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M/S Twinkle Lamp Industries Pvt. Ltd. v. Cutom, Excise & Service Tax Appellate Tribunal & Others - WRIT TAX No. 70 of 2007 [2007] RD-AH 2736 (20 February 2007)


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Court No. 30


M/s Tanya Automobiles Limited- Applicant


The Commissioner, Trade Tax U.P.

Lucknow Opposite party


Hon'ble Sunil Ambwani, J.

Heard Shri M.K. Gupta, learned counsel for applicant. Shri B.K. Pandey appears for the department.

The assessee is a dealer of Maruti cars and spare parts. For the assessment year 2000-01, he declared sale of Rs. 36,37,25,241.42, which included sale of 1445 cars including Maruti, Omni, Zen, Esteem, Gypsy and Balnok.

The assessee challenged the assessment order dated 25.1.2002 passed ex parte against him by making an application under Section 30 of the U.P. Trade Tax Act, which was allowed on 9.5.2002. The assessee did not appear on the date of hearing on which a second ex parte order was passed on 25.10.2002. Once again assessee filed an application under Section 30 of the Act, which was allowed on 27.2.2003 and the matter was decided on 2.6.2003. The assessee filed an appeal which was allowed and the matter was remanded. Once again he failed to appear and an ex parte assessment order was passed on 7.2.2003 against which he again filed application under Section 30, which was allowed. On the fifth occasion, the assessee again did not appear  and that fifth ex parte assessment order was passed on 16.1.2004. The assessee filed an application under Section 30, which was rejected. A first appeal against the order was allowed on 17.6.2004 and the matter was remanded for re-hearing.

The assessing authority has observed in his order that the assessee did not produce the accounts book maintained by him in regular course of business and handed proceedings and as such his turn over could not be verified. His show room was inspected on 31.8.2000 and some documents were  seized. These documents, however, related to the purchase of old cars under the exchange scheme. The assessing authority as such requested Maruti Udyog Ltd for furnishing the detail information of dispatch of cars to the assessee. M/s Maruti Udyog Ltd, Gurgaon informed the assessing authority that 1653 cars were dispatched to the assessee for sale. The Deputy Commissioner, Trade Tax resorted the best judgment assessment and found   turn over of assessee at Rs. 40,90,00,000/-. The tax for the period upto 8.3.2000 was assessed at 5% and thereafter upto 31.3.2001 at the increased notified rate of 12%.

In appeal the Joint Commissioner (Appeal) IInd recorded the finding that the assessee did not produce account books either before the assessing authority or in appeal to verify turn over disclosed by him. There was no error in the best judgment assessment. The appeal was dismissed on 19.12.20905.

The Tribunal has dismissed the second appeal No. 23 of 2006 (assessment year 2000-01) on the ground that Director of the firm has only produced the cash book and sale register of March 2001. He did not produce the remaining accounts books. He also failed to produce accounts book before the Tribunal and filed photocopies of the bills and enquiry register seized from his Bijnor office. The Tribunal found that the assessing authority did not commit any error in rejecting the accounts books and making orders of best judgment in considering the submissions on the turn over on the best judgment assessment. The Tribunal found that Maruti Udyog Ltd had verified the sale of 1653 vehicles out of which the assessee has accepted the purchase of only 1475 vehicles and has suppressed the sale of 178 vehicles  with difference of Rs. 4, 21, 03, 434/-. The assessee could not give any satisfactory answer of the sale of 178 vehicles sold to him by the Maruti Udyog Ltd. His explanation, that these cars may have been sold by the willing customers directly, was not accepted by the appellate court. The Tribunal did not interfere with the turn over of the spare parts. It, however, reduced the suppressed turn over of Rs. 4, 22, 51, 129/- and give benefit of Rs. 21, 31, 371/- for imposition of tax on the ground that the reduction of sale price at 7% must have been reduced to the customers to purchase the cars upto 30.4.2000 and that some of cars had crossed the barrier in the night of 30.4.2000 at 11.30 PM and in  few cases the drafts were received by the assessee on 4.5.2000.

Shri M.K. Gupta, learned counsel for assessee submits that firm had produced the account books before the assessing authority verifying the turn over and as such the assessing authority erred in law in proceedings with the best judgment assessment. The information received from the Maruti Udyog Ltd could not be the basis for making the best judgment assessment unless the sale of cars was established by the department. He submits that many time the company directly billed the customers and some of the car was not sold in the relevant assessment year.

Ordinarily it is not possible for any car dealers having turn over of more than Rs. 10 crores to continue  in business without maintaining the accounts books. All the tax authorities have concurrently recorded the findings that inspite of opportunities given to the assessee, he did not produce the account books. The register seized in survey related to the enquiry made by the customers and the purchase of used cars. The assessee could not satisfy the department with the difference of 178 cars, verified to be sold to him by Maruti Udyog Ltd. His explanation, that some of the customers had directly billed by the company, was not supported by any material. I do not find any reason to disbelieve the statement furnished by Maruti Udyog Ltd to the assessing authority. Once the department received information about the sale of the 1653 cars to the assessee as an authorized dealer, the burden shifted on the assessee that he had not sold 178 cars dispatched to him. The assessee is a dealer of Maruti Udyog Ltd and as a principal of the assessee there was no reason for Maruti Udyog Ltd to have given wrong information to the assessing authorities.

I do not find any good ground to interfere with the best judgment assessment by the trade tax authorities and the order passed by the Tribunal by which partly allowed the appeal in reducing the turn over to a reasonable limit.

The revision is dismissed.

Dt. 20.2.2007



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