2006 (8) TMI 567 - HC - VAT and Sales Tax

Summary

Issues:
- Rejection of claim of exemption on purchases made for and on behalf of ex-U.P. principal
- Assessment under U.P. Trade Tax Act and Central Sales Tax Act
- Remand of the case by the Tribunal for fresh assessment

Analysis:
The case involved two revisions under section 11 of the U.P. Trade Tax Act, 1948, challenging the Tribunal's order related to the assessment year 2000-01 under the U.P. Trade Tax Act, 1948, and the Central Sales Tax Act, 1956. The applicant claimed to be a purchasing agent who made purchases of wheat for an ex-U.P. principal. The assessing authority raised objections regarding the verifiability of the purchases, lack of details, and absence of purchase orders for bardana. The assessment orders were passed, rejecting the claim of purchases made for the principal and levying taxes under both Acts. Appeals were rejected by the Joint Commissioner, leading to second appeals before the Tribunal.

The Tribunal set aside the orders of the lower authorities and remanded the case back to the assessing authority for fresh assessment. The applicant argued that the Tribunal's remand was unjustified as detailed inquiries had already been made during the assessment proceedings. The Tribunal's decision to remand was based on the need to verify if purchases were made on the instructions of the principal and if goods were dispatched accordingly. The court reviewed the orders and found that the assessing authority had not doubted the nature of purchases and dispatches, as evidenced by the assessment under the Central Sales Tax Act. The court held that the remand for a fresh assessment was not justified, although the Tribunal could examine the books of account to determine the correlation between purchases and dispatches.

Citing legal precedents, the court emphasized the need for remand to be based on sound judicial principles and not for providing another chance to the department to make a new case. Previous cases highlighted that remand should only occur for strong reasons when the authority cannot decide the matter on merits. The court concluded that the Tribunal's order was liable to be set aside, directing the Tribunal to decide both appeals on merit according to the law. Consequently, both revisions were allowed, the Tribunal's order was set aside, and the Tribunal was instructed to decide the appeals on merit in accordance with the law.