Allahabad High Court
Bajaj Hindusthan Sugar Ltd. Throu.Its ... vs Commissioner, Commercial Tax ... on 26 February, 2020
Author: Alok Mathur
Bench: Alok Mathur
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH Court No. - 26 Case :- TRADE TAX REVISION No. - 4 of 2020 Revisionist :- Bajaj Hindusthan Sugar Ltd. Throu.Its Authorized Repres. Opposite Party :- Commissioner, Commercial Tax U.P.Lucknow And Ors. Counsel for Revisionist :- Manish Singh Counsel for Opposite Party :- C.S.C. Hon'ble Alok Mathur,J.
1. Heard Mr. Manish Singh, learned counsel for the revisionist as well as Mr. Rohit Nandan Shukla, learned counsel appearing on behalf of the revenue.
2. By means of the present revision the revisionist has assailed the order dated 14.08.2018 passed by the Commercial Tax Tribunal, Lucknow as well as the order rejecting the application for rectification preferred by the revisionist on 25.10.2019. The controversy involved in the present case which falls for consideration of this Courts, as to whether the respondents have failed to establish the liability of payment of entry tax from the dealer/purchaser and without proper consideration of the aforesaid facts the same can be fastened on the manufacturer for that very transaction.
3. The following questions of law arises for termination in the instant revision:-
"(1) Whether the Learned Tribunal acted within the four corners of law in adjudicating the appeal on the basis of wrong appreciation of facts and without any lawful reasoning that too when the alleged sale to the buyer at Delhi has been accepted by the Department as interstate sale and has been upheld by this Hon'ble Court, and yet in the case of the revisionist the penalty has been imposed treating the sale to be within Uttar Pradesh?
(2) Whether the learned Tribunal misdirected itself by taking an extraneous view that the sales were not appearing in the books of revisionist, which was never a case of Assessing Officer, and the books of the revisionist were already accepted and Final Assessment order for the year 2010-11 has already been passed before the penalty order?"
4. It has been submitted by the learned counsel for the revisionist that revisionist is a Public Limited Company, having its registered office at Golagokaran Nath, District Lakhimpur U.P. and Corporate Office at Bajaj Hindustan Sugar Ltd. Vibhuti Khand, Gomti Nagar, Lucknow. The revisionist is having a sugar manufacturing Units at Maqsudpur in District Shahjahanpur and Palia in District Lakhimpur Kheri, besides other units in the State of U.P.. It has been submitted that revisionist has sold sugar to a dealer who is registered in New Delhi namely M/s Shudhodhak Enterprises. Prior to the said sale it has been stated that particulars of the dealer were verified and ascertained that he was a registered dealer in Delhi and doing their business. The VAT registration certificate, copy of the PAN card, cancelled cheque and another details of the dealer were kept as record and only after verifying the same transaction was done.
5. The Assessing Authority, while examining the aforesaid transaction took a view that the said transaction, though on the face, it seems to be an interstate sale, but on close examination of various documents and from details of purchase i.e. M/s Shudhodhak Enterprises where it was found that there was no office in existence at the place where its registered office was suppose to be, took a view that the transaction was an intrastate sale while the assessee has shown the transaction to have been carried out outside State of U.P.. He was also of the view that goods sold by the revisionist in fact never crossed the boundaries of the State and also the fact that the consideration for the aforesaid sale was deposited in the HDFC Bank at Bareilly. Taking the aforesaid fact into consideration the addition was made for the assessment order treating the said transaction to be a intrastate sale and thereby levying entry tax and penalty on the aforesaid transaction.
6. Aggrieved by the aforesaid order, the revisionist preferred a first appeal before the Additional Commissioner, Grade-II (Appeal) IV, Commercial Tax, Lucknow. The First Appellate Authority also reiterated and endorsed the findings recorded by the Assessing Authority that purchaser Firm did not have any existence at the place at which it was shown and also the fact that the sale consideration for the aforesaid transaction ultimately found its way to the Bank Account in Bareilly, and therefore, he rejected the First Appeal supporting the order passed by the Assessing Authority.
7. Learned counsel for the revisionist has drawn the attention of this Court to the order of the First Appellate Authority, wherein it was pointed out that the purchaser i.e. M/s Sudhok Enterprises was also assessed for the same transaction for entry tax under Section 9 of the said Act. The said purchaser had preferred a First Appeal before the Additional Commissioner, Grade-II (Appeals)-I, Commercial Tax, Bareilly, who by means of order dated 30.05.2013 has accepted the appeal and deleted entry tax imposed upon him.
8. It has further been submitted that the said order passed by the First Appellate Authority was challenged before the Commercial Tax Tribunal which also gave a verdict in favour of the purchaser and subsequently it challenged before this High Court, which was dismissed by means of order dated 27.10.2014 passed in Sale/TTR No. 489 of 2014 in the case of The Commissioner, Commercial Tax Vs. M/s Shudhodhak Enterprises.
