2006 (1) TMI 572 - HC - VAT and Sales Tax

Summary

Issues:
Challenging order of Tribunal relating to assessment years 1986-87 and 1987-1988 under U. P. Trade Tax Act, 1948.

Analysis:
The applicant, engaged in coal business, maintained various books of account for purchase and sale. However, the assessing authority rejected the books of account and increased the turnover, which was upheld by the first appellate authority. Subsequent appeals to the Assistant Commissioner and Tribunal were also dismissed. The Tribunal found deficiencies in the maintenance of accounts, such as the absence of a cash book and incomplete details in purchase vouchers. Notably, the Tribunal highlighted an instance where coal was not lifted despite a delivery order being issued, with no supporting evidence provided by the applicant.

The learned counsel for the applicant referenced a previous court ruling where it was held that if purchases and sales are verifiable from other maintained books of account, the absence of certain records like rokar and khata should not lead to the rejection of the entire accounting. The counsel argued that the submissions made in response to objections raised by the assessing authority were not adequately considered by the Tribunal.

Upon review, the court acknowledged the counsel's arguments and referred to the previous ruling to emphasize that the rejection of books of account should not be solely based on the absence of specific records if other books provide verifiable purchase and sale information. The court directed the Tribunal to reevaluate the verifiability of transactions from other records and consider the applicant's explanations for the objections raised by the assessing authority before deciding the appeals again.

Consequently, the court allowed both revisions, set aside the Tribunal's order, and remanded the matter back to the Tribunal for a fresh assessment in line with the court's directions. The Tribunal was instructed to thoroughly examine the verifiability of transactions from other books of account and consider the applicant's responses to objections, ensuring a fair and comprehensive review of the case.