2007 (5) TMI 585 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to Trade Tax Tribunal's order allowing appeal for assessment year 1986-87 based on forged custom certificates for export sale to Nepal.

Analysis:
The case involved a dealer engaged in selling kirana and masala, disclosing a sale of Rs. 8,43,303.38 as export sale to Nepal supported by forged custom certificates. The assessing officer initiated proceedings under section 21 of the U.P. Trade Tax Act, 1948 to assess the escaped turnover after discovering the fabricated documents. Despite multiple adjournments, the dealer did not participate in the reassessment proceedings. The assessing officer subsequently assessed the turnover as local sales and levied trade tax, a decision upheld by the first appellate authority. However, the Trade Tax Tribunal set aside the reassessment order, considering the goods as export sales even if delivered in India, citing a Full Bench decision in National Carbon Co. v. Commissioner of Sales Tax [1969] 23 STC 388.

The High Court analyzed the arguments presented, referencing judgments like Commissioner of Sales Tax v. Ganeshi Lal and Sons [1982] 49 STC 253 (All) and CTT v. Krishna Trading Company [2006] 43 STR 217. It distinguished the Full Bench decision in National Carbon Co., stating it was given in unique circumstances. Due to the absence of evidence proving export outside India and delivery within the State of U.P., the High Court found it challenging to consider such sales as export sales. Consequently, the Court allowed the revision, setting aside the Tribunal's order and dismissing the dealer's appeal.

In conclusion, the High Court ruled in favor of the Commissioner, holding that the Tribunal's order could not be legally sustained. The second appeal filed by the dealer before the Trade Tax Tribunal was dismissed, with no specific order regarding costs mentioned in the judgment.