2008 (7) TMI 915 - HC - VAT and Sales Tax

Whether the Tribunal being the last fact finding authority ought to have recorded its own finding, but it has failed to do so. Hence the order passed by the Tribunal is justified? Whether, on the facts and in the circumstances of the case, the Tribunal was justified in fixing sale of rice, i.e., superfine at ₹ 1,54,318 and imposed tax accordingly? Whether, on the facts and in the circumstances of the case, the Tribunal was justified in fixing sales turnover of rice at ₹ 3,50,880? Held that - Tribunal has dismissed the appeals without adverting to the relevant material on record. A bare perusal of the assessment order would show that the account books were rejected by the assessing authority principally on three grounds. Firstly, there was difference in between the return version and the book version. Secondly, shortage of 16.31 quintals rice could not be explained. Thirdly, the dealer has not maintained the account books in respect of straw. As regards the difference in between the return version and the book version, some explanation was given by the dealer and it was for the Tribunal either to accept it or reject it. Without dealing with the said explanation, the Tribunal was not justified in dismissing the appeals filed by the dealer. Non-consideration of the explanation show non-application of mind by the Tribunal. Thus the impugned order of the Tribunal cannot be sustained. Revision allowed.

Summary

Issues:
Challenges to Trade Tax Tribunal's order for assessment year 1997-98 (U.P. and Central) regarding rejection of account books, best judgment assessment, acceptance of disclosed purchases of paddy, fixing sales turnover of rice, and imposition of tax.

Analysis:
The appellant, a rice miller, challenged the Trade Tax Tribunal's order for the assessment year 1997-98. The assessing authority had rejected the dealer's account books and made best judgment assessment orders for U.P. and Central sales. The first appellate authority partially allowed the appeal, accepting the disclosed purchases of paddy as raw material for rice manufacturing. The dealer then filed two second appeals before the Tribunal, leading to the current revisions.

The questions of law raised in the memo of revision included issues like the Tribunal's duty as the last fact-finding authority, the necessity of independent findings, legality of rejecting account books without material, justification of Tribunal's orders, and correctness of fixing sales turnover and imposing tax. The Tribunal's order lacked specific grounds for not accepting the dealer's account books, merely expressing general agreement with the first appellate authority's findings without discussion.

The Tribunal failed to consider the dealer's explanations for discrepancies in the return and book versions, unexplained rice shortage, and lack of account maintenance for straw. The Tribunal's dismissal of the appeals without addressing these explanations indicated a lack of proper consideration. The matter was remanded to the Tribunal for a fresh decision, emphasizing the need for a detailed examination of all factual aspects relevant to the appeal.

The relevance of the first appellate authority's acceptance of paddy purchases and the Department's non-challenge of that finding should have been considered by the Tribunal in determining the turnover. The order was set aside, and the Tribunal was directed to rehear and redecide the appeals in accordance with the law. The revisions were allowed without costs.