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THE COMMISSIONER TRADE TAX U.P. LUCKNOW versus S/S YAMUNA BARDANA TRADERS

High Court of Judicature at Allahabad

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The Commissioner Trade Tax U.P. Lucknow v. S/S Yamuna Bardana Traders - SALES/TRADE TAX REVISION DEFECTIVE No. 1687 of 1998 [2005] RD-AH 6623 (29 November 2005)

 

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

Court no.55

TRADE TAX REVISION NO.(1687) of 1998

AND

TRADE TAX REVISION NO.(1700) of 1998

The Commissioner, Trade Tax, U.P., Lucknow.       Applicant

Versus

S/S Yamuna Bardana Traders, Haryana.                Opp.party

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

Hon'ble Rajes Kumar, J.

Present two revisions under Section 11 of U.P. Trade Tax Act (hereinafter referred to as "Act") are directed against the order of Tribunal dated 27th April, 1998 relating to the assessment years 1989-90 both under the U.P. Trade Tax Act and Central Sales Tax Act.

Brief facts of the case-giving rise to both the revisions are that the dealer/opposite party (hereinafter referred to as "dealer") claimed that it was carrying on the business of buying and selling of bardana in the State of Haryana and was also registered under the Haryana Sales Tax Act and under the Central Sales Tax Act at Haryana It was also claimed that no business was carried on in the State of U.P. On 15.09.1989, the Trade Tax Officer checked the vehicle in which old HDPI bags were found loaded and relating to such goods one builty no.1099 dated 15.09.1989 of M/S Gold Mallick Transport Co., Talab, Hathras and bill No.238 dated 15.09.1989 for Rs.52,650/- in favour of M/S S.R. Enterprises, Muzaffarnagar were found. Alongwith the goods, challan no.3685 dated 15.09.1989 issued by M/S Adarsh Khad Bhandar, Mahavirganj, Aligarh issued in the name of M/S Yamuna Bardana Traders, Yamunanagar, Haryana was also found. Alongwith the goods one Sri Ashok Kumar son of Amar Singh representative of M/S Yamuna Bardana Traders, Yamunanagar, Haryana was present and on enquiry, the bill book bearing no.210 dated 12.4.1989 for Rs.31, 537.50 paise issued in favour of Gujarat party and bill no.238 issued in favour of Muzaffarnagar party was presented. On the basis of aforesaid materials, Commissioner of Trade Tax, Lucknow in exercise of powers under Rule 6 (5) of the Rules appointed Trade Tax Officer, Sector-III, Aligarh as assessing authority of the dealer to assess the dealer.. In pursuance thereof, assessment proceedings both under the U.P. Trade Tax Act and Central Sales Tax Act were initiated and notices were issued. Dealer appeared before the assessing authority and furnished details of the bill nos. 201 to 238 by which the total sales for Rs.12, 30,074.63 paise were made. It was also admitted that the total purchases for Rs. 10,62,609.70 paise were made within the State of U.P. It was explained that the sales for Rs. 1,69, 156.25 paise were  made to the U.P. parties against bills nos. 236, 237 and 238 and sales for Rs.1,17,639.75paise against bill no. 224, 225 and 226 related to the goods purchased from Punjab and sold by transfer of documents. Sales of Rs.9, 43,278.63paise were admitted to had been made to the parties outside the State of U.P. by endorsement of builties. Before the assessing authority, it was claimed that on the instructions of the dealer, the U.P. dealer had despatched the goods to another U.P. dealer. With regard to the Central Sales, it was claimed that in the G.R. the selling dealer from whom the goods had been purchased were consignor and present dealer was consignee and by endorsement of such builties, sales were made to the various parties situated at Haryana and also in other States. It was claimed that the sales were subsequent inter-State sales and in respect of which for some of the transactions, Form E-1 and Form C were furnished before the assessing authority at Haryana Dealer claimed that it had not carried on any business in the State of U.P., thus not liable to be assessed. Assessing authority rejected the claim of the dealer and passed the assessment orders both under the U.P. Trade Tax Act and under the Central Sales Tax Act. Under the U.P. Trade Tax Act, the assessing authority had assessed the sale of Rs.1,69,157.25 paise and granted exemption thereon, sales being related to U.P. purchased goods. So far as the assessment under the Central Sales is concerned, assessing authority was of the view that the builties were prepared by the dealer and the goods had been despatched by it from the State of U.P. Assessing authority was of the view that the dealer could not furnished the certificate of the U.P. seller from whom the goods had been purchased, that the goods had been despatched outside the State of U.P. by them. Assessing authority, however, on the basis of the second copy of Form C filed before the assessing authority at Haryana, levied the tax at the rate of 4 percent on some of the transactions and levied the tax at the rate of 10 percent in respect of which copy of the Form C was not furnished. Dealer filed two appeals before the Assistant Commissioner (Judicial), Trade Tax. In appeals, apart from the merit of the case, the dealer challenged the jurisdiction of the Trade Tax Officer, Sector-III, Aligarh who had passed the assessment order. It has also been challenged that the Commissioner of Trade Tax had no jurisdiction to appoint Trade Tax Officer, Sector-III, Aligarh as assessing authority under Rule 6 (5). The ground for challenge of the jurisdiction was that the dealer had not carried on the business of buying and selling inside the State of U.P. and was not the dealer within the definition of Section 2 (c) of the Trade Tax Act and Central Sales Tax Act. Assistant Commissioner (Judicial), Trade tax vide order dated 15th June, 1995 allowed the appeals and held that since the dealer was carrying on the business at Haryana and was not carrying on the business within the State of U.P., the order passed by the Commissioner of Trade Tax under Rule 6 (5) appointing the Trade Tax Officer Sector-III, Aligarh as assessing authority was illegal. Commissioner of Trade Tax filed appeal before the Tribunal. Tribunal, by the impugned order, upheld the order of the first appellate authority. Tribunal held that the dealer was carrying on the business at Haryana and was not carrying on the business within the State of U.P. and therefore, the order passed under Rule 6(5) by the Commissioner of Trade Tax was not justified. Tribunal was further of the view that on the instructions of the dealer, the goods had been despatched by the U.P. seller and sales were made by the endorsement of the documents in favour of the various parties and in respect of which Form E-1 and Form C were filed before the assessing authority at Haryana. Tribunal held that the assessing authority had wrongly inferred that the dealer had purchased the goods within the State of U.P. and sold the goods outside the State of U.P. Tribunal has also observed that the dealer had not made any purchase and sale within the State of U.P. and the view of the first appellate authority that the Trade Tax Officer had no jurisdiction to pass the orders has been upheld.

