High Court of Judicature at Allahabad
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M/S Motor Industries Company Limited v. The Commissioner Of Trade Tax, Uttar Pradesh, Lucknow - SALES/TRADE TAX REVISION No. 1569 of 2006  RD-AH 19197 (14 November 2006)
Court no. 22
Trade Tax Revision no. 1569 Of 2006.
Motor Industries Company Ltd., Ghaziabad. ... Revisionist.
The Commissioner, Trade Tax, U. P. Lucknow..... Opp. Party
Hon'ble Rajes Kumar, J.
Present revision under section 11 of the U.P. Trade Tax Act (hereinafter referred to as the "Act") is directed against the order of the Tribunal dated 26th September, 2006 arising from the seizure proceedings.
The brief facts of the case-giving rise to the present case are that the applicant is a Public Limited Company having its registered office at Bangalore. Applicant claimed to have four manufacturing Units situated at Bangalore, Nagnathpura, Nasik and Jaipur. It has 18 Regional Offices located in various capitals and four Zonal Sales Offices located at Mumbai, Delhi, Calcutta and Chennai. Applicant has its Sales Depot throughout the country in every States where the stocks are transferred from the factories as well as from the Depots. Applicant is registered in the State of U. P. as well as under the Central Sales Tax Ac with the Deputy Commissioner (Assessment), Lucknow, the Principal Office being at Lucknow and a Branch Office at Ghaziabad. Applicant deals in Engine Oil.
Applicant had sold Engine Oil to M/S Sant Motors, Ambala Road, Saharanpur against 3 invoices no. 74286, 74287 and 74292 dated 28.6.2006. The goods were dispatched on 29.6.2006 against G. R. no. 15768 dated 29.6.2006 while the goods were in transit from Ghaziabad to Saharanpur, it was intercepted by the Trade Tax Officer (Mobile Squad), Trade Tax, Meerut on 29.6.2006. The Vehicle was detained and a Show-cause-notice was issued on the ground that G. R. no. 15768 dated 29.6.2006 was prepared by Transport Company while the invoices were dated 28.6.2006 and 20% tax was charged on the lesser amount than on the actual turnover. Applicant filed reply to the Show-cause-notice on the aforesaid two grounds which were not accepted and the seizure order was passed on 05.7.2006. Against the seizure order, applicant filed an application under the proviso to Section 13-A (6) of the Act, which was rejected, vide order dated 28.7.2006. Being aggrieved by the order dated 28.7.2006, applicant filed appeal under Section 10 of the Act before the Tribunal. The Tribunal by the impugned order confirmed the seizure of the goods and the demand of security on the ground that the transactions were not properly accounted for in the books of account. The Tribunal was of the view that the invoices relating to the goods were not properly issued and the less tax have been shown in the invoices on the lesser turnover than the actual turnover. The Tribunal was of the view that from the total turnover, which was claimed to be maximum retail price, discount was deducted and the amount of trade tax was also deducted and thereafter, on the balance value, tax has been charged. By way of example, the Tribunal referred the format of invoice which is as follows:-
Printed invoice no. 74286 74287 74292
Dei;wVj tujsVsM buokblua0 32135065 32135,066 32135071
UsV oSY;w vkQ nh ijksMDVVzsM VSDl 20 ijlsUV 4,28,038.40 85,607.685,13,646.08 74,889.2014,979.8489,879.04 1,20,729.60 24,145.921,44,875,52
,sM fMLdkmUV ,sUM ,fM'kuy fMLdkmUV ,ykmM 1,55,163.926,68,810.00 27,150.961,17,030.00 43,764.481,88,640.00
Heard learned Counsel for the parties.
Learned Counsel for the applicant submitted that the Tribunal in its impugned order has categorically recorded the finding that the impugned transactions were duly found entered in the stock register and ledger. He submitted that the claim of the applicant was that maximum retail price was fixed by the Company to make the selling price uniform throughout the country, which included the amount of discount and local trade tax and therefore, while making the invoices from the maximum retail price firstly the amount of discount amount was deducted and thereafter the amount of trade tax was deducted and thereafter, on the net value, the trade tax was charged. He submitted that the method adopted by the applicant, may not be correct to the satisfaction of the officer concerned, but it is matter of adjudication at the stage of assessment but on this ground, the goods cannot be seized. He submitted that there are two conditions for the seizure of the goods provided under Section 13-A (1-A) namely, the goods are not traceable to the bonafide dealer and are not properly accounted for. In the present case, goods were traceable to the bonafide dealer and were also accounted for, thus seizure was not justified. In support of his contention, he relied upon the decisions of this Court in the cases of Commissioner of Trade Tax Versus M/S Shyam Ji Traders, Agra reported in 2003 UPTC page 123, Commissioner of Trade Tax versus S/S Delhi Calcutta Carrying Corporation reported in 2003 UPTC, page 929 and the Division Bench decision of this Court in the case of M/S Shaw Scott Distilleries Pvt. Ltd., Rampur and another versus Sales Tax Officer, Check Post Mobile Squad, Mathura and others reported in 1983 UPTC page 387. He also placed reliance on the Circular dated 17.3.2006 and 27.9.2006 issued by the Commissioner of Trade Tax. Learned Standing Counsel relied upon the order of the Tribunal.
Having heard learned Counsel for the parties and have perused the order of the Tribunal and the authorities below.
The Tribunal in the impugned order has categorically recorded the finding that the impugned transactions were duly recorded in the stock register and ledger which were produced before them. No case has been made out by any of the authorities that the goods were not accounted for in the books of account. In respect of the goods, invoices were raised which were duly found available at the time of inspection of the goods. Thus, it cannot be said that the goods were not properly accounted for. The dealer had adopted a method for issuing invoices namely from the maximum retail price first to deduct the discount amount and then trade tax payable and then on the net amount, charged the tax. This method, adopted by the dealer had been doubted by the authorities concerned. Doubt of authorities concern may be corrected, but this aspect of the matter requires adjudication at the time of assessment proceedings. In the Circular dated 17.3.2006 and 27.9.2006, the Commissioner of Trade Tax directed the authorities concerned that in case of registered dealer where there is doubt of evasion of tax, the copy of Bill, Challan etc. may be sent to the Assessing Officer with the necessary endorsement in this regard for final adjudication and the goods may not be seized. In this view of the matter, the seizure of the goods cannot said to be justified. The authorities concern is directed to release the goods forthwith without any security and immediately refer the matter to the Assessing Officer to take necessary action in the matter.
With the aforesaid direction, the revision is disposed of.
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