IMPORTANT POINT
Reassessment proceedings under the Uttar Pradesh Value Added Tax Act can only be initiated for turnover escapement, and not for reversing input tax credit, which is treated as an allowance rather than a tax liability.

JUDGMENT :

1. Heard Shri Nikhil Agrawal along with Shri Krishna Mohan Tripathi, counsel for the petitioner and Shri Ankur Agarwal, learned Standing Counsel for the revenue.

2. Present writ petition has been filed to challenge the reassessment order dated 28.03.2023 passed in the case of the petitioner under Section 29(7) of the Uttar Pradesh Value Added Tax Act, 2008 (hereinafter referred to as the 'Act') for the A.Y. 2014-15 (U.P.). Also, challenge has been raised to the order passed by the Additional Commissioner, Grade-1, Moradabad dated 18.3.2023 passed under Section 29(7) of the Act whereby the normal period of limitation to initiate the reassessment proceedings for A.Y. 2014-15 (U.P.) has been extended. Further, challenge has been raised to the reassessment notice dated 22.03.2023.

3. Petitioner is a manufacturer of 'Mentha Oil'. During the A.Y. in question, it purchased various raw materials to manufacture 'Mentha Oil'. Arising from such purchases, it claimed benefit of Input Tax Credit (ITC in short). That claim had been examined by the Assessing Officer in the course of regular assessment proceedings that culminated in the assessment order dated 16.3.2017. In that, the Assessing Officer disallowed ITC claim to the extent of Rs. 3,24,456/-, being composite amount of ITC claimed against raw materials purchased from unregistered dealers. At the same time, the Assessing Officer allowed ITC claimed by the petitioner, Rs. 6,64,75,453/-.

4. While the assessment was thus completed and that assessment order attained finality, on 13.3.2023, the petitioner was visited with a notice issued under Section 29(7) of the Act. Thereby, the Additional Commissioner proposed to grant permission to the petitioner's assessing authority, to reassess the petitioner for the A.Y. 2014-15 (U.P.), in the extended period of limitation. The 'reason to believe' to reassess the petitioner was founded on the fact that the petitioner had sold 'Mentha Oil' in the course of export, against statutory 'Form I' issued under the Central Sales Tax Act 1956. Treating such sales to be exempt sales, the Assessing Authority was of the opinion that the case of escapement existed. The objections filed by the petitioner were rejected and permission was granted vide impugned order dated 18.3.2023. Consequently, the impugned notice dated 22.3.2023 was issued by the assessing authority and assessment order passed in a hurry, on 28.03.2023.

5. Submission advanced by learned counsel for the petitioner is, the claim for ITC may arise under Section 13 of the Act. If any amount is wrongly claimed, contrary to the provisions of the Act and/or of the Rules framed thereto, proceeding may be undertaken to Reverse Input Tax Credit (RITC in short), under Section 14 of the Act. That proceeding was never initiated -to RITC, Rs. 6,64,75,453/-. In fact, if required, such proceeding may have been initiated only during the course of the tax period. That having expired on 31.3.2015, there survived no jurisdiction with any authority under the Act to seek RITC, Rs. 6,64,75,453/-, thereafter. Here, such exercise being attempted almost eight years after the end of that limitation, it is described to be without jurisdiction.

6. Second, it has been submitted, reassessment proceeding could be initiated under Section 29 of the Act only in cases involving escapement of turnover. Insofar as the ITC in an issue not involving determination of the 'turnover' of sale or purchase and further inasmuch as the petitioner is not liable to tax on 'turnover of purchase', the reassessment proceeding initiated against the petitioner to RITC, is wholly without jurisdiction.

7. Further, it has been submitted, even on merits, there exists no case of the revenue. 'Mentha Oil' was not generally exempt under the Act. Merely because transactions of export of any commodity were made exempt -for reason of special nature of such transactions, here export transactions, it may never be claimed by the revenue that the goods were