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M/S. Har Prasad Shiv Charan v. Commissioner Of Trades Tax, U.P. Lucknow - SALES/TRADE TAX REVISION No. 556 of 2001  RD-AH 5122 (22 March 2007)
TRADE TAX REVISION NO.556 OF 2001
TRADE TAX REVISION NO.557 OF 2001
M/s Har Prasad Shiv Charan. ....Applicant
Commissioner of Trade Tax, U.P., Lucknow. .Opp.party
Hon'ble Rajes Kumar, J.
These two revisions under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") are directed against the order of Tribunal dated 23.11.2000 relating to the assessment years 1986-87 and 87-88.
Brief facts of the case are that the applicant is a registered dealer carrying on the business of food grains, dal, seeds and mahua flower. Applicant claimed to have sold the goods through its commission agents, M/s Ganga Enterprises, Calcutta and M/s Jamuna Enterprises, Calcutta In support of the aforesaid claim, Form-F obtained from the aforesaid two commission agents were filed. The consignment note etc. were also filed. It was also stated that the goods had been despatched through transporter M/s Allahabad-Gorakhpur Road Lines, Mutthiganj, Allahabad, proprietorship concern of Shri Ram Raj. Copy of the builties were also filed. On the examination of the documents submitted by the applicant referred hereinabove assessing authority issued show cause notices. For the assessment year 1987-88 show cause notice was issued stating therein that in the statement Shri Ram Raj, Proprietor of the transport company denied to have transported the goods. It has also been stated that the enquiry was made at the premises of M/s Ganga Enterprises, Calcutta and M/s Jamuna Enterprises, Calcutta in which they have admitted that the goods have not been sold by them and only Form F were issued against commission and on the basis of such enquiry consignment sales were not acceptable. Applicant filed the reply to the show cause notice. In reply to the show cause notice the statement given by Shri Ram Raj was disputed and opportunity of cross-examination was sought, in case such statement was being utilized against the assessee. The alleged enquiry from M/s Ganga Enterprises, Calcutta and M/s Jamuna Enterprises, Calcutta made behind the applicant was also disputed and the opportunity of the cross-examination was sought.
For the assessment year 1987-88 applicant had sold food grains through M/s Jamuna Enterprises, Calcutta only. Goods were despatched through Allahabad-Gorakhpur Road Lines, Mutthiganj, Allahabad. In support of the claim that the goods were despatched to the commission agent for sale at Calcutta Form-F, sale note, builty were filed. For this assessment year also show cause notice was issued. Applicant filed reply to the show cause notice and sought the opportunity of the cross-examination.
Assessing authority had passed the assessment orders under U.P. Trade Tax Act and rejected the claim of consignment sale. Assessing authority treated the transactions as intra-State sales and levied the tax under the U.P. Trade Tax Act. Being aggrieved by the order, applicant filed two appeals before the Assistant Commissioner (Judicial), Trade Tax, Allahabad. The Assistant Commissioner (Judicial) vide order dated 28.04.1992 dismissed both the appeals. Applicant further filed two second appeals before the Tribunal. Initially both the appeals have been heard by the Bench consisted of Shri S.K.Maurya and Shri Sheo Lal. Shri S.K.Maurya, Member Tribunal was of the view that the appeal has no merit and accordingly, dismissed the appeal. He has held that the applicant had not moved any application seeking the opportunity of the cross-examination. He further held that the affidavit of Shri Ram Raj filed on 17.03.1990 could not be believed. He further held that the burden lies upon the applicant to prove the consignment sale, which the applicant failed to prove. Another Member Tribunal was of the view that under the similar circumstances, Division Bench of the Tribunal has taken a different view and has accepted the claim of consignment sales and thus, matter was to be referred to the Larger Bench of the Tribunal for decision. It appears that on account of difference of opinion the matter was referred to Third Member of the Tribunal for decision. Third Member of Tribunal instead of deciding the issue namely, that whether the matter should be referred to Larger Bench or should be decided on merit, upheld the order of one of the Member Tribunal and dismissed the appeal. Aggrieved by the aforesaid order, present revisions have been filed.
Heard learned counsel for the parties.
Learned counsel for the applicant submitted that the Tribunal is wrong in saying that the opportunity of the cross-examination has not been sought. He submitted that in reply to the show cause notice specific prayer was made for the opportunity of the cross-examination. He further submitted that in case revenue wants to rely upon any statement taken on the back or wants to rely upon any enquiry which was made on the back of the assessee, same should be confronted and the opportunity of the cross-examination should be afforded to prove the genuineness, authenticity and correctness of the statement or the enquiry. He submitted that in the present case though opportunity of the cross-examination was specifically sought but the same has not been allowed and the adverse inference has been drawn from the statement of Shri Ram Raj, proprietor of M/s Allahabad-Gorakhpur Road Lines, Mutthiganj, Allahabad and the alleged enquiry made from M/s Ganga Enterprises, Calcutta and M/s Jamuna Enterprises, Calcutta.
Learned Standing Counsel submitted that though it is correct that in reply to the show cause notice, applicant sought the opportunity of the cross-examination but no separate application was filed for seeking the opportunity of the cross-examination and, therefore, Tribunal is right in saying that the applicant had not moved any application for the opportunity of the cross-examination and in the absence of any application being moved if the assessing authority had not provided the opportunity of cross-examination, the orders of the assessing authority can not be said to be erroneous. He further submitted that the applicant could not discharge its burden under section 6-A of the Act to prove that the goods had been despatched to its consignment agents for sale.
Having heard learned counsel for the parties, I have perused the order of Tribunal and the authorities below.
In my opinion, order of the Tribunal is not sustainable. It is settled principle of law that the in case if the revenue wants to rely upon any statement, enquiry or documents, which is procured on the back of the applicant, it is obligatory on the part of the revenue authorities to confront those documents and to prove its correctness, genuineness and authenticity, the opportunity of the cross-examination should be afforded.
