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M/S Modi Spinning & Weaving Mills Co. Ltd. v. The Commissioner Of Trade Tax - SALES/TRADE TAX REVISION No. - 651 of 2002  RD-AH 16299 (4 October 2007)
HIGH COURT OF JUDICATURE AT ALLAHABAD
TRADE TAX REVISION NO. 651 of 2002.
M/S Modi Spinning and Weaving Mills, Ghaziabad. 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 22nd June, 2002 relating to the assessment year, 1970-1971 under the Central Sales Tax Act (hereinafter referred to as "Central Act").
Applicant was engaged in the business of manufacture and sales of cotton yarn etc and claimed to had a depot at Delhi. It was claimed that during the year under consideration, yarn worth Rs.1, 65, 04, 387/- had been transferred to Delhi Depot by way of stock transfers. Assessing authority rejected the claim of stock transfers and treated the movement of goods to Delhi Depot as inter-state sales. It appears that the matter went to the Tribunal. Similar dispute also arose in the assessment year1969-70. In the assessment year, 1969-70, assessing authority rejected the claim of stock transfer, but the same was accepted by the first appellate authority and confirmed by the Tribunal. Commissioner of Trade Tax filed revision before this Court. This Court vide order dated 18th July, 1989 set aside the order of the Tribunal and remanded back the case to the Tribunal to decide the appeal afresh. Revision filed by the applicant before this Court is reported in 1989 UPTC, 1214, Commissioner of Sales Tax Versus S/S Modi Spinning & Weaving Mills. The Tribunal for the assessment year, 1970-71 has remanded back the matter to the assessing officer to examine the case of stock transfer in the light of the observations made by this Court in the assessment year, 1969-70. In pursuance thereof, assessing authority examined the claim of the applicant relating to stock transfers. Before the assessing authority, applicant has not produced the entire stock transfer memos, builties and sale invoices raised from Delhi Depot, but some of the copies of the stock transfer memos and the sale invoices raised from Delhi were produced. Copies of the agreement in case of some of the purchasers also came to the notice of the assessing authority. It was found that some of the parties of Delhi had entered into an agreement with the applicant for the purchases of yarn. Assessing authority vide assessment order dated 11.10.1993 rejected the claim of stock transfer . Assessing authority observed that in the copies of the stock transfer memos, same order numbers were mentioned which were mentioned in the sale invoices raised by the Delhi Depot. On these fact, it has been held that the movements of goods from Modinagar to Delhi were in pursuance of prior contract of sale and it was known that to whom the goods were to be delivered. Upon this fact, claim of stock transfers to Delhi Depot were rejected and the same have been treated as inter-State sales. Aggrieved by the order of the assessing authority, applicant filed appeal before the Deputy Commissioner (Appeals), Trade Tax, Ghaziabad. Deputy Commissioner (Appeals), Trade Tax, Ghaziabad vide order dated 08.03.1995 dismissed the appeal. It appears that before the Deputy Commissioner (Appeals), Trade Tax, Ghaziabad, applicant placed some of the copies of the indent and submitted that in the stock transfer memos, in fact, indent number was mentioned. First appellate authority refused to rely upon such indent on the ground that they were subsequently prepared. Being aggrieved by the order of Deputy Commissioner (Appeals), Trade Tax, Ghaziabad, applicant filed second appeal before the Tribunal. Tribunal by the impugned order dismissed the appeal. Tribunal held that the applicant had not produced any books of account relating to the stock transfers. Copies of all the agreements have also not been produced. Tribunal has also referred that in the stock transfer memos some code name of the purchasers were also mentioned. Tribunal has also refused to rely upon the copies of the indent produced before the first appellate authority. Tribunal also held that the applicant is not able to prove that the movement of goods were to the Delhi Depot and not in pursuance of prior contract of sale.
Heard Sri Suyash Agrawal, learned counsel for the applicant and Sri B.K. Pandey, learned Standing Counsel.
Learned counsel for the applicant submitted that Section 6-A of the Central Act has been introduced with effect from 01.04.1972 and, therefore, it was not applicable in the assessment year, 1970-71. He submitted that since Section 6-A of the Central Act was not in the Act which has placed burden on the assessee to prove that the movement of goods was otherwise than in the course of inter-State sales. The burden lies upon the revenue to prove that the movement of goods were in pursuance of prior contract of sale which the revenue failed to prove. He further submitted that the alleged discrepancies were found in respect of some of the transactions only and on the basis of such discrepancies all the stock transfers could not be rejected. Learned Standing Counsel 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.
I do not find any substance in the argument of the learned counsel for the applicant.
It was the case of the applicant that the goods were dispatched from Modinagar to Delhi Depot to its own branch by way of stock transfers and they were not in pursuance of prior contract of sales. Since, it was the claim of the applicant that the movements of goods were by way of stock transfers and not in pursuance of any contract of sale, initial burden lies upon the dealer to prove its case even in the absence of Section 6-A of the Central Act. Complete books of account and the documents relating to the stock transfers to Delhi Depot have not been produced before the assessing authority. Assessing authority recorded a categorical finding that all the stock transfer memos, sale invoices raised by the Delhi Depot and the books of account maintained at Delhi Depot have not been produced. To the contrary, the assessing authority noticed that there were agreements between the applicant and the Delhi parties to whom the goods were sold and in the stock transfer memos and the sale invoices raised from the Delhi Depot same agreement numbers were mentioned. It clearly establishes that the movement of goods from Modinagar were in pursuance of prior contract of sales and at the time of movement of goods, it was know to whom the goods were being delivered. In the absence of complete documents, the authorities below have rightly drawn adverse inference against the applicant. There appears to be no reason why the documents relating to the stock transfers have been withhold by the applicant which were necessary for determination of the nature of transactions. On query being made by the Court whether such stock transfer to Delhi Depot has been subjected to assessment under the Delhi Commercial Tax Act, no reply has been given.
In view of the above, there is no reason to interfere with the findings recorded by the Tribunal, which is based on the material on record.
In the result, revision fails and is, accordingly, dismissed.
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