2008 (2) TMI 847 - HC - VAT and Sales Tax

Demand raised under the U.P. Trade Tax Act, 1948 and Central Sales Tax Act - Held that - No evidence having been led by the dealer to explain the difference in stock, the view taken by the authorities below in rejecting the accounts book while determining the liability under the U.P. Trade Tax Act cannot be said to be unjustified. In any case all the three authorities have considered the material on record and have affirmed the rejection of accounts book. Further some relief have been granted by the appellate authority and further more by the Tribunal which is their estimation. This court in revisional jurisdiction is not inclined to make any other estimation. The finding, thus, with regard to rejection of accounts book and estimation of turnover being pure finding of fact does not call for interference in revisional jurisdiction. The authorities below have not recorded any finding with regard to the ingenuity of the form F. From the perusal of section 6A of the Act, if the burden had been discharged it would be deemed to be stock transfer. Since all the transactions of stock transfer were covered by form F submitted by the dealer and issued by the principal officer of other place after obtaining them from prescribed authority which in this case was the State of Delhi, the claim of the dealer that stock transfer would not have been rejected appears to be correct. Thus, the orders passed by the authorities below with regard to the liability under the Central Sales Tax Act cannot be sustained and are accordingly, set side. Revision relating to the assessment under the Central Sales Tax Act is allowed whereas the revision relating to assessment under the U.P. Trade Tax Act is dismissed.

Summary

Issues:
1. Interpretation of stock transfer as inter-State sale under Central Sales Tax Act.
2. Rejection of accounts book and estimation of turnover under U.P. Trade Tax Act.

Analysis:
1. Central Sales Tax Act:
The dealer, M/s. North Star India Pvt. Ltd., challenged the Trade Tax Tribunal's decision regarding the liability under the Central Sales Tax Act. The assessing authority rejected certain stock transfers claimed by the dealer, treating them as inter-State sales based on a survey report. The assessing officer found documents indicating sales made only from the Noida office, not as stock transfers to the Delhi head office. The dealer explained that the challans found were in an employee's handwriting due to a transfer. The dealer submitted Form F for all transactions, meeting the requirements of section 6A of the Act. As the forms were genuine and fulfilled legal requirements, the rejection of stock transfers as inter-State sales was deemed incorrect. The court allowed the revision under the Central Sales Tax Act, setting aside the previous orders.

2. U.P. Trade Tax Act:
Regarding the rejection of accounts book and turnover estimation under the U.P. Trade Tax Act, discrepancies were found during a survey, with variations in stock register entries. The dealer's explanation for one item was accepted, but no explanation was provided for other discrepancies. The rejection of the accounts book by the authorities was upheld, considering the lack of evidence to explain the differences. While some relief was granted by appellate authorities and the Tribunal, the High Court, in its revisional jurisdiction, declined to interfere with the rejection of accounts book and turnover estimation. Consequently, the revision under the U.P. Trade Tax Act was dismissed.

In conclusion, the High Court allowed the revision related to the Central Sales Tax Act but dismissed the revision concerning the U.P. Trade Tax Act. Any excess amount deposited was ordered to be refunded to the dealer, and no costs were awarded in the matter.