was of theopinion that the issuance of notices under Section 147 and 148 inthe over all circumstances and allowing the reassessmentproceeding to continue was wholly unwarranted. 6.Learned counsel for the Revenue argued that at the timewhen reassessment notices were issued, the fate of the CentralExcise proceeding was unknown and that in accordance with theprevailing jurisprudence of reopening of assessment, the noticeswere legal and valid. 7.This Court is of the opinion that the Revenue’s argumentcannot be accepted. Once it is apparent to the Court under Article226 that the basis of reassessment (which was entirely upon theallegations of under invoicing) were found to be false, it wasimproper to allow the Income Tax Authority to proceed to re-assess the income. 7.In these circumstances, the Court finds no reason tointerfere with the impugned order. The appeal is dismissed. Allpending applications are disposed of. (DR. PUSHPENDRA SINGH BHATI),J(S. RAVINDRA BHAT),CJ