High Court of Judicature at Allahabad
Case Law Search
The Commissioner Trade Tax,U.P.Lucknow v. S/S Balls And Silpebs Ltd. - SALES/TRADE TAX REVISION No. 924 of 1996  RD-AH 1618 (3 December 2004)
TRADE TAX REVISION NO. 924 OF 1996.
Commissioner, Trade Tax, U.P. Applicant Versus
S/S Balls and Silpebs Limited, Jhansi. 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 15th March, 1996 relating to the assessment year, 1990-91 under the Central Sales Tax Act.
In the present revision, dispute relates to the rejection of claim of goods returned for Rs. 10, 20, 321.o6 p.
Brief facts of the case are that the dealer/opposite party ( hereinafter referred to as " dealer"), during the course of the assessment proceedings claimed the goods returned for Rs. 10, 20, 321.06 p relating to central sales in respect of which details of, challan number, date of goods returned and details of Form 31 were furnished. Assessing authority asked the dealer to furnish the detail of bill number and date by which the goods were sold, but the same could not be furnished and, therefore, claim of deduction at Rs. 10, 20, 321.06 p claimed towards goods returned have been rejected and the tax has been assessed at the rate of 10 percent in the absence of Form C. First appeal filed by the dealer was rejected on the ground that the required evidence has not been furnished. Second appeal filed by the dealer was allowed and the tax assessed on the aforesaid amount has been deleted.
Tribunal observed that in respect of Rs. 10, 20, 321.06 p dealer has furnished challan nos. 1517704, 1519, 1520 and 664of M/S Hindustan Zinc Limited, letter dated 3.5.1990 of M/S Associated Company Limited, letter dated 8.1.1990 of Diamond Cement Works, bill nos. 56 and 54 of Modi Cement Works, Bill no. 49 of Keshav Ram Cement and delivery challan no. 24 of Diamond Cement Works in which there is no reference of the rejected returned goods. Tribunal further observed that photostat copy of Form 31 nos. 1524485, 513, 052, 0193, 1524, 584, 1524480, 152481, 0520362, 350, 1524578 and 050216 passed from the check post in which the rejected goods is mentioned have been produced and the dealer has properly deducted the amount in cash book and ledger and no evidence has been brought on record by the assessing authority and by the appellate authority that these amount have not been deducted in the books of account and the goods returned have been brought for sale. Tribunal held that the claim relates to the rejection of goods. Tribunal further observed that it was the responsibility of the purchaser to send goods within six months, but if the purchasing dealers have not entered such goods in their books of account, there was no question of their return and it was open to the seller how and by which mode the goods would be brought. On the basis of the aforesaid fact, it was held that the evidence are available relating to the goods returned for Rs. 10, 20, 321. 06p. for which benefit should be allowed and the same cannot be made as part of the turnover. Tribunal referred Rule 44 (a) and 44 (b) of the U.P. Trade Tax Rules.
Heard learned counsel for the parties.
Learned Standing Counsel submitted that the order of the Tribunal is patently erroneous. He submitted that the assessing authority had rejected the claim of the goods returned on the ground that the dealer could not furnish bill number and the date of the bill by which the goods have been sold which was very material to decide the issue involved. He further submitted that the Tribunal has relied upon the various letters issued by the purchaser which were not filed before the assessing authority and filed for the first time before the Tribunal and no opportunity to the revenue for verification was provided. Inasmuch as some of the letters were photostat copy and even not original which is clear from the order of the Tribunal. He submitted that unless bill number and date are provided, it cannot be decided whether the goods have been sold during the year under consideration and whether the goods were returned within six months. He further submitted that it is not the case of the dealer that the alleged retained goods were not sold and no bills in respect of such goods have been raised. He further submitted that though Rule 44 of U.P. Trade Tax Rules has been referred, but in the present case, Section 8-A of the Central Sales Tax Act is relevant which relates to goods returned.
Learned counsel for the dealer submitted that the present case is not the case of the goods returned, but is a case of goods rejected and, therefore, neither provision of Section 8-A of the Central Sales Tax Act nor Rule 44 are applicable. In support of his contention he relied on the decision of the Calcutta High Court in the case of Metal Alloy Company Pvt. Ltd. Versus Commercial Tax Officer reported in 39 STC page 404 which has been followed by this Court in the case of CST Versus M/S Capital Software reported in 1983 STJ page 764 and the decision of the Bombay High Court in the case of M. Framrose and Company Versus The State of Maharashtra reported in 40 STC page 36.
I have perused the order of the Tribunal and the authorities below.