In the present case, admittedly, the opportunity of the cross-examination has not been provided. In reply to the show cause notice applicant has categorically asked for the opportunity of the cross-examination. Point Nos.1 and 2 of the reply to the show cause notice are referred hereinbelow:
"Point NO.1 : - In this respect it is submitted that on specific inquiry was done from the transporter in respect of the goods sent by the assessee. The assessee has filed before you the Photostat copy of the bilties of the transport company and there is no denial by the transport company that the above bilties were not issued by him. A mere oral statement against the documentary evidences without disputing the correctness of the documentary evidences, is not a sufficient ground to discard the documentary evidences. In this respect the assessee request from you to issue the copy of the statement said to be given by Shri Ram Raj the owner of the transport company on 8.1.89. He should also be summoned for cross objection by the assessee in case you want to utilize his statement against the assessee.
Your further direction that the original records of the transport company be produced is also not proper for the original records of the transport company are not within the custody of the assessee. If you have any doubt regarding the reliability of the bilties, you can summon the transporter and the law has provided you the powers under the Act to summon the transporter with the original records. The full address was given in the copies of the bilties filed to you. However in support of the genuineness of the bilties the assessee is submitting herewith an affidavit of the transporter in which he has confirmed the transportation of the goods of the assessee to Calcutta in the A.Y. 86-87. In presence of the affidavit of the transporter there is no reason to doubt the genuineness of the bilties. Hence your Ist objection is not proper and correct.
Point No.2: - In this respect it is submitted that the goods were sold through M/s Ganga Enterprises Calcutta and Yamuna Enterprises Calcutta. You have told to the assessee that the inquiry of the above arathis were done and on the basis of the above inquiry the consignments sales shown is not acceptable. In respect of the inquiry of the firm M/s Ganga Enterprises it is submitted that as per reports given to you by S.T.O. (S.I.B.) the firm was found closed at the time of the inquiry. The statement of some persons Sri Suresh Kumar Jaiswal was noted. He had no connection with the firm M/s Ganga Enterprises and his statement has got no legal value. The statement of Sri Suresh Kumar Jaiswal is also wrong because as per his statement the firm M/s Ganga Enterprises ran upto Dec.85 while the firm M/s Ganga Enterprises actually run upto Feb.87 and in this respect the assessee is enclosing herewith evidences in support of the contentions that the firm M/s Ganga Enterprises was not closed in Dec.85 Similarly his other statements are also incorrect. Now even if you want to utilize his statement against the assessee, he should be produced for cross objections. In this respect the assessee is enclosing herewith a certificate (Photostat copy) of the arathis M/s Ganga Enterprises in which he has admitted the sales disclosed by the assessee through his arath and in the certificate it has also been mentioned by the arathis that the statement given by Sri Suresh Kumar Jaiswal in respect of their firm is not acceptable to them. Hence there is no reason to disbelieve the above consignment sales.
In respect of the inquiry of the other arathis it is submitted that the arathis has not denied the sales made by him on behalf of the assessee's firm. There is no reason in the statement to disbelieve the consignment sales shown through M/s Jamuna Enterprises. If the arathis has not shown the account of the relevant year in which the inquiry was done or the name of the person to whom the goods were sold by him, it does not mean that the goods were not sold by him through the arathis. He has admitted in the inquiry that he has obtained commission @ 1% on the goods sold by him. Hence the sales made through him is not disputable. However the statement of the arathis, itf it has been given by him that the original record documents which were sent with the goods were taken back by the assessee or his representative is not correct. The assessee or his representative has not taken back the documents which were sent with the goods for they belong to the arathis and there is no reason for keeping the same by the assessee. In support of this contention the assessee is also filing an affidavit. However it you still want to utilize the above portion of the statement of the arathis he should be summoned for cross objection for you have recorded the statement behind the assessee and he is your witness and therefore he should be produced for cross examination by the assessee in order to ascertain the truth.
There is no objection by you that the arathis is not registered in the State of Calcutta or the sales shown by the assessee through him has not been disclosed by him to the assessing authority of his State or the Form F issued by the arathis is false or entries therein are not correct. In absences of any of the above objection the consignment sales shown by the assessee cannot be disbelieved. The claim of the assessee cannot be rejected on the basis of general inquiry and statement. Each consignments will have to be proved by the department not to have been sent outside the State. Hence your 2nd objection is also not proper and valid."
Similar is the reply for the assessment year 1987-88. Thus, it can not be said that the opportunity of the cross-examination has not been sought. It is not necessary that separate application should be moved for seeking the opportunity of the cross-examination. Prayer made in reply to the show cause notice for the opportunity of the cross-examination was sufficient. Tribunal is wrong in this regard. In this view of the matter, order of the Tribunal is vitiated and liable to be set aside. Matter is remanded back to the assessing authority to pass the assessment orders afresh. In case, if the assessing authority wants to rely upon the statement of Shri Ram Raj and the alleged enquiry made from M/s Ganga Enterprises, Calcutta and M/s Jamuna Enterprises, Calcutta the opportunity of the cross-examination of Shri Ram Raj, proprietor of Allahbad-Gorakhpur Road Lines, Mutthiganj, Allahabad, M/s Ganga Enterprises, Calcutta and M/s Jamuna Enterprises, Calcutta should be afforded. It is open to the applicant to adduce any evidence or to file any reply in support of its claim and it is open to the assessing authority to make any enquiry or to examine the transactions with regard to the consignment sale.
In the result, both the revisions are allowed. Order of the Tribunal is set aside and the matter is remanded back to the assessing authority to pass the assessment orders afresh in accordance to the law.
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