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M/S K.K. TRADERS versus THE COMMISSIONER, TRADE TAX, U.P.,LUCKNOW

High Court of Judicature at Allahabad

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M/S K.K. Traders v. The Commissioner, Trade Tax, U.P.,Lucknow - SALES/TRADE TAX REVISION No. 2027 of 2004 [2004] RD-AH 1605 (3 December 2004)

 

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

RESERVED

TRADE TAX REVISION NO.2027 OF 2004

M/s K.K.Traders, Shikohabad.                             Applicant.

                                                   Versus

Commissioner of Trade Tax, U.P. Lucknow.                      Opp-party.

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

Hon'ble Rajes Kumar, J.

Present revision under section 11 of the U.P. Trade Tax Act (hereinafter referred to as the "Act") is directed against the order of the Tribunal dated 26.04.2004 relating to the assessment year, 1995-96 under the Central Sales Tax Act.

It is alleged by the applicant that it was involved in the manufacturing and sales of glass chimney within the State of U.P. and was not involved in the business of glass ware. Assessment was made under the Central Sales Tax Act on the basis of the information received from the Trade Tax Officer, Panwari Check Post and on the basis of 82 bilties found at the time of survey made by the Trade Tax Officer (SIB) at the premises of Anant Goods Transport Carrier and Verma Transport Company, Firozabad relating to the sales outside the State of U.P. Trade Tax Officer, Panwari check post, Panwari vide its letter no.242 dated 8.7.1995 informed that against bill no.99 dated 25th May,1995 for Rs.33,750/- and against bill no.433 dated 9.12.1995, goods were sent outside the State of U.P. In the survey made by the Trade Tax Officer, Panwari at the business premises of Anant Goods Transport Carrier and Verma Transport Company, Firozabad, 82 such bilties were found in which applicant was shown as a consignor, by which the goods had been despatched outside the State of U.P. The value of the goods despatched against alleged 82 bilties was Rs.11,80,000/-. On the basis of the aforesaid information received from the Trade Tax Officer, check post, Panwari and on the basis of the aforesaid 82 bilties, assessing authority passed the assessment order under section 9 of the Central Sales Tax Act against the applicant and estimated the taxable turnover at Rs. 2,03,00,000/-. First appeal filed by the applicant was dismissed. Applicant filed second appeal before the Tribunal which was allowed and the matter was remanded back to the assessing officer for passing the assessment order afresh. While remanding back the case, Tribunal has directed the assessing authority to make enquiry from the transporter about the bilties. Assessing authority called upon the transporter for necessary enquiry. Dinesh Chandra partner of M/S Anant Goods Transport Carrier, Jain Mandir, Agra and proprietor of M/S Verma Transport Company, Agency, Jain Mandir, Agra appeared before the Assessing authority on 24th February,2000 and the statement was recorded in which he categorically stated that the alleged bilties were prepared on the basis of the bills issued by M/s K.K. Traders, Makhanpur for the despatch of goods and the goods were loaded from their factory. After the aforesaid statement, show cause notice was issued to the applicant on 16th March,2004 by which explanation was sought about the statement given by Dinesh Chandra relating to the alleged bilties. Applicant filed reply on 31st March, 2000  and also filed an affidavit. Assessing authority on consideration of the entire material on record, passed the assessment order dated 31th March, 2000 treating the alleged 82 bilties relating to the applicant and on the basis of 82 bilties and the information received from the check post about the despatch of the goods against bill no.99 dated 25th May,1995 and bill no.433 dated 9.12.1995, estimated the inter-state sale of glass-ware at Rs. 15 lacs.

Heard learned counsel for the parties.

Following questions have been raised in the present revision:

"A) Whether authorities functioning under the provisions of U.P.

Trade Tax Act can be permitted to fix the liability of tax merely on the basis of presumption in a speculative manner even without controverting the affidavits filed by the applicant?

B) Whether Trade Tax Authorities can be permitted to utilized any material found at the place of third party against the applicant without establishing the co-relation of the same with the applicant?

C) Whether inaction of the Trade Tax Authorities authorizes them to make assessment merely on the basis of surmises and conjectures?

