High Court of Judicature at Allahabad
Case Law Search
M/S Aga Chemicals, Sambhal v. The Commissioner Of Trade Tax U.P., At Lko. - SALES/TRADE TAX REVISION DEFECTIVE No. 205 of 2000  RD-AH 21101 (14 December 2006)
TRADE TAX REVISION NO.(205) OF 2000
M/s AGA Chemicals, Khaggu Sarai, Sambhal,
Through its Partner Shri Mohd. Aslam. ....Applicant
The Commissioner, of Trade Tax, U.P., Lucknow. ...Opp. Party
Hon'ble Rajes Kumar, J.
Present revision under section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") is directed against the order of Tribunal dated 12.06.2000 relating to the assessment year 1990-91.
Applicant was engaged in the business of manufacture and sale of menthol. Menthol is one of the raw material which the applicant purchased from the farmers. Applicant was holding recognition certificate under section 4-B of the Act and was entitled to purchase raw material without any tax. This fact is not in dispute. Applicant was found suppressing the purchase of mentha oil and on the basis of the material available on record books of account was rejected. Assessing authority had enhanced the turn over of manufactured menthol and self manufactured DMO. Assessing authority had also estimated the turn over of mentha oil on the ground that the dealer was involved in the trading business of mentha oil. Being aggrieved by the order, applicant filed appeal before the Deputy Commissioner (Appeals). Deputy Commissioner (Appeals) held that there was no material that the dealer was involved in the trading business of mentha oil and accordingly, deleted the tax on the turn over of purchase of mentha oil and estimated the turn over of self-manufactured menthol and DMO at Rs.2 lacs and Rs.40,000/- respectively. Commissioner of Trade Tax filed appeal before the Tribunal. Tribunal held that the dealer was found suppressing the turn over of mentha oil and accordingly estimated the turn over of evaded purchases of mentha oil at Rs.2 lacs.
Heard learned counsel for the parties.
Learned counsel for the applicant submitted that there is no material on record to show that the applicant was involved in trading business of mentha oil and, therefore, first appellate authority has rightly deleted the tax. He submitted that the Tribunal has also not referred any material to show that the applicant was involved in trading business of mentha oil. He further submitted that the Tribunal has estimated the evaded purchases of mentha oil at Rs.2 lacs and levied the tax on such evaded purchases of mentha oil, which is wholly illegal. He s ubmitted that the applicant being recognition certificate holder was not liable to tax on the purchases of mentha oil. Learned Standing Counsel relied upon the order of the Tribunal.
I have given my anxious considerations to the submission of learned counsel for the parties and I have perused the order of Tribunal and the authorities below.
There appears to be no material on record to show that the applicant was carrying on the trading business of mentha oil. Tribunal has levied the tax on the evaded purchases of mentha oil, which is wholly unjustified and illegal. Applicant is admittedly holder of recognition certificate thus, its purchases of raw material were not liable to tax. Mentha oil was one of the raw material and, therefore, the purchase of mentha oil was not liable to tax in the hand of the applicant being recognition certificate holder. In the circumstances, levy of tax on the evaded purchases of mentha oil at Rs.2 lacs is not justified and liable to be set aside.
In the result, revision is allowed in part. Order of the Tribunal is set aside to the extent levying the tax on the evaded purchase of mentha oil estimated at Rs.2 lacs. Tribunal is directed to pass appropriate orders under section 11 (8) of the Act.
Double Click on any word for its dictionary meaning or to get reference material on it.