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THE COMMISSIONER TRADE TAX, versus CESS CON LIMITED, KANPUR.

High Court of Judicature at Allahabad

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The Commissioner Trade Tax, v. Cess Con Limited, Kanpur. - SALES/TRADE TAX REVISION No. 1135 of 1999 [2007] RD-AH 5044 (21 March 2007)

 

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HIGH COURT OF JUDICATURE OF ALLAHABAD

Court no.22

TRADE TAX REVISION NO.1135 of 1999.

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

Versus

S/S Cess Con Limited, Kanpur.                                    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 15th June, 1999 relating to the assessment year, 1994-95.

Dealer/opposite party (hereinafter referred to as "the Dealer") is a contractor. It had entered into a contract with National Thermal Power Corporation Limited for the supply of material as well as for transportation, erection etc for 220 KV Auriya Gas Power Project, Divyapur. The contract was a divisible contract for the supply of material and for erection, storage, commissioning etc. During the year under consideration, dealer claimed to have supplied goods for Rs.3, 91,56,776.27 to National Thermal Power Corporation Limited by endorsement of document under section 6 (2) of the Central Sales Tax Act (hereinafter referred to as "Central Act") in respect of which Form C and Form E-1 were furnished. It appears that the dealer had furnished Form C for Rs. 4,01,13,366.97 while the actual inter-State sales was only for Rs.3, 91,56,776.27. The dealer was asked to explain the difference in the actual sales and the amount of Form C. It was explained that in the Form C inadvertently, sales for Rs.9, 57,590.70 was also included which related to the sales of U.P. purchased goods. The assessing authority found the explanation of the dealer correct. During the year under consideration, the dealer had purchased Ex-U.P. goods for Rs. 4,47,16,630.11 out of which the sales for Rs.3, 91,56,776.27 was made by transfer of document and the balance goods has been shown as closing stock for Rs.75, 24,497.02. Assessing authority examined the books of account and passed the assessment order both under the U.P. Trade Tax Act and Central Sales Tax Act vide order dated 30th March, 1998. The books of account have been accepted and the subsequent inter-State sale under section 6 (2) of the Central Act at Rs.3, 91,56,776.27 has also been accepted under the Central Act. Deputy Commissioner (Executive), Trade Tax, Kanpur initiated the proceeding under section 10-B of the Act and thereafter remanded back the matter to the assessing officer for fresh assessment. The main objection for passing the order under section 10-B of the Act was that the dealer had made subsequent inter-State sales for Rs.3, 91,56,776.27, while the Form C was furnished for Rs.4,01,13,366.97 and the dealer had shown the closing stock of  Rs.75, 24, 497.02 which relates to the sales during the movement of goods by endorsement of builty.  Deputy Commissioner (Executive), Trade Tax, Kanpur was of the view that on these issues, the matter requires further enquiry. Being aggrieved by the order of Deputy Commissioner (Executive), Trade Tax, Kanpur, dealer filed appeal before the Tribunal. Tribunal by the impugned order allowed the appeal and set aside the order passed by the Deputy Commissioner (Executive), Trade Tax, Kanpur. Tribunal held that in the assessment order, the assessing authority has accepted the explanation that the Form C for Rs. 4,01,14,366.97 includes the sales of the U.P. purchased goods for Rs.9, 57,590.70. Tribunal further held that the stock of Rs. 75,24,497.02 was the goods in transit and, therefore, it was shown as closing stock. Tribunal held that the direction of the Deputy Commissioner (Executive), Trade Tax, Kanpur for fresh assessment is based on merely surmises and conjecture and without any relevant consideration.

Heard learned counsel for the parties.

Learned Standing Counsel submitted that the Tribunal has erred in setting aside the order passed under section 10- B of the Act. He submitted that there is no material that the closing stock of Rs.75, 24,497.02 was related to the goods in transit and since the dealer was making the sales by endorsement of document, such amount could not be shown in the stock.

I do not find any substance in the argument of the learned Standing Counsel.

Perusal of the assessment order under the U.P. Trade Tax Act, which is Annexure SA-1 shows that the dealer had shown the purchases from outside the State of U.P. for Rs.4, 47,16,630.11 and out of which sales through transfer of document was shown at Rs. 3,91,56,776.27, therefore, the balance quantity has to be shown in closing stock whether in transit or in possession.

So far as present assessment is concerned, it does not make any difference whether the stock was in transit or in actual possession of the dealer. It has no relevance to the actual sales during the year under consideration.

In this view of the matter, I do not see any error in the order of the Tribunal and is, accordingly upheld.

In the result, revision fails and is, accordingly, dismissed.

Dated.21.03.2007.

VS.


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