D) Whether Trade Tax Authorities can be permitted to fix the liability of tax under the provisions of Central Sales Tax Act without bringing any material on record which may indicate that the applicant had made any central sale?

E) Whether in absence of any specific evidence, authorities functioning under the provision of U.P. Trade Tax Act can be permitted to estimate the turnover merely on the basis of presumption?

F) Whether the Trade Tax Tribunal was legally justified in dismissing the appeal of the applicant without careful consideration of material on record?

G) Whether the Trade Tax Tribunal was legally justified in ignoring the material on record which indicates that the bill and bilties found at the place of the transporter are fake and have no co-relation with the applicant?

H) Whether the Trade Tax Tribunal was legally justified in ignoring the inaction of the authorities while affirming the liability off tax imposed merely on the basis of surmises and conjectures?"

Learned counsel for the applicant submitted that the survey was made at the premises of the transporter and, therefore, burden lies upon the revenue to prove that the such bilties relates to applicant by which the goods have been despatched by the applicant outside the State of U.P. He further submitted that the applicant never dealt in glass-ware and was only carrying on the business of manufacture and sale of glass chimney. There was no material on record to establish that the applicant was involved in the business of glass-ware. He further submitted that there was vast difference in the proforma and pattern of the bill book of the applicant and the bills found at the premises of the transporter. He submitted that the transporter had prepared fake bills and bilties showing the name of the applicant, therefore, the same could not be relied upon. Learned Standing Counsel supported the order of the Tribunal.

I have perused the order of the Tribunal and the authorities below. I have also perused the assessment record, which has been produced at the time of hearing. Tribunal vide order dated 26th April, 2004 remanded back the case with the following directions:

" Having considered the arguments advanced on behalf of both the sides and after thoroughly scrutinizing the record very carefully, we have come to the conclusion that the assessee only admitted its business of purchase and sale of glass chimney only and the Assessing Authority has drawn adverse inference against the assessee only on the basis of a survey conducted at Anand Goods Carrier and M/S Verma Transport Company by T.T.O. S.I.B when some builties were seized disclosing the name of the assessee, but no enquiry was made from  the transport company about these builties as to who got prepared these builties. Only on finding the name of the assessee in the builties, the adverse inference of suppressing the central sales has been drawn against the assessee. The assessee denied these builties to be relating with him and filed his own affidavit. He also filed cutting of the New paper ''Amar Ujala' dated 16.9.98 in which it has been published that in Firozabad, the transporters used to prepare forged builties in the name of other dealers. The appellant admitted its business of purchase and sale of glass chimney within U.P. only and did not admit any business of glass wares. No Central Sales have been admitted by the appellant. The assessing authority has assessed the appellant only on the basis of the report of T.T.O. (S.I.B.0 and the R.R.'s seized at the premises of the transporter on which the name of the appellant's firm was found mentioned. There was no survey of the business premises of the assessee. In view of the facts and circumstances mentioned above, it is quite clear that the Assessing Authority has assessed the appellant on Central Sales of glass wares without conducting proper enquiry from the transporter as to who has got prepared the relevant builties in the name of the assessee and without going through the facts and circumstances of the present case. Hence this second appeal deserves to be remanded back to the assessing authority for deciding afresh according to law in the light of the observations made above. Hence this second appeal deserves to be allowed accordingly."

In pursuance of the order of the Tribunal, assessing authority called upon the transporter for enquiry and the statement of Sri Dinesh Chandra, son of Babu Ram Verma, partner of M/s Anant Goods Carrier and proprietor of M/s Verma Transport Company Agency were recorded on 24.02.2000 as follows:

Jh fnus'k pUnz oekZ ,l0@vks0 ckcwjke oekZ vkj0@vks0 egkchj uxj lk>hnkj QeZ es0 vuar xqM~l dSfj;j] tSu efUnj vkxjk xsV fQjkstkckn o Lokeh QeZ es0 oekZ V~zkUliksVZ dEiuh ,tsUlh tSu eafnj vkxjk fWQjkstkckn mifLFkr gq;s 'kiFk ij c;ku djrk gS fd es0 ds0 ds0 V~zsMlZ eD[kuiqj ds o"kZ 95&96 esa muds fcyksa ds vk/kkj eky Hkstus ls lEcfU/kr tks fcfYV;ka esjh mijksDr V~zkUliksVZ dEifu;ka }kjk cuk;h x;h muds lEcU/k esa eSa ,d 'kiFk i= nkf[ky dj pqdk gwa A ;g fcfYV;ka esa0 ds0 ds0 V~zsMlZ eD[kuiqj ds eky ds lEcU/k esa muds fcy ds vk/kkj ij cuk;h x;h gSa A ;g eky esjs lkeus mudh QSDVjh ls yknk x;k gS A

