2009 (5) TMI 884 - HC - VAT and Sales Tax

Whether, on the facts and in the circumstances of the case, the Trade Tax Tribunal was justified in not accepting the report of the Valuer which clearly indicates that the investment in the applicant unit was less than ₹ 3,00,000? Whether, on the perusal of the registration certificate issued under the U.P. and Central Sales Tax Act, 1956 the inference drawn by the Tribunal that the applicant has used the challan of some other firm appears to be incorrect? Whether, on the facts and circumstances of the case, the Trade Tax Tribunal was justified in holding that the applicant-firm is closed for more than six months at a stretch on the ground that the applicant has filed no returns under misconception of law? Whether, in any view of the matter the order passed by the Trade Tax Tribunal is illegal and is liable to be set aside? Held that - The contentions of the learned counsel for the assessee that the order of the Tribunal has been passed by ignoring material evidence have substance. The contentions as raised by the learned counsel for the assessee are, therefore, accepted by this court. The matter is remanded to the Tribunal for a fresh consideration. The consideration will be made by the Tribunal on the basis of material, which is already there on record before the Tribunal as well as the entire record, which has been placed before this court. The assessee will be given an opportunity once again to establish his case on the basis of the material, which has been produced in this revision also.

Summary

Issues:
1. Valuation of investment in the applicant unit under U.P. Trade Tax Act, 1948.
2. Incorrect inference drawn from the registration certificate issued under U.P. and Central Sales Tax Act, 1956.
3. Closure of the applicant-firm for more than six months due to misconception of law.
4. Legality of the order passed by the Trade Tax Tribunal.

Issue 1:
The applicant established a new unit for manufacturing wooden and steel furnishings and applied for a certificate under section 4A of the U.P. Trade Tax Act, 1948. The Divisional Level Committee rejected the application due to the investment exceeding three lakhs and the lack of manufacturing activity. The applicant filed a review application claiming the investment was less than three lakhs, supported by a valuation report. Despite a previous revision setting aside the rejection, the Committee rejected the case again. The Trade Tax Tribunal upheld the rejection, stating the investment was over three lakhs. The applicant argued the Tribunal ignored the architect's valuation report and failed to assess the factory area properly. The High Court found the Tribunal erred in dismissing the appeal without considering the evidence, remanding the case for a fresh review based on existing records and additional evidence.

Issue 2:
The Tribunal incorrectly inferred that the applicant used another firm's challan based on the registration certificate under U.P. and Central Sales Tax Act, 1956. The applicant argued that the Tribunal failed to consider the assessment orders for previous years, indicating manufacturing activity. The High Court agreed with the applicant, stating the Tribunal should have based its decision on the assessment orders, remanding the case for a fresh consideration.

Issue 3:
The Tribunal held that the applicant-firm was closed for over six months due to a misconception of law as no returns were filed. The applicant provided assessment orders for previous years, indicating activity. The High Court found the Tribunal erred in not considering the assessment orders, remanding the case for a fresh review based on all available evidence.

Issue 4:
The legality of the Trade Tax Tribunal's order was questioned, with the applicant arguing that material evidence was ignored. The High Court agreed, setting aside the Tribunal's order and remanding the case for a fresh consideration based on all records and additional evidence. The applicant was granted a new opportunity to present their case within a specified timeframe, with the Tribunal instructed to consider all evidence before making a decision.