2006 (7) TMI 628 - HC - VAT and Sales Tax

Summary

Issues involved:
Challenging turnover determination based on survey for multiple assessment years. Interpretation of relevant case law for turnover assessment. Validity of tax liability based on survey findings.

Analysis:
The judgment pertains to four trade tax revisions filed against a common order by the Trade Tax Tribunal for assessment years 1984-85, 1985-86, 1986-87, and 1987-88. The assessing authority determined the turnover based on a survey conducted in 1987, leading to tax liability imposition on the assessee. The first appeals were partly allowed, reducing the turnover and tax liability. Subsequently, second appeals filed by the assessee were dismissed by the Trade Tax Tribunal in 2006.

The assessee contended that the survey conducted in 1987 should not impact the turnover assessment for previous years, citing relevant case law. It was argued that without additional evidence of incorrect turnover disclosure in previous years, the assessed turnover could not be revisited. The department, however, justified the turnover enhancement based on the assessee's statement of 12 years in business. The Tribunal's decision was challenged under section 11 of the U.P. Trade Tax Act.

The court analyzed the case law referenced by the assessee, emphasizing the relevance of a survey date to the assessment years it pertains to, especially without other incriminating evidence of sales suppression. Noting the lack of additional material apart from the 1987 survey, the court found the turnover assessment and tax liability for 1984-85, 1985-86, and 1986-87 unsupported by evidence and subsequently quashed the assessment orders, allowing the trade tax revisions for these years. However, for the assessment year 1987-88, where the turnover enhancement was based on survey findings, the court upheld the decision, dismissing the trade tax revision for that year.