9. Mr. Manish Singh, learned counsel for the revisionist has submitted that after consideration of the entire material it has been found that the said transaction was interstate sale on which no entry tax could be leviable and therefore favourable judicial findings were recorded in favour of the purchaser. He has submitted that for the same transaction the revisionist has been made liable for the entry tax which is arbitrary and impermissible under law. He has further submitted that despite placing the aforesaid judicial orders before the Commercial Tax, Lucknow with regard to the purchaser (Ms. Shudhodhak Enterprises), the Commercial Tax Tribunal choose to ignore the same and return the finding infavour of the Revenue and therefore the said order is perverse and arbitrary and liable to be set-aside.
10. Mr. Rohit Nandan Shukla, learned counsel for the revenue, on the other hand supports the the order passed by the various authorities levying entry tax upon the revisionist, he submits that in examination of the facts of the case as considered by the assessing authority would clearly indicate that the purchaser was not found present at the place of his registered business and even the consideration for the said transaction found its way within the State of Bareilly and therefore considering the aforesaid facts the assessing authority had rightly concluded that the transaction was an intrastate sale, on which entry tax could be levied and no fault can be found with any of the order passed by the authorities under the Act.
11. I have heard the learned counsel for the parties and perused the record.
12. The revisionist who is a manufacturer of sugar had entered into the transaction for sale of sugar and M/s Shudhodhak Enterprises which was at that relevant point of time registered in Delhi. The assessing authority conducted a survey and the purchaser M/s Shudhodhak Enterprises was not found to be existing at the place in Delhi, where its registered office has shown to be. After going through the books of account and other material it was discovered that the consideration paid by the assessee to the purchaser found its way to the Banks in Bareilly and on the basis of the aforesaid facts he concluded that the sale of the sugar by the assessee was infact intrastate sale and not a interstate sale which was validly subject to the entry tax. The said transaction was shown to be interstate sale only with a view to avoid taxation in the State of U.P. and therefore imposed entry tax on the said transaction and levied penalty on the fact that the said transaction was deliberately and wrongly recorded as interstate sale.
13. The purchaser M/s Shudhodhak Enterprises on the other hand was also assessed to entry tax where the revenue authorities concluded that the said transaction culminated within the State and therefore entry tax was levied upon him on 11.04.2013. The said order was challenged by the First Appellate Authority i.e. Additional, Commissioner, Grade-I, Appeals, Commercial Tax, Bareilly by filing a First Appeal No. 450 of 2013, which was allowed on 30.05.2013. Whereby it was determined by the First Appellate Authority that the said transaction was infact interstate sale on which no entry tax was leviable under the Act.
14. The revenue being aggrieved by the order of the First Appellate Authority preferred second appeal before the Commercial Tax Tribunal, which was decided in favour of the purchaser M/s Shudhodhak Enterprises and subsequently revision was preferred before this Court, which was dismissed by means of order dated 27.10.2014 in Sales/ Trade Tax Revision No. 489 of 2014. A perusal of the aforesaid facts clearly indicates that sale transaction has been held to be an interstate sale and after the dismissal of the revision by this Court in Sale/TTR No. 489 of 2014, this issue was no longer remains resintegra having been finally determined. The order of this Court dated 27.10.2014 attained finality as no appeal was preferred before the Apex Court and therefore, it can safely be concluded that the issue as to whether the transaction was an intrastate sale or interstate sale is no longer open for the determination. For the same transaction by means of the impugned order the Tribunal has upheld the findings recorded by the Assessing Authority without taking into consideration the fate of the transaction and the orders passed with regard to the M/s Shudhodhak Enterprises and therefore the Tribunal has committed manifest error in recording finding in favour of the revenue.
15. The First Appellate Authority in its order dated 30.05.2013 has taken into consideration that M/s Shudhodhak Enterprises who was also brought under the ambit of the Entry Tax Act and therefore sought to be taxed for the same and the First Appellate Authority had passed the order in their favour and deleted the imposition of tax. This fact was relevant and material for being considered by the Commercial Tax Tribunal and having not considered this relevant fact they have committed manifest error, as the tax liability of the transaction was already ascertained by the authority under the Act. This fact was also brought on record and duly discussed in the order passed by the First Appellate Authority in the present case.
16. In light of the aforesaid discussion, the said transaction having been held to be an interstate sale was not liable for being brought under the Entry Tax Act. The proceedings in this regard has attained finality by means of the judgment of this Court in Sale/TTR No. 489 of 2014 decided on 27.10.2014 a different view cannot be taken with regard to the revisionist who are the seller for the same transaction.
17. In light of the above, the order dated 14.08.2018 passed by the Commercial Tax Tribunal, Lucknow in Second Appeal No. 5 of 2014 is set-aside and the relevant questions are answered accordingly.
18. Accordingly, the revision stands allowed.
Order Date :- 26.2.2020 A.K. Singh (Alok Mathur, J.)