Sri Dinesh Chandra had also filed an affidavit annexing the chart in which the details of G.R. number, bill number, date, name of the party, package and amount have been given. The averment of the affidavit is as follows:

le{k &

Jheku O;kikj dj vf/kdkjh

f'kdksgkckn A

'kiFk i= feutkfuc fnus'k pUnz oekZ iq= Jh ckcwjke oekZ fuoklh xyh 8 egkchj uxj fQjkstkckn mez djhc 42 o"kZ A

'kiFk drkZ c;ku djrk gS %&

1& ;g fd 'kiFk drkZ vuUr xqN~l dSfj;j vkxjk xsV o oekZ V~zkUliksVZ dEiuh vkxjk xsV fQjkstkckj dk lk>hnkj gS rFkk QeZ ds leLr dk;Zdykiksa ls Hkyh Hkkafr ifjfpr gS A

2& ;g fd 'kiFk drkZ dks mijksDr nksuksa QeksaZ esa deh'ku ij eky V~zkUliksVZ djus dkdk;Z djrh gS A 'kiFk drkZ us dHkh Hkh viusfdlh uke ls vFkok QeZ ds uke ls vFkok vU; fdlh uke ls Xykl os;j ds fodzh ;k [kjhn dkdk;Z ugh fd;k gSA

3& ;g fd 'kiFk drkZ us QeZ esllZ ds0ds0 V~zsMlZ eD[kuiqj fQjksstkckn dk fofHkUu frfFk;ksa esas o fofHkUu fcyksa ls fofHkUu ikfVZ;ksa dk eky ifjogu fd;k gS A lk{; esa 'kiFkdrkZ esllZ ds0 ds0 V~zsMlZ eD[kuiqj fQjkstkckn ls Hksts x;s fcy la0 ikVhZ dk uke fnukad lfgr ek=k jde o th0 vkj0 ua0 rkjh[k lfgr vyx ls lhV ij layXu dj jgk gS A

4& ;g fd 'kiFk drkZ us mijksDr fcfYV;ka viuh fu;fer fcYVh cqd ls tkjh dh gSa lk{; esa 'kiFkdrkZ fcYVh cqd izLrqr dj jgk gS A

5& ;g fd 'kiFkdrkZ us QeZ esllZ ds0ds0V~zsMlZ eD[kuiqj dk eky viuh fcfYV;ksa ls muds fcy fd vuqlkj ifjogu fd;k gS A

;g fd 'kiFk i= dh ensa 1 ls 5 rd lgh gSa lR;kiu vkt fn0 17&12&99 dks eqdke fQjkstkckn ij fd;k x;k A

'kiFdrkZ

After the aforesaid affidavit and the statement, assessing authority issued show cause notice on 16.03.2000, which read as follows:

UksfVl

vkidk o"kZ 95&96 dk dsUnzh; izfrizsf"kr okn esjs le{k lquokbZ gsrq fu;r gS A vkids }kjk eky Hkstus ls lEcfU/kr tks fcfYV;ksa loZJh oekZ V~zkUlikaVZ da0 o vuUr xqM~l dSfj;j vkxjk xsV fQjkstkckn ds ;gka ik;h x;h Fkh ftudks vkius viuk Lohdkj ugh fd;k gS ds lEcU/k esa tkap gsrq mDr V~zkUliksVZ dEifu;ksa dks uksfVl fn;s x;s Fks A

