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M/S. Satish Trading Company v. Commissioner Of Trade Tax U.P. - SALES/TRADE TAX REVISION No. 549 of 1995 [2005] RD-AH 185 (17 January 2005)


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M/s Satish Trading Company. ....Applicant


Commissioner of Trade Tax, U.P., Lucknow. ....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 31.08.1995 for the assessment year 1981-82 under the U.P. Trade Tax Act.

Short question involved in the present revision is that whether the purchases made by the applicant for Rs.2,99,884.49p. which was alleged to have been made for and on behalf of Ex-U.P. Principal were the purchases in the course of inter-State and not liable to tax under the Act. Assessing authority had rejected the claim of the applicant and levied the tax on the purchases under section 3-D (1) of the Act. First appellate authority had also rejected the claim of the applicant. Applicant filed appeal before the Tribunal, which has also been rejected.

Heard learned counsel for the parties.

Learned counsel for the applicant submitted that the first appellate authority has accepted that the purchases were made on behalf of Ex-U.P. Principal, still had not accepted the claim of inter-State purchases. He submitted that after purchasing the goods, same were dispatched at the destination of the Ex-U.P. Principle and the rejection of claim on the ground that while making the purchases, it was not told to the selling party that for whom the goods have been purchased. He further submitted that it is wrong to say that separate lot have not been kept in respect of the purchases made for and on behalf of Ex-U.P. Principal. Learned Standing Counsel submitted that the assessing authority has examined the purchases in detail and had held that after making the purchases, some goods were dispatched after ten days and some of the goods have been dispatched after twenty days as per the claim of the applicant. It has been further observed that in the stock register separate details of the purchases made on behalf of Ex-U.P. Principal and purchases on own account have not been mentioned and it is not clear from the entry of the books of account that the goods, which were purchased on behalf of Ex-U.P. Principal, same have been despatched to them and on this basis it has been held that the purchase of goods and the despatch were not correlated to each other. This finding has been held by the Tribunal.

In my opinion, there is no error in the order of Tribunal. Tribunal has considered the finding of the assessing authority, which is based on  the detailed examination of the books of account, and details furnished by the applicant, namely that the goods were despatched to the Ex-U.P. Principal after ten days in some of the case and after twenty days in some of the cases and  no separate entries have been made in the stock register relating to the goods purchased on behalf of Ex-U.P. Principal and the purchases on own account and the books of account did not show any separate entry and, therefore, it could not be said that there was co-relation in the purchase of Ex-U.P. Principal and the goods despatched and accordingly, the claim of the purchase made on behalf of Ex-U.P. Principal has been rejected. In the case of CST and others Vs. M/s Bakhtawar Lal Kailash Chand Arhti and others, reported in 1992 UPTC, 971, Apex Court held that the purchases should be made on behalf of Ex-U.P. Principal on the basis of the orders and, thereafter, should be despatched immediately to the destination of the Ex-U.P. Principal. Both purchases and despatch and out side the State should be integrally connected and co-related to each other. On theses fact such purchase has been held as purchase in the course of inter-State purchases and not liable to tax under the said law. On the finding of the Tribunal it can not be said to be a case of purchase in the course of inter-State.  Finding of the Tribunal is finding of fact and needs no interference.

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




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