In my opinion, order of the Tribunal cannot be sustained. Admittedly, claim of goods returned relates to Central sales and, therefore, the provision of Central Sales Tax Act are applicable. If there is specific provision relating to the goods retuned under the Central Sales Tax Act, same should be made applicable and not the provision of U.P. Trade Tax Act and Rules framed thereunder. Section 8-A of the Central Sales Tax Act deals with the goods returned which reads as follows:
" 8-A. Determination of turnover.--(1) In determining the turnover of a dealer for the purposes of this Act, the following deductions shall be made from the aggregate of the sale prices, namely :-
(a) the amount arrived at by applying the following formula--
rate of tax X aggregate of sale prices.
100 + rate of tax.
Provided that no deduction on the basis of the above formula shall be made if the amount by way of tax collected by a registered dealer, in accordance with the provisions of this Act, has been otherwise deducted from the aggregate of sale prices.
Explanation.- Whether the turnover of a dealer is taxable at different rates, the aforesaid formula shall be applied separately in respect of each part of the turnover liable to a different rate of tax;
(b) the sale price of all goods returned to the dealer by the purchasers
of such goods,-
(i) within a period of three months from the date of delivery of the good, in the case of goods returned before the 14th day of May,1966.
(ii) within a period of six months from the date of delivery of the goods, in the case of goods returned on or after the 14th day of May, 1966.
Provided that satisfactory evidence of such return of goods and of refund or adjustment in accounts of the sale price thereof is produced before the authority competent to assess or, as the case may be, reassess the tax payable by the dealer under this Act ; and
( c) such other deductions as the Central Government may, having regard to the prevalent market condition, facility of trade and interests of consumers, prescribe.
(2) Save as otherwise provided in sub-section (1), in determining the turnover of a dealer for the purposes of this Act, no deduction shall be made from the aggregate of the sale prices.
Section 2 (g) of the Central Sales Tax Act defines sale price as follows.
" sale " with its grammatical variations and cognate expressions means any transfer of property in goods by one person to another for cash or for deferred payment or for any other valuable consideration, and includes a transfer of goods on the hire-purchase or other system of payment by instalments, but does not include a mortgage or hypothecation of or a charge or pledge on goods".
Section 8-A ( 2 ) of the Central Sales Tax Act says that save as otherwise provided in sub-section (1), in determining the turnover of a dealer for the purpose of this Act, no deduction shall be made from the sale price. Under the Central Sales Tax Act deduction of goods returned is only possible if the goods is covered under section 8-A (1) of the Act. In the present case, on the facts and circumstances, Section 8-A (1) (a) is not relevant and Section 8-A (1) (b) (ii) is relevant, which contemplates the deduction from the aggregate of the sale price.
Perusal of the assessment order, first appellate order and the order of the Tribunal shows that none of the authorities have considered Section 8-A of the Central Sales Tax Act. Primary question for consideration is whether in respect of the alleged goods returned, sale had already been completed between the dealer and its buyers and thereafter the goods had been returned and whether the sales had not been completed and the goods had been rejected unilaterally, no payments was made or delivery of the goods had not been taken or for any other reason, there was no completed sale . If there was complete sale then the benefit of the deduction in respect of the sale price of the goods returned can only be allowed under section 8-A (b) of the Central Sales Tax Act. and if there was no complete sale, provision of Section 8-A (b) of the Act does not apply. In my opinion, to examine whether there was a complete sale or not, bill number, date of bill, challan number by which the goods were despatched and the entries in the books of account are relevant to be examined. In the present case, as per the assessment order even on demand by the assessing authority, bill numbers and date had not been furnished and no plea appears to have been raised that the present case is not the case of completed sale. The details furnished were only relating to the goods returned and not relating to the sale of goods. It also appears that various challan number and the letters of the purchasers which have been relied upon by the Tribunal have been filed for the first time before the Tribunal and in respect of which no opportunity was given to the revenue. Tribunal has also not adverted to the reasoning given by the assessing authority. Details of the bill number and date have not been furnished which are necessary to decide the issue involved. Tribunal has also not considered section 8-A of the Central Sales Tax Act and has only considered Rule 44 which is not relevant. In my opinion, matter requires a fresh adjudication by the assessing authority.
I am not considering the decisions cited by the learned counsel for the dealer for the reason that the decisions based on the facts which in the present case is yet to be adjudicated and decided.
In the result, revision is allowed. Order of the Tribunal and the authorities below so far as it relates to the claim of deduction of the goods returned for Rs. 10,20,321.06 p is concerned are set aside and the matter is remanded back to the assessing authority to adjudicate the issue afresh in the light of the observations made above and pass fresh assessment order.
Double Click on any word for its dictionary meaning or to get reference material on it.