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M/S The Hind Jalpan v. The Commissioner Of Trade Tax - SALES/TRADE TAX REVISION No. 88 of 2006  RD-AH 14305 (24 August 2006)
Court no. 43
Trade Tax Revision no. 88 Of 2006.
Trade Tax Revision no. 89 Of 2006.
Trade Tax Revision no. 90 Of 2006.
Trade Tax Revision no. 91 Of 2006.
M/S The Hind Jalpan, Gurubagh, Varanasi. ... Revisionist.
Commissioner of Trade Tax, U. P. Lucknow. ... Opp. Party.
Hon'ble Rajes Kumar, J.
These four revisions under section 11 of U.P. Trade Tax Act (hereinafter referred to as the "Act") are directed against the order of Tribunal dated 30th August, 2005 relating to the assessment years 1988-89, 1989-90, 1990-91 and 1991-92 respectively.
Applicant was carrying on the business of manufacture and sale of Sweetmeats and Namkins and claimed to be in a very small scale. During the years under consideration, the applicant had disclosed total turnover at Rs.41,440/-, Rs. 41,158/-, Rs.30,085/- and Rs.41,400/- respectively. No tax liability had been admitted, total turnover being below the taxable limit. The Assessing Authority passed the assessment orders for all the aforesaid assessment years under the summary scheme and accepted the disclosed turnover and declared non taxable. Proceedings under Section 21 of the Act were initiated on the basis of survey dated 11.6.1992 and enquiry dated 09.7.1992. On the basis of the aforesaid survey, the Assessing Authority estimated the gross and net turnover for the assessment year 1988-89 at Rs.5,00,000/-, for the assessment year 1989-90 at Rs.5,50,000/-, for the assessment year 1990-91 at Rs.5,50,000/- and for the assessment year 1991-92 at Rs.6,50,000/- respectively. First Appeals filed by the applicant were allowed in part. Applicant filed Second Appeals before the Tribunal. The Tribunal by the impugned order, allowed all the four appeals in part. The Tribunal has estimated the taxable turnover for the assessment years 1988-89, 1989-90, 1990-91 and 1991-92 at Rs.2,50,000/-, Rs,3,00,000/-, Rs.3,50,000/- and Rs.4,00,000/- respectively.
Heard learned Counsel for the parties.
Learned Counsel for the applicant submitted that the business was in a very small scale. He submitted that since the turnover was below the taxable limit,
therefore, applicant could not apply for registration. However, when the
turnover exceeded to taxable limit, registration was applied with effect from 01.4.1992 and from the said date, books of account have also been maintained. He submitted that at the time of survey dated 11.6.1992, books of accounts were found up to date and in the survey, there was nothing to suggest that the turnover for the assessment years under consideration were above the taxable limit. He submitted that in the absence of any material relating to the assessment years under consideration, the Assessing Authority had illegally initiated the proceedings under Section 21 of the Act and levied the tax on the basis of survey dated 11.6.1992, which was not relevant to the assessment years under consideration. Learned Standing Counsel relied upon the order of the Tribunal.
By means of Supplementary-affidavit, copy of survey dated 11.6.1992 has been filed.
Having heard learned Counsel for the parties and have perused the order of the Tribunal and the authorities below and also survey report dated 11.6.1992.
In the survey dated 11.6.1992 which is the basis for initiation of proceedings under Section 21 of the Act, does not suggest that any material was found relating to the assessment years under consideration. Survey is admittedly, not relevant to the years under consideration. In the absence of any material relating to the assessment years under consideration, to suggest that some turnover was escaped to assessment, initiations of proceedings under Section 21 are absolutely illegal and the orders passed in pursuance thereof, are also illegal and without any basis. The estimate of turnover are also arbitrary and without any basis. For the initiation of proceeding under Section 21 of the Act there should be a relevant material relating to years under consideration on the basis of which, a belief can be formed about the escaped assessment. In the present case at the time of survey dated 11.6.1992 no material was found relating to the years under consideration. Thus, initiation of proceedings under Section 21 of the Act are without any material and hence illegal.
In the result, all the aforesaid four revisions are allowed. Order of the Tribunal is set aside and the orders passed under Section 21 of the Act are quashed.
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