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Goldy Trading Co v. Commissioner Trade Tax, U.P. Lucknow - SALES/TRADE TAX REVISION No. 2701 of 2004 [2005] RD-AH 508 (23 February 2005)


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Goldy Trading Co. ....Applicant


Commissioner 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 27.07.2004 for the assessment year 2000-01.

Applicant was carrying on the business of food grains and alleged to have been maintained books of account in the regular course of business. Books of account have been rejected and the turn over at Rs.80 lacs has been estimated. It appears that during the year under consideration, applicant had purchased food grains for Rs.76,73,980/-  from M/s Neha Enterprises a proprietressship concern of Smt. Shashi Rathore, wife of Murari Lal Rathore, who is proprietor of the present firm. In respect of said goods one Form 3-C (2) No.252988 obtaiend from M/s Neha Enterprises was filed and exemption on such purchase was claimed. It appears that on enquiry it was found that M/s Neha Enterprises had shown the sale only to the extent of Rs.1,89,080/- and the tax on the alleged purchases had not been deposited. Thus the assessing authority rejected the claim of exemption on the basis of the said Form 3-C (2). First appeal filed by the applicant was rejected. Second appeal filed before the Tribunal has also been rejected by the impugned order.

Heard learned counsel for the parties.

Learned counsel for the applicant submitted that Form 3-C (2), was genuine and issued by the department and was for Rs.76,73,980/- and merely because M/s Neha Enterprises  had not shown the sale of Rs.76,73,980/- and had shown the sales only to Rs.1,89,080/- and had not paid the tax, exemption can not be denied to the applicant. He further submitted that in he case of M.s Neha Enterprises for the same assessment year on the basis of the said Form 3-C (2) issued for Rs.76,73,980/- turn over at Rs.1 crore has been estimated vide order dated 05.07.2002. Copy of the assessment year in the case of M/s Neha Enterprises has been filed as annexure-7 to the revision.

I have perused the order of Tribunal and the authorities below.

In my opinion, further enquiry is required in the matter. It is settled principle of law that unless form is found to be forged or obtained as a result of collusion between the parties, claim of exemption against the said form can not be denied merely because the party, who has issued the form has not paid the tax and the sales have not been shown in their assessment proceeding. No enquiry in this regard has been made. Smt. Shashi Rathore, wife of Murari Lal Rathore is proprietress of M/s Neha Enterprises and Murai Lal is the proprietor of the present firm. Therefore, an enquiry should be made 1) whether said Form 3-C (2) no.252988 is genuine and issued by the department; 2) whether form has been issued by M/s Neha Enterprises to the applicant; 3) whether the figure mentioned in the form claimed at Rs.76,73,980/- has been filled by M/s Neha Enterprises or it has been filled by the applicant; 4) if there is any cutting in the figure, who has done it and whether it has been certified by M/s Neha Enterprises; 5) Whether form has been obtained as a result of collusion between the parties.

After the aforesaid enquiry being made, it would be appropriate that the tax be levied only on one dealer depending upon the facts and circumstances of the case. In case, if on enquiry it is found that either of the party has done manipulation or committed fraud or any kind of criminal Act, necessary action may be taken against the said party.

With the aforesaid direction, matter is remanded back to the assessing officer. Assessing officer is directed to decide the matter expeditiously preferably within a period of three months from today.

In the result, revision is allowed. Order of Tribunal dated 27.07.2004 is set aside and the matter is remanded back to the assessing authority to pass the assessment order afresh in the light of the directions given above.




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