Allahabad High Court
M/S Gupta Trading Company 324 Vijay ... vs Commissioner Commercial Tax U.P.Gomti ... on 25 September, 2014
Author: B. Amit Sthalekar
Bench: B. Amit Sthalekar
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH ?Court No. - 21 AFR Case :- TRADE TAX REVISION DEFECTIVE No. - 104 of 2014 Applicant :- M/S Gupta Trading Company 324 Vijay Nagar Barabanki Opposite Party :- Commissioner Commercial Tax U.P.Gomti Nagar Lucknow Counsel for Applicant :- Naresh Chandra Mishra,Chandra Has Misra,Ramesh Chandra Mishra Hon'ble B. Amit Sthalekar,J.
This revision has been filed under Section 11 of the U.P. Trade Tax Act, 1948 for the assessment of tax (central) for the year 2007-08 against the order of the Commercial Tax Tribunal Lucknow dated 5.6.2014.
Briefly stated the facts of the case are that the revisionist is a registered dealer under the Central Sales Tax Act and in respect of supply of menthol the assessing authority on the basis of best judgment assessment rejecting the claim of cancellation of order for supply of menthol amounting to Rs.15,00 ,000/- and determined the additional turn over of mentha oil as Rs. 15,00,000/- each and imposed tax at 10%. This revision has been filed with regard to the menthol and therefore the Court is not concerned with mentha oil. So far as the menthol is concerned the goods amounting to Rs. 15,00,000/- without Form C out of total valuation of menthol of Rs.30,00,000/- was treated as inter State sale, therefore, the remaining amount of Rs.15,00,000/- of menthol was treated as Central sale. The assessing authority while treating the portion of the value of the goods as Rs.15,00,000/- as inter State sale disallowed the claim of the revisionist that the said consignment was returned back by M/s G.K. Burman Herbal INdia Pvt. Ltd., Haridwar (M/s G.K. Burman) weighing 2,500 kg. menthol.
Heard Shri Naresh Chandra Mishra, learned counsel for the revisionist and Shri Sanjeev Shankdhar, learned counsel for the State Revenue.
The admitted position is that against this finding of the assessing authority, the respondent-Revenue did not file any appeal before the appellate authority and therefore this finding became final. The revisionist however, aggrieved by the finding recorded by the assessing authority disallowing the turn over in respect of 2,500 kg. menthol amounting to Rs. 15,00,000/- and treating the same to be an inter State sale filed appeal before the Addl. Commissioner (Appeals). The appellate authority accepted the finding of the assessing authority. Aggrieved by the order of the Addl. Commissioner (Appeals), the revisionist filed appeal before the Commercial Tax Tribunal. The Tribunal in the impugned order at internal page 7 and 8 has recorded the submission of the counsel for the revisionist that 2,500 kg. of menthol under bill no. 7 dated 18.10.2007 was sold but the consignment was seized by the mobile squad and therefore there was delay in the consignment reaching M/S G.K. Burman and as such the transaction itself was cancelled. The Tribunal on the basis of the documents on record thereafter recorded a finding that from examination of the records of M/s G.K. Burman it was found from their stock books that the order had been cancelled due to delay. Having accepted this finding the Tribunal thereafter assessed the unaccounted value of menthol not covered by Form C at Rs. 25,00,000/- towards central sale. Where from this valuation of Rs.25,00,000/- has been arrived at has not been mentioned by the Tribunal in its order. There is no discussion on this point at all nor has any material or documentary evidence been referred to and therefore treating the menthol valued at Rs. 25,00,000/- as unaccounted for evaded turn over, tax at 10% amounting to Rs. 2,50,000/- has been imposed.
So far as the factual position is concerned, the same is not disputed by Shri Sanjeev Shankdhar also from the reading of the order of Tribunal. However, the learned counsel for the respondent-Revenue submitted that since there was no foundation for this finding, the matter ought to have been remitted by the Tribunal to the assessing authority for redetermination.
In my opinion once the assessing authority had treated the turnover of menthol relating to 2500 kg. valued at Rs. 15,00,000/- as inter State sale and according to the revisionist since the consignment was never accepted by M/s G.K. Burman and was returned, which fact was accepted by the Tribunal also therefore that finding had become final.
The admitted turnover of menthol was Rs. 30,00,000/- out of which menthol to the value of Rs. 15,00,000/- was never accepted by M/s G.K. Burman and was returned which was treated as inter State sale by the assessing officer. This finding of the assessing officer was accepted by the appellate authority but in second appeal before the Tribunal the Tribunal accepted the case of the revisionist that this transaction had been cancelled by M/s G.K. Burman.
