2007 (9) TMI 586 - HC - VAT and Sales Tax

Estimation of turnover - Held that - In the present case, the certificate of the District Supply Officer was filed for the first time before the first appellate authority. The first appellate authority relying upon the said certificate has held that the coal against the allotment had not been purchased and imported by the applicant. Under section 12B of the Act after admitting additional evidence the opportunity of rebuttal should be given but in the present case, no opportunity had been given. It is well-settled principle of law that under section 21 of the Act the burden lies upon the Revenue to prove that there was escaped turnover. The mere information about the allotment is not sufficient to conclude that the coal against the said allotment had been purchased and imported. The assessing authority in order to prove that the coal had been actually purchased and imported against the allotment should make some further enquiry but it appears that no further inquiry was made in this regard. Thus the matter requires a fresh consideration by the assessing officer. The assessing officer may consider the certificate of the District Supply Officer.Revision is allowed.

Issues:
1. Assessment of turnover of coal against allotment.
2. Burden of proof under section 21 of the U.P. Trade Tax Act, 1948.
3. Admissibility of additional evidence before the first appellate authority.
4. Requirement of opportunity of rebuttal under section 12B of the Act.

Analysis:
1. The case involved the assessment of turnover of coal against allotment under section 7 of the Act. The assessing authority estimated the turnover of coals based on the presumption that the allotted coal had been purchased and imported inside the State of U.P. The applicant, engaged in the business of manufacture and sales of bricks, denied importing any coal against the allotment. The Deputy Commissioner (Appeal) set aside the order based on a certificate from the District Supply Officer stating no information about coal import. However, the Tribunal overturned the decision, emphasizing the dealer's burden to prove non-importation of the allotted coal.

2. The Tribunal relied on the decision in Tirugi Narayan Pandey v. Commissioner of Sales Tax, where it was held that the burden under section 12A of the Act lies on the dealer to prove non-importation of allotted coal. The applicant argued that the case was under section 21, and the burden should be on the Revenue to prove actual purchases and import of coal. Citing Vishnu Dutt Sharma v. Commissioner of Sales Tax, it was highlighted that the burden lies on the Revenue to prove coal import under section 21, and mere allotment information is insufficient to establish purchase and import.

3. The admissibility of additional evidence, the certificate from the District Supply Officer, before the first appellate authority was questioned by the Standing Counsel, citing the lack of opportunity for rebuttal by the assessing authority as required under section 12B of the Act. The court acknowledged the failure to provide the opportunity of rebuttal and emphasized the importance of following procedural requirements for admitting additional evidence.

4. The court, after considering the arguments and precedents, concluded that a fresh consideration by the assessing officer was necessary. It was highlighted that the burden lies on the Revenue to prove the actual purchase and import of coal against the allotment. The assessing officer was directed to reevaluate the matter, considering the certificate of the District Supply Officer and conducting further inquiries as deemed necessary, in line with the decisions in Vishnu Dutt Sharma and Tirugi Narayan Pandey cases. The revision was allowed, setting aside the Tribunal's order and remanding the matter for a fresh assessment order.

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