High Court of Judicature at Allahabad
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M/S Raj Chemicals Thru' Its Proprietor Rajesh Kapoor v. The Commissioner Of Trade Tax, U.P. Lucknow - SALES/TRADE TAX REVISION No. 55 of 2006  RD-AH 2820 (7 February 2006)
TRADE TAX REVISION NO.55 OF 2006
M/S Raj Chemicals, Agra. ....Applicant
The Commissioner, 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 15.10.2005 for the assessment year 1999-2000.
Applicant was involved in the manufacturing of Adhesives. Rubber and solvent are raw material in the manufacturing of adhesive. Admittedly, applicant had two bank accounts in its name at Allahabad Bank, Hing Ki Mandi, Agra and Allahabad Bank, Main Branch, Jaipur. It appears that income tax department made an enquiry of the aforesaid two bank accounts, which was standing in the name of the applicant. On enquiry, it was found that the entries in the said bank accounts relates to the transactions with M/s Yash Organics Limited, Ahmedabad. It appears that as a follow up action, enquiry was made from M/s Yash Organics Limited, Ahmedabad. M/s Yash Organics Limited, Ahmedabad informed that they had sold 59 tankers solvent to the applicant, M/s Raj Chemicals, 9/654, Moti Katra Road, Agra. Thereafter, income tax department has sent the information to the Trade Tax department about the aforesaid two banks accounts and about the sale of 59 tankers solvent by M/s Yash Organics Limited, Ahmedabad to the applicant. During the course of assessment proceedings, applicant submitted that the aforesaid two banks accounts belonged to M/s Yash Organics Limited, Ahmedabad and they did not relates to any transactions of purchase and sales of the applicant. Applicant had also denied to have purchased the alleged 59 tankers solvent from M/s Yash Organics Limited, Ahmedabad. Assessing authority, had not accepted the plea of the applicant and made assessment on the basis of the entries of the two bank accounts and treated the purchases of alleged 59 tankers of solvent as suppressed purchases. Applicant filed appeal before the Deputy Commissioner (Appeals). The aforesaid appeal was allowed vide order dated 18.10.2002 and the matter was remanded back to the assessing authority. First appellate authority held that the opportunity of the cross examination to the M/s Yash Organics Limited, Ahmedabad should be given to the applicant. The direction was also given to make enquiry about the payment and also to make enquiry with regard to the various pleas of the applicant. In pursuance thereof in the remand proceeding notice was issued to M/s Yash Organics Limited, Ahmedabad to appear alongwith books of account and documents. It appears that one Sri M.N.Vyas, Advocate, authorised representative appeared before the assessing authority and filed 59 photocopies of the excise invoices through which 59 tankers of solvent, claimed to have been sold by M/s Yash Organics Limited, Ahmedabad. It was also admitted that 59 tankers of solvent were sold by M/s Yash Organics Limited, Ahmedabad to the applicant. The details of the tanker number, excise invoice number, date of despatch, time etc. have been furnished. Sri Vyas stated that payments were made against 14 drafts, which was found to have been prepared from Allahabad Bank, Main Branch, Jaipur, which was in the name of the applicant. When the applicant has been asked to cross-examine Sri M.N.Vyas, Sri Anand Sharma Advocate, of the applicant refused to cross-examine Sri M.N.Vyas and insisted for the opportunity to cross-examine the director of the company. Assessing authority had rejected the claim that the aforesaid two bank accounts relates to M/s Yash Organics Limited, Ahmedabad and on the basis of the material on record held that the applicant had purchased 59 tankers of solvent from M/s Yash Organics Limited, Ahmedabad, which were not disclosed in the books of account and accordingly, turn over was estimated. First appeal filed by the applicant was rejected. Applicant filed second appeal before Tribunal. Tribunal by the impugned order remanded back the case to the assessing authority for further enquiry. Before the Tribunal, applicant pleaded that only photocopies of the invoice were produced and the original copy of the invoice were not produced and the books of account have also not been produced. It has also been submitted that the opportunity of cross-examination to the director of the company was not afforded and the person, who appeared namely, Shri M.N.Vyas was not holding proper power of attorney. It appears that plea of the applicant has been partly allowed by the Tribunal and the Tribunal by the impugned order remanded back the matter to the assessing authority for further enquiry. Tribunal, however, held that it is not necessary that the director of the company should appear for the cross-examination. The authorised representative can also be produced for cross-examination.
Heard learned counsel for the parties.
Learned counsel for the applicant submitted that the remand of the case is unjustified. I do not find any substance in the argument of learned counsel for the applicant. The claim of the applicant that the proper enquiry was not made by the assessing authority and the opportunity of the cross-examination had not been given, has been accepted by the Tribunal. Thus, the claim of the applicant that the remand of the case is unjustified, is misconceived. Admittedly two banks accounts at Allahabad Branch, Hing Ki Mandi, Agra and Allahabad Bank, Main Branch, Jaipur were in the name of the applicant. Thus, burden lies upon the applicant to prove the entries of such bank accounts. If the applicant claims that entries did not relate to its business, burden lies upon it to prove and in the absence of proper evidence, they are deemed to relates to the applicant. It was claimed that for the purchase of 59 tankers of solvent, 14 drafts were prepared from such bank accounts. Thus, the burden lies upon the applicant to prove that 14 drafts were prepared not for making the payment to M/s Yash Organics Limited, Ahmedabad but for any other purpose. So far as the documents produced by M/s Yash Organics Limited, Ahmedabad for the sale of 59 tankers of solvent is concerned, namely excise invoice etc., assessing authority should ask M/s Yash Organics Limited, Ahmedabad to produce the original copy of the invoices and for the verification of same excise invoices, necessary enquiry can be made from excise authorities also. So far as opportunity of the cross-examination is concerned, it is not necessary that the director of company can only be cross-examined. Any authorised representative of the director can also be cross-examined. The entire case has to be looked into in a manner that there is no dispute that the applicant had a relation with M/s Yash Organics Limited, Ahmedabad and the two bank accounts are in the name of applicant, hence burden lies upon the applicant to prove the entries of such bank accounts.
With the aforesaid observation, revision stands dismissed.
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