High Court of Judicature at Allahabad
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M/S Modi Industries Ltd. v. The Commissioner,Trade Tax,U.P.Lko. - SALES/TRADE TAX REVISION No. 380 of 1996  RD-AH 276 (28 January 2005)
TRADE TAX REVISION NO.380 OF 1996
TRADE TAX REVISION NO.381 OF 1996
M/s Modi Industries Limited, Modinagar. ....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 21.11.1995 for the assessment years 1984-85 and 85-86, by which Tribunal has confirmed the penalty levied under section 15-A (1) (b) of the Act.
Proceedings under section 15-A (1)(b) of the Act had been initiated on the ground that applicant had realised a sum of Rs.1,56,38,069.05p. for the assessment year 1984-85 and a sum of Rs.1,60,57,020.35p. for the assessment year 1985-86in the name of the distribution expenses and on this amount tax has also been realised from the customers but the said amount has not been shown in the return as a part of the turn over and therefore, it has been inferred that the applicant had furnished false return. Thereafter, on the consideration of reply of applicant, levied penalty to the extent of 50% of the amount of tax leviable on the said amount. First appeals filed by the applicant were rejected. Applicant filed second appeals, which were also rejected.
Heard learned counsel for the parties.
Learned counsel for the applicant submitted that the applicant was disputing that the said distribution expenses would not be a part of turn over and, therefore, said amount has not been shown as part of the turn over in the turn over. Thus, it can not be said that the applicant had submitted false return. He further submitted that on the facts and circumstances, penalty to the extent of 50% is arbitrary and excessive. Learned Standing Counsel relied upon the order of the Tribunal.
I have perused the order of Tribunal and the authorities below.
Tribunal has recorded a categorical finding that the applicant has realised the amount as distribution expenses and on the said amount tax has also been charged but same has not been disclosed as turn over in the return while applicant itself treated the said amount as part of the turn over and accordingly, charged the tax. The claim of the applicant that distribution expenses charged from customers separately would not be part of turn over has not been accepted. Finding of the Tribunal that the applicant knew that it was part of turn over had not shown in the return is finding of fact and in my opinion, no interference is called for. However, looking to the facts of the case that the applicant was disputing that the distribution expenses is not part of turn over, though claim has not been accepted. In my view, minimum penalty would be reasonable in the present case. In the circumstances, Tribunal is directed to levy minimum penalty.
In the result, both the revisions are allowed in part. Order of Tribunal is set aside and the matter is remanded back to the Tribunal to levy the minimum penalty under section 15-A (1)(b) of the Act and pass the appropriate order in this regard.
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