2006 (8) TMI 533 - HC - VAT and Sales Tax

Summary

Issues:
1. Alleged suppression of transactions related to gate passes.
2. Burden of proof on Revenue authority under section 21 of the U.P. Trade Tax Act.
3. Requirement of maintaining stock register and satti bahi by the applicant.
4. Lack of confrontation of documents by Revenue authority.
5. Need for further enquiry by the assessing authority.

Analysis:
The judgment pertains to two revisions under section 11 of the U.P. Trade Tax Act, 1948 challenging the Tribunal's order concerning the assessment year 1991-92 under both the U.P. Trade Tax Act and the Central Sales Tax Act. The applicant, engaged in the business of foodgrains and oil seeds, faced allegations of suppression of transactions based on 31 unverified gate passes out of 90 issued by the Mandi Samiti. The assessing authority estimated the turnover due to the unverified gate passes. Appeals to the Deputy Commissioner (Appeals) and subsequently to the Tribunal were unsuccessful.

The High Court emphasized that the burden of proof lies on the Revenue authority under section 21 of the Act. In this case, the Revenue failed to establish the authenticity of the information received from the Mandi Samiti regarding the 31 gate passes. The court noted discrepancies regarding the requirement for the applicant to maintain stock register and satti bahi, questioning whether such records were necessary for gate pass issuance. The assessing authority was directed to conduct a thorough enquiry, including confronting the Mandi Samiti documents and verifying the association of the gate passes with the applicant.

Consequently, the High Court allowed both revisions, setting aside the Tribunal's order and remanding the matter to the assessing authority for fresh assessment. The applicant was instructed to provide a certified copy of the order to the assessing authority for prompt action after necessary inquiry. The judgment underscores the importance of proper evidence and procedural compliance in tax assessments, ensuring a fair and thorough examination of the facts before reaching a decision.