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THE COMMISSIONER, TRADE TAX, U.P. LUCKNOW versus S/S AGRAWAL TRADING CO. JALAUN

High Court of Judicature at Allahabad

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The Commissioner, Trade Tax, U.P. Lucknow v. S/S Agrawal Trading Co. Jalaun - SALES/TRADE TAX REVISION DEFECTIVE No. 1355 of 1998 [2006] RD-AH 5653 (8 March 2006)

 

This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).

HIGH COURT OF JUDICATURE OF ALLAHABAD

Court no.55

TRADE TAX REVISION NO.(1355) of 1998.

AND

TRADE TAX REVISION NO.(1356) of 1998.

The Commissioner, Trade Tax, U.P., Lucknow.       Applicant

Versus

M/S Agrawal Trading Co. Jalaun.      Opp.party

...............

Hon'ble Rajes Kumar, J.

Present two revisions under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") are directed against the order of Tribunal dated 23rd May, 1998 relating to the assessment year, 1993-94 both under the U.P. Trade Tax Act and Central Sales Tax Act.

Dealer/opposite party (hereinafter referred to as "the Dealer") was involved in the business of food grain, oil-seeds etc. During the year under consideration, dealer claimed to have made purchases of tax paid food grain at Rs.6, 55,200/- from M/S Mukesh Trading Company, Jalaun and for the claim of exemption furnished Form 3-C (2). Dealer claimed to have made purchases on behalf of Ex-U.P. Principal for Rs.7, 96,567/- of Matar, food grain and oil seeds. It is claimed that after the purchases, the goods have been dispatched at the destination of Ex-U.P. Principal in the course of inter-State purchases and, therefore, such purchases were not liable to tax. Assessing authority rejected the claim of exemption against Form 3-C (2) filed in respect of the purchases made from M/S Mukesh Trading Company, Jalaun on the ground that the signature in Form 3-C (2) differs with the signature of the proprietor in the registration application. It has also been observed that the proportionate sale has not been shown by M/S Mukesh Trading Company, Jalaun and after show cause notice, books of account could not be produced. In respect of the purchases made on behalf of Ex-U.P. Principal, assessing authority rejected the claim on the ground that the dealer had made manipulation in the books of account and has shown the purchases made on its own account as the purchases made on behalf of Ex-U.P. Principal. It has also been observed that the books of account have not been produced for verification and the dispatch of goods claimed to have been made at the destination of the Ex-U.P. Principal has been treated as inter-State sales. Dealer filed two appeals before the Deputy Commissioner (Appeals) Trade Tax, Jhansi. Deputy Commissioner (Appeals), Trade Tax, Jhansi vide order dated 10th November, 1997 allowed both the appeals and remanded back the matter to the assessing authority for fresh assessment. Appellate authority observed that the books of account have not been produced before the assessing authority and the dealer has not furnished necessary details of the purchases and the dispatches. Against the order of the Deputy Commissioner (Appeals), dealer filed appeals before the Tribunal. Tribunal by the impugned order allowed the appeal under the U.P. Trade Tax Act in part and allowed the appeal under the Central Sales Tax Act. Tribunal acceted the claim of exemption in respect of purchases from M/S Mukesh Trading Company, Jalaun against Form 3-C (2) on the ground that Form 3-C (2) was not found forged and improper. It has also been held that on the basis of the information received about the said Form 3-C (2), provisional assessment was made and in appeal books of account of M/S Mukesh Trading Company, Jalaun was also examined and transaction was also verified and appeal was allowed and the claim of exemption against Form 3-C (2) was accepted. Tribunal held that the remand of the case was wholly unjustified. Tribunal also accepted the claim of the dealer with regard to the purchases made on behalf of Ex-U.P. Principal. Tribunal held that the books of account were produced before the appellate authority and the details of the purchases were furnished in which purchase order, date of sending the goods have been mentioned along with vehicle number.

Learned Standing Counsel submitted that the Tribunal has illegally allowed the claim of exemption against Form 3-C (2) in respect of the purchases made from M/S Mukesh Trading Company, Jalaun. He further submitted that without proper verification from the record and without considering the details of the purchases made on behalf of Ex-U.P. Principal, Tribunal has illegally accepted the claim of the purchases made on behalf of Ex-U.P. Principal. Learned counsel for the dealer relied upon the order of the Tribunal.

Having heard the learned counsel for the parties, I have perused the order of the Tribunal and the authorities below.

So far as claim of exemption against Form 3-C (2) in respect of the purchases from M/S Mukesh Trading Company, Jalaun is concerned, I do not find any error in the orderof the Tribunal. Assessing authority has not made out any case that the Form 3-C (2) submitted by the dealer was forged or have been obtained as a result of collusion between the parties. The finding of the Tribunal that in the appeal arising from the provisional assessment order, first appellate authority examined the books of account of M/S Mukesh Trading Company, Jalaun and the said transaction was found proper. It has also been observed that the copy of the 9 R, bill, sale register and ledger register were submitted before the appellate authority and before the assessing authority in which no defect was found. It is settled principle of law that unless the Form is found to be forged and is obtained as a result of collusion between the parties, claim of exemption against the Form cannot be refused. No such case has been made out by the assessing authority, therefore, the order of the Tribunal in this regard is upheld.

So far as acceptance of claim of purchases in the course of inter-State purchases on behalf of Ex-U.P. Principal is concerned, order of the Tribunal is erroneous and liable to be set aside. In the assessment order, assessing authority observed that no detail of purchase and dispatch of the goods were submitted and the books of account have not been produced for verification. It has been observed that the dealer had made manipulation in the books of account. First appellate authority remanded back the matter to the assessing authority for examination of the books of account. Tribunal has illegally accepted the claim of the dealer mainly on the ground that the dealer had furnished complete details of such purchases giving detail of purchase order, date of dispatch of the goods, vehicle number etc. Perusal of the order of the Tribunal shows that the books of account have not been examined. In the Tribunal order, no detail relating to the purchases, date of dispatch etc are referred and the Tribunal has made only vague observations. In the case of Commissioner of Sales Tax Versus M/S Bakhtawar Lal Kailash Chand Arhti, reported in 1992 UPTC page 971, Apex Court held that the purchases made for and on behalf of Ex-U.P. principal and the subsequent dispatch of the said goods outside the State of U.P. at the destination of Ex-U.P. Principal are in the course of inter-State purchases and are not liable to tax under the U.P. Trade Tax Act. The despatch of such goods cannot be treated as inter-State sales because dispatches are not in pursuance of prior contract of sale, but as a purchasing agent for and on behalf of Ex-U.P. Principal. Therefore, for coming to the conclusion that the purchases were made for and on behalf of Ex-U.P. Principal, it is necessary to examine whether the goods have been purchased in pursuance of any order or instruction of Ex-U.P. Principal, when the purchases were made and when the goods have been dispatched and whether purchases and dispatches were integrally connected. No such investigation has been made by any of the authorities. Therefore, remand of the case by the first appellate authority to the assessing authority appears to be correct. Tribunal has illegally interfered with the order of the first appellate authority.

In the result, both the revisions are allowed in part. Order of the Tribunal is set aside and the matter is remanded back to the assessing authority to pass assessment orders both under the U.P. Trade Tax Act and Central Sales Tax Act afresh in the light of the observations made above.

Dated.08.03.2006.

VS.


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Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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