Cuttack, May 7: Orissa High Court has ruled that reassessment proceedings to impose VAT cannot be initiated on the same turnover if no tax was levied by the assessing officer during an earlier assessment.
The high court ruling was given in the case of Sarada Mines Private Ltd, in which the state government's commercial tax department had initiated reassessment proceedings for 2008 to 2011 and later followed with an order imposing Rs 132 crore tax, along with penalty of Rs 264 crore. The reassessment was done for 2008 to 2011 on the ground that Sarada Mines had sold calibrated lump ore (CLO) in the guise of run of mines (ROM) ore to Jindal Steel Private Limited.
ROM is iron ore consisting of raw unprocessed ores in its natural state obtained after blasting or digging was excavated. CLO is obtained after crushing of ROM in the crusher and sizing in the screen.
While selling price of ROM was Rs 400, in the case of lump ore it was around Rs 2,000 to Rs 4,000.
In 2012, the Sarada Mines had challenged in the court both the reassessment order and the consequent demand notice issued on November 26, 2012.
"If the reassessment is sought to be done on same turnover, which was subject matter of earlier assessment and no tax was levied by the assessing officer by taking a particular view, then reassessment proceedings cannot be initiated as it would be a reassessment only on the ground of change of opinion. Thus, it would become without jurisdiction," the judges observed in the April 20 order which was available yesterday.
The judges further observed: "The attempt to reopen the assessment proceedings is clearly by taking another view of the matter, which is legally impermissible."
"Besides, there is no iota of evidence on record to show that the petitioner (Sarada Mines) has sold CLO in the guise of ROM," the court observed.