In the absence of recording ‘reason to believe’ non-payment of tax on account of concealment etc., in the notice, extended period cannot be invoked
In the instant case, Assessment Notice was issued to ITD-ITD CEM JV (the Petitioner) by invoking extended period in terms of the proviso of sub-section 1 of Section 34 of the DVAT Act.
The Hon’ble High Court of Delhi relied upon the case of H.M. Industries Vs. Commissioner of Value Added Tax [215 (2014) DLT 671 (DB)]and held that pre-condition for invoking the extended period is that the Commissioner should record ‘reasons to believe’ that the tax has not been paid and that the reason for non-payment of tax should be concealment, omission or failure to disclose full material particulars on the part of the assessee. ‘Reasons to believe’ must be disclosed clearly in the record prior to the issuance of the default Assessment Notice/Order or in the said Notice/Order itself. In the absence of any reason to believe,the Hon’ble High Court quashed the Impugned Notice.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Email: firstname.lastname@example.org)