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M/S Upendra Prasad Singh & Company v. The Commissioner Of Trade Tax, U.P. At Lucknow - SALES/TRADE TAX REVISION No. 2549 of 2005 [2005] RD-AH 6996 (6 December 2005)


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M/s Upendra Prasad Singh & Company, Mathura. ....Applicant


The Commissioner of Trade Tax, U.P. at 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 05.09.2005 for the assessment year 1997-98.

Applicant entered into a contract with Indian Oil Corporation for execution of works contract on 04.01.1995. The scope of the works contract was "Erection of Equipments and machinery and fabrication and erection of above ground piping and connected civil and structural works for CRU offsites and utilities at Mathura Refinery". The aforesaid contract had been executed during the year under consideration.  Applicant claimed that in the execution of works contract, material purchased from outside the State of U.P. and materials purchased within the State of U.P. had been used. In the execution of the works contract, both fabrication and erection was involved. Applicant had admitted the liability of tax on the value of the goods used in the execution of works contract purchased  from outside the State of U.P. Assessing authority vide order dated 15.03.2000 estimated the turn over  of fabricated items at Rs.16 lacs and levied tax thereon. Assessing authority was of the view that the applicant first fabricated the items and, thereafter, used in the execution of the works contract, thus,  fabricated items according to him was liable to tax. Applicant filed first appeal before Deputy Commissioner (Appeals) Trade Tax, Aligarh, who vide its order dated 26.09.2001 allowed the appeal and deleted the tax on the estimated turn over of the fabricated items.  Commissioner of Trade Tax filed appeal before the Tribunal. Tribunal by the impugned order allowed the appeal and remanded back the matter to the Deputy Commissioner (Appeals) to decide the appeal afresh.

Heard learned counsel for the parties.

Learned counsel for the applicant submitted that  the remand of the case to the first appellate authority is without any basis. He submitted that in works contract there is always work of fabrication, erection and commissioning etc. The work of the fabrication and erection had been carried on at the site itself. According to him the fabrication was part of the execution of the contract.  He submitted that the estimate of turn over  of the fabricated items by the assessing authority and the levy of tax thereon was without any basis and, therefore, first appellate authority has deleted the tax on it. He submitted that in the execution of works contract fabrication and erection etc. took place at the site as part of the execution of works contract, thus, no separate turn over of fabricated goods can be estimated. He submitted that the Tribunal is the last Court of fact, should decide the issue itself instead of remanding back the matter to the first appellate authority. He submitted that no investigation or any kind of enquiry is required in the case. Learned Standing Counsel relied upon the order of Tribunal.

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

In my view, order of the Tribunal is not sustainable. On the facts and circumstances of the case, there is no justification in remanding back the case to the first appellate authority. First appellate authority deleted the tax on the estimated turn over of the fabricated items on the ground that there was no basis for such estimate. On the basis of the nature of the contract and the material on record, Tribunal has to examine whether the view of the first appellate authority deleting the tax is justified or not. Fabrication, erection etc. are part of the works contract, if all the aforesaid activities are being carried on at site in the process of the execution of the works contract. Tribunal is the last Court of fact and can examine the matter at its own stage. Therefore, in my view, remand of the case to the first appellate authority is unjustified.

In the result, revision is allowed. Order of the Tribunal is set aside and the matter is remanded back to the Tribunal to decide the appeal afresh in the light of the observations made above.




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