Heard learned counsel for the parties.

Learned Standing Counsel submitted that the view of the first appellate authority and the Tribunal that the Trade Tax Officer, Sector-III, Aligarh had no jurisdiction to pass the assessment order inasmuch as the Commissioner of Trade Tax had illegally appointed the Trade Tax Officer, Sector-III, Aligarh as the assessing authority under Rule 6 (5) of the Rules is illegal and erroneous. He submitted that as per the dealer's own case, the goods were purchased within the State of U.P. and were sold within the State of U.P. and, therefore, the opposite party was the dealer within the definition of Section 2 (c) of the Act. He further submitted that on the basis of bill books and the document, it was found that the goods had been purchased within the State of U.P. and were despatched outside the State of U.P., therefore, there was a prima facie evidence to show that after purchasing the goods within the State of U.P. same were despatched outside the State of U.P. as inter-State sale and in view of Section 9 (1) of the Central Sales Tax, the dealer was liable to pay tax under the Central Sales Tax Act in the State of U.P.  inasmuch as movement of goods started within the State of U.P.

Learned counsel for the dealer/opposite party submitted that the opposite party was carrying on the business at Haryana and was not carrying on any business of buying and selling within the State of U.P. and, therefore, the Trade Tax Officer, Sector-III, Aligarh had no jurisdiction to treat the opposite party as dealer. He submitted that during the movement of the goods outside the State of U.P.,  builties were endorsed in favour of the various parties of Haryana and other States. Thus, sales were subsequent inter-State sale as contemplated under Rule 6 (2) and in respect of which Form E-I and Form C were furnished to the assessing authority at Haryana and, thus, no assessment order could be passed.

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

In my opinion, the order of the Tribunal and the first appellate authority are not sustainable. Admittedly, the goods were purchased from the various dealers within the State of U.P. and out of which, some of the goods were sold to the U.P. parties and some of the goods were despatched outside the State of U.P and thus, there was purchase and sale of goods within the State of U.P. and opposite party was dealer within the meaning of section 2 (c) of the Act and the Trade Tax Officer, Sector-III, Aligarh  had jurisdiction to assess the opposite party. So far as the assessment under Central Sales Tax Act is concerned, Assessing authority had not accepted the claim of the opposite party that the goods had been despatched by the U.P. selling parties outside the State of U.P. Assessing authority observed that no evidence had been adduced by the opposite party to prove that the goods had been despatched by the U.P. selling parties. It has been held that after purchasing the goods within the State of U.P., same were despatched by the dealer opposite party outside the State of U.P. and thus, opposite party had been treated as dealer. Thus, I am of the view that on the facts and circumstances of the case, it cannot be said that there was no material at all on the basis of which the assessment proceeding had been initiated against the opposite party. Thus, the order of the Commissioner of Trade Tax under Rule 6 (5) appointing the Trade Tax Officer, Sector-III, Aligarh as assessing authority cannot be said to be illegal or without any jurisdiction. The order of the Tribunal and the first appellate authority are set aside and the matter is remanded back to the first appellate authority to decide the appeals afresh and adjudicate the issue whether the alleged transactions were inter-State sales of the U.P. selling parties and subsequent inter-State sale of U.P. by way of endorsement of builties or inter-State sales from U.P.

In the result, both the revisions are allowed. Order of the Tribunal is set aside and the matter is remanded back to the first appellate authority to decide both the appeals afresh in the light of the observations made above.

Dated.29.11.2005.

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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