2009 (1) TMI 820 - HC - VAT / Sales Tax

Whether on the facts and in the circumstances of the case the Trade Tax Tribunal has rightly accepted the dealer s declared transactions of the stock transfer despite the fact that there was sufficient evidence available on record to establish the impugned transactions to be related with the inter-State sales? Whether on the facts and in the circumstances of the case the Trade Tax Tribunal has properly utilized the material available on record? Held that - This court is of the opinion that this case merited different treatment at the hands of the Tribunal. The facts of this case illustrate a disquieting feature as to how the Tribunal committed grave miscarriage of justice in allowing the appeal straightaway filed by the dealer-opposite party. The things were not as they have been made out by the Tribunal which has resulted in not only grave error of law but even gross miscarriage of justice. The questions raised in the revision are therefore decided in favour of the Department by holding that the Tribunal was not right in accepting the dealer s declared transaction as stock transfer. Appeal allowed. The common order of the Tribunal is set aside and the order of the first appellate authority is modified to the extent that it shall hear and decide the appeals itself afresh.

Summary

The High Court of Allahabad considered two revisions filed by the Commissioner, Trade Tax, U.P., against a common order passed by the Tribunal in two connected Second Appeal Nos. 87 and 88 of 2000 relating to the assessment years 1996-97 and 1997-98. The dispute centered around the rejection of stock transfer of Indian-made foreign liquor by the dealer-opposite party. The assessing authority rejected the claim of stock transfer for significant amounts for both assessment years. The first appellate authority remanded the matter back to the assessing authority for fresh consideration, directing examination of the claim in light of the agreement and other material on record. The Tribunal, however, allowed the second appeals, leading to the Commissioner filing revisions raising questions of law regarding the acceptance of the dealer's declared transactions as stock transfer and the utilization of material available on record.The Commissioner contended that incriminating materials found during a survey at Pilkhani Distillery indicated that the goods were moved outside the State of U.P. in pursuance of orders from purchasers, making it an inter-State transfer rather than a stock transfer. The Commissioner argued that the first appellate authority had not applied its mind and wrongly assumed the transaction to be a stock transfer, leading to the Tribunal's decision being based on unwarranted presumptions. On the other hand, the dealer's counsel argued that the transactions were indeed stock transfers and suggested remanding the matter to the Tribunal for reconsideration if required.The Court found that the first appellate authority had not independently analyzed the facts and had remanded the matter without considering crucial aspects. It noted that the Tribunal had misinterpreted the first appellate authority's order and proceeded to decide the appeal based on incorrect assumptions. The Court held that the Tribunal's decision was flawed and constituted a miscarriage of justice. It concluded that the interest of justice would be served by directing the first appellate authority to decide the appeals afresh based on the material already on record.In light of the above, the Court set aside the Tribunal's order, modified the first appellate authority's order, and directed it to hear and decide the appeals afresh in accordance with the observations made. The revisions were allowed in part, with no order as to costs.