V~zkUliksVZ dEiuh dh vksj ls Jh fnus'k pUnz iq= Jh ckcqjke oekZ us esjs le{k mifLFkr gks fcYVh cqd ls tkjh fcfYV;ksa dh tkap djk;h gS ,oa dgk gS fd ds0 ds0 V~zsMlZ eD[kuiqj }kjk eky Hkstus ds lEcU/k esa tkjh dh x;h gS vkSj ds0 ds0V~zsMlZ dk eky fcfYV;ksa ds vk/kkj ij ifjogu fd;k x;k gS A vl lEcU/k esa ,d 'kiFk i= o fcfYV;ksa dk fooj.k Hkh nkf[ky fd;k x;k gS ftlls muds ;gka tks fcfYV;ka ik;h x;h Fkha os vkils lEcfU/kr izekf.kr gskrh gSa vkSj vkids }kjk eky dk ifjogu izkUUr ckgj fd;k tkuk izekf.kr gksrk gS A

mDr lEcU/k esa vki viuk fyf[kr mRrj fnukad 23&3&2002 dks esjs le{k izLrqr djs A

Applicant filed reply of the aforesaid show cause notice. In the reply he has denied such builties connected with his business and stated that the said builties are forged. Applicant further repeated that he had not carried on any business of glass ware and had carried on the business of manufacture and sale of chimney. With regard to the statement of Sri Dinesh Chandra, following has been stated:

bl lEcU/k esa fuosnu gS fd uksfVl esa ;g  dgk x;k gS fd V~zkUliksVZ dEiuh dh vksj ls Jh fnus'k pUnz iq= Jh ckcwjke oekZ us fcYVh cqd ls tkjh fcfYV;ksa dh tkap djk;h ,oa dgk gS fd izkFkhZ }kjk eky Hkstus ds lEcU/k esa tkjh dh x;h gS vkSj izkFkhZ dk eky fcfYV;ksa ds vk/kkj ij ifjogu fd;k x;k gS A

bl lEcU/k esa izkFkhZ dk fuosnu gS fd tc fcfZYV;ka izkFkhZ ds uke ls QthZ cukdj V~zkUliksVZ }kjk tkjh dh x;h gS rks V~zkUliksVZ okys rks ;g dgsaxs fd eky dh fcfYV;ka izkFkhZ ls lEcfU/kr gSa V~zkUliksVZ okys ;g crkus esa vleFkZ jgs gSa fd fduds }kjk ;g fcfYV;ka cuk;h x;h D;ksafd fcfYV;ka tks ik;h x;h Fkha os S.I.B. }kjk V~zkUliksVZj ds LFky ij ik;h x;h gSa u fd izkFkhZ ds O;kikj LFky ij A ;fn mijksDr fcfYV;ka izkFkhZ ls lEcfU/kr Fkha rks S.I.B  }kjk rqjUr mlh le; izkFkhZ ds O;kikj LFky ij tkap djuh Fkh] tSlk ugha fd;k x;k gS A

From the aforesaid fact, it is clear that Sri Dinesh Chandra, partner and proprietor of transport company categorically stated that the alleged builties were prepared on the basis of the bills, issued by the applicant relating to the despatch of the goods and the goods have been loaded from the factory of the applicant in his presence. Statement being confronted to the applicant and no request was made by the applicant for the cross examination of Sri Dinesh Chandra. In my opinion, mere denial by the applicant was not sufficient. No evidence has been adduced to dispute the averment made in the affidavit, filed by Sri Dinesh Chandra and the statement of Sri Dinesh Chandra, in which he has categorically stated that the alleged builties have been prepared on the basis of the bills, raised by the applicant and the goods have been loaded from the applicant's factory in his presence. Adverse inference drawn by the revenue authorities against the aforesaid builties can not be held to be unjustified. Perusal of the record also shows that the applicant has not given any explanation with regard to bill no.99 dated 25.05.1995 and bill no.433 dated 09.12.1995 in respect of which the information was received from the check post officer, Panwari about the despatch of the goods outside the State of U.P. Therefore, the case of the applicant stand falsified that he had not made any sale in the course of inter-state sales merely on the basis of the information received from the Trade Tax Officer, Check Post Panwari. On the basis of 82 builties which relates to the amount of Rs.11,80,000/- and bill no.99 dated 25.05.1995 and bill no.433dated 09.12.1995 the estimate of the inter-state sales at Rs.15 lacs can not be said to be arbitrary and without any basis.

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

Dt. 03.12.2004

VS


Copyright

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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