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The Commissioner Of Trade Tax v. J.Sons Engineering Corporation,Garh Road Meerut - SALES/TRADE TAX REVISION DEFECTIVE No. 225 of 1999 [2006] RD-AH 19441 (16 November 2006)


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


S/S J. Sons Engineering Corporation,

Garh Road, Meerut.             ....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 21.11.1998 relating to the assessment year 1989-90 under the Central Sales Tax Act.

Assessing authority levied the penalty under section 10-B of the Act on the ground that the dealer/opposite party (hereinafter referred to as "Dealer") had purchased round plate, M.S. round and Railway Excel for Rs.2,62,680/- from outside the State of U.P. in respect thereof Form "C" were issued while dealer was not registered for the aforesaid items under Central Sales Tax Act. In reply to the notice, dealer pleaded that it had moved an application in the month of May, 1986 for the amendment in the registration certificate and a certificate of the seller, M/s Somnath Rakesh Kumar, New Delhi dated 27.07.1993 was also filed in which it was certified that Railway excel was round of mild steel. Assessing authority held that the certificate was amended w.e.f. 31.07.1989 while the purchases relates to the period prior to 31.07.1989. Dealer filed first appeal before the Deputy Commissioner (Appeals) Trade Tax, Meerut, who allowed the appeal and set aside the penalty. First appellate authority held that the  dealer is a big firm, engaged in the supply of goods relating to the Railway bridge and the goods which have been purchased against Form "C" have been used in the manufacturing. Dealer has given the application for the amendment in the registration certificate and under the bonafide belief that goods were covered, Form "C" were issued.  According to the first appellate authority even though there may be default but the same is of technical nature and there appears to be no malafide intention. The order of the first appellate authority has been confirmed by the Tribunal.

Heard learned counsel for the parties.

Learned Standing Counsel submitted that both the appellate authorities have deleted the penalty without considering that whether the aforesaid three items in respect of which Form "C" were issued were covered by the registration certificate or not. It has also not been considered that the amendment was made in the registration certificate w.e.f. 31.07.1989, while the purchases were made prior to 31.07.1989 and there can not be any bonafide belief.

Learned counsel for the dealer submitted that application was moved in May, 1986 for the amendment in the registration certificate and it appears that on the basis of the said application amendment was made w.e.f. 31.07.1989 and since the application was moved in the May, 1986, dealer made the purchases of the impugned items against Form "C" during the pendency of the application under the bonafide belief.  

Having heard learned counsel for the parties,  I have perused the order of Tribunal and the authorities below.

Both the appellate authorities have not considered that whether the dealer had in fact moved any application for the amendment in the registration certificate in the month of May, 1986 or not and whether the amendment was made w.e.f. 31.07.1989 in pursuance of said application. It is not clear that under what circumstances, amendment was made w.e.f. 31.07.1989 when the applicant claimed to has moved the application for amendment in the month of May, 1986. This aspect of the matter is relevant to decide the issue to adjudicate the claim of bonafide, while both the appellate authorities have not adjudicated this issue. The authorities concerned should decide whether the goods for which Form "C" were issued were covered under the registration certificate or not and if they are not covered, whether there was any circumstances which lead to a bonafide belief. Since both the aspects of the matter have not been considered by the appellate authorities, order of the Tribunal is liable to be set aside.

In the result, revision is allowed. Order of the Tribunal dated 21.11.1998 as well as the order of the first appellate authority dated 21.01.1994 are set aside and the matter is remanded back to the first appellate authority to decide appeal no.224 of 1993 afresh in the light of the observations made above. First appellate authority is directed to decide the appeal expeditiously.




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