Shri N.C. Mishra, learned counsel for the revisionist however submitted that the Tribunal had no jurisdiction to enhance the value of the turnover if this issue has never been raised before the authorities below by the Revenue and the findings recorded by the said authorities had been allowed to become final. He has relied upon the following judgments:
M/s Allen Roller Four Mills, Bareilly Vs. Commissioner of Trade Tax 1999 U.P.T.C. 857 (Allahabad). Relevant paragraphs 4 and 5 of the said judgment read as under:
"4. The brief contention of the dealer is that its consignment sales to the extent of Rs. 5,65,34,586.84 P. had been accepted by the assessing officer in respect of which the department did not take any action under Section 10-D etc. and the dealer's first appeal as well as the second appeal were restricted to the sum of Rs.3,33,110/- only and the assessment order accepting the consignment sales had, thus, become final. It is contended that in such a situation when there was no appeal by the department and the dealer's appeal was restricted to the sum of Rs.3,33,110/- only, the Tribunal had no jurisdiction to set aside the entire assessment and reopen the matter relating to the turnover of Rs.5,65,34,586.84 P. Reliance is placed on a judgment of this Court in G.D. Steels and Gases Pvt. Ltd. v. Commissioner of Trade Tax, U.P., 1999 U.P.T.C. 35 in which it was held that part of the assessment order that has become final, cannot be challenged by the Commissioner in second appeal. In Har Prasad v. C.S.T., 1995 U.P.T.C. 215, it has been held by this Court that the Tribunal has no general power of enhancement and it can exercise the power of enhancement on the Commissioner's appeal if the matter was in dispute before the first appellate authority. Thus, the Tribunal's jurisdiction while dealing with the aforesaid appeal of the dealer, was restricted to the sum of Rs. 3,33,110/- only and it could not have set aside the assessment order with regard to the turnover of Rs.5,65,34,586.84 P. and ordered a reinvestigation.
5. Learned Standing Counsel who placed reliance on the provisions of sub-section (5) of Section 10 could not place any authority in support of the action of the Tribunal. The aforesaid provision has been considered by this Court in the aforesaid two judgments holding that the same does not confer jurisdiction on the Tribunal to order an enhancement on the assessee's appeal or on a second appeal by the when the matter was not in dispute before the first appellate authority. Therefore, the Tribunal's order is without jurisdiction and deserves to be set aside."
M/s D.R. Chemicals and Fertilizer, Gorakhpur Vs. Commissioner of Sales Tax 2001 U.P.T.C. 180 (Allahabad) by Hon'ble R.K. Agarwal, J (as His Lordship then was). Relevant paragraphs 3 and 4 of the said judgment read as under:
"Feeling aggrieved by the order passed by the Assistant Commissioner (Judicial) on 11th October, 1982, the Commissioner of sales Tax, U.P. Lucknow filed an appeal under Section 10 of the Act before the Tribunal. In the grounds of appeal the Commissioner of Sales Tax did not raise any grievance regarding charging and calculation of interest by the Assistant Commissioner (Judicial). The Commissioner was aggrieved only against the rejection of taxable turnover, as would be clear from the grounds of appeal filed as Annexure-3 to the revision. The Sales Tax Tribunal vide order dated 14th September, 1990 had upheld the order of the Assistant Commissioner (judicial) in so far as the acceptance of the books of accounts and the disclosed turnover of the applicant at Rs. 5,18,962 and the tax liability of Rs. 2,06,689.17. However, it had held that the applicant is liable to pay interest under Section 8(1) of the Act on the amount of tax admitted by it in the return.
4. As already mentioned above the Commissioner of sales Tax did not raise any grievance in the memo of appeal regarding charging and calculation of interest by the Assistant Commissioner (Judicial). The Tribunal had not permitted any additional ground to be raised and no additional ground was taken by the Commissioner of Sales Tax at the time of hearing of the appeal. Thus, the Tribunal was not justified in adjudicating upon the question of calculation of the interest by the Assistant Commissioner (Judicial) in the absence of any grievance to that effect being made by the Commissioner of Sales Tax. "
M/s Devi Prasad Sunder Lal Khattri, Kannauj, Farrukhabad Vs. Commissioner of Sales Tax U.P. 1987 U.P.T.C. 787 (Allahabad). Relevant paragraph 3 of the said judgment reads as under:
"3. From perusal of the order of the Assistant Commissoner (Judicial) it appears that he clearly stated that the purchases had been made by the assessee from unregistered commission agents, who gave the details of the commission charged by them separately in the bills. No observation was made by the Assistant Commissioner (Judicial) that any purchase was made from an agriculturist. The Tribunal for the first time recorded a finding that some of the purchases were made from petty agriculturists. It shows that the Tribunal has culled out absolutely a new case, which was not set up to the level of the Assistant Commissioner (Judicial) by the Department even. I, therefore, hold that the Tribunal was not justified in holding that some of the purchases were made by the assessee from the small agriculturists, who were not dealers within the meaning of the proviso to sub-clause (vi) of Section 2(c) of the Act, 1948."
Thus from a perusal of the order of the Tribunal what emerges is that the Tribunal had arrived at a wholly new finding of fact which has absolutely no foundation and therefore the Tribunal was clearly in error in treating the value of evaded/unaccounted turn over at Rs.25,00,000/-. The order of the Tribunal is wholly illegal and without jurisdiction and is accordingly quashed.
The revision stands allowed.
Order Date :- 25.9.2014 o.k.