2008 (8) TMI 850 - HC - VAT and Sales Tax

Whether, on the facts and in the circumstances of the case, the Trade Tax Tribunal was legally justified to set aside the order of section 21 whereby the inter-State sales were determined on the basis of the information received against the dealer from the check-post which was not verified either from the assessment file or from the account books of the dealer? Whether, on the facts and in the circumstances of the case, the Trade Tax Tribunal was legally justified to quash the order of the first appellate authority whereby the case was remanded back to the assessing officer to pass an order afresh under section 21 after making detailed enquiry in respect of the information received against the dealer by depriving the opportunity of conducting enquiry by the Department? Held that - The learned counsel appearing for the dealer-opposite party could not show from the order of the first appellate authority that any such finding was arrived at by the first appellate authority. On the contrary, the only plea which was raised before the first appellate authority was that proper opportunity of hearing was not afforded. Accepting the said plea, the matter was restored back to the assessing officer to grant a fresh opportunity of hearing. Evidently, no such finding, as assumed by the Tribunal in its order that it was found by the first appellate authority that the said information does not relate to the dealer, was recorded. The Tribunal, thus, proceeded to decide the appeal on presumption and assumption. The order of the Tribunal is perverse as it is based on existence of certain facts which do no exist.

Summary

Issues:
1. Legality of setting aside the order of remand passed by the first appellate authority.
2. Legality of quashing the order of the first appellate authority and remanding the matter back for fresh consideration.

Analysis:

Issue 1:
The case involved a revision filed against the order passed by the Trade Tax Tribunal in connection with reassessment proceedings under section 21 of the U.P. Trade Tax Act, 1948. The Tribunal had set aside the order of remand passed by the first appellate authority. The main contention was whether the Tribunal was legally justified in doing so. The Tribunal based its decision on the assumption that the information in possession of the Department was not related to the dealer, which was not supported by the findings of the first appellate authority. The Tribunal's decision was deemed perverse as it was made on presumptions and assumptions that did not exist in the record. Additionally, the court held that the second appeal before the Tribunal was not maintainable once an order of remand was passed by the first appellate authority without any finding on merit. The Tribunal was considered unjustified in interfering with the first appellate authority's order.

Issue 2:
The second issue revolved around the legality of quashing the order of the first appellate authority and remanding the matter back for fresh consideration. The dealer had contended that no opportunity of hearing was provided by the assessing officer while passing the order under section 21 of the Act. The first appellate authority had set aside the reassessment order and remanded the matter for fresh consideration after granting an opportunity of hearing to the dealer. The Tribunal, however, quashed this order of the first appellate authority. The court found merit in the argument that the Tribunal's finding was against the material on record. It was held that the Tribunal was not justified in interfering with the order of the first appellate authority. Consequently, the revision succeeded, and the order of the Tribunal was set aside, restoring the order of the first appellate authority.

In conclusion, the High Court allowed the revision, setting aside the Tribunal's order and restoring the order of the first appellate authority. No costs were awarded in the matter.