2010 (11) TMI 871 - HC - VAT and Sales Tax

Determination of the turnover - Held that - The Tribunal has exceeded to its jurisdiction in the absence of any appeal by the Commissioner of Trade Tax in recording the findings that the assessee had not manufactured glass bangles during the year under consideration and under the garb of manufacturing of bangles and sales of glasswares had been suppressed. In view of the above, the order of the Tribunal is not sustainable and is liable to be set aside. In the result, the revision is allowed. The order of the Tribunal dated October 18, 2010 is set aside and the matter is remanded back to the Tribunal to decide the appeal of the assessee afresh on the issue involved in the appeal of the applicant only in accordance to law.

Summary

Issues:
Assessment of taxable turnover for the business of manufacturing glass bangles, rejection of books of account, estimation of turnover, jurisdictional overreach by the Tribunal.

Analysis:
The case involved a revision under section 11 of the U.P. Trade Tax Act, 1948 against the Tribunal's order for the assessment year 2001-02. The applicant was engaged in manufacturing glass bangles, glasswares, and glass tubes. The assessing authority rejected the books of account and estimated the turnover, leading to a dispute. The Joint Commissioner (Appeal) partially allowed the appeal, upholding the rejection of books and estimating the taxable turnover of glass bangles. The appellate authority considered past disclosures and estimated the turnover for the period in question. The Tribunal, in its impugned order, remanded the matter back to the first appellate authority for fresh consideration. The Tribunal questioned the manufacturing and sales of glass bangles for the year under consideration, leading to the present revision.

The applicant argued that the Tribunal overstepped its jurisdiction by concluding that glass bangles were not manufactured during the relevant period based on a survey from 2002. The applicant contended that the survey was irrelevant for the year under consideration and cited a previous court decision to support this claim. The standing counsel supported the Tribunal's order. The High Court noted that no appeal was filed by the Revenue against the first appellate authority's order, making the finding that the applicant manufactured and sold bangles final. The High Court found that the Tribunal exceeded its jurisdiction by making findings on the manufacturing of glass bangles without proper appeal grounds.

Consequently, the High Court held that the Tribunal's order was unsustainable and set it aside. The matter was remanded back to the Tribunal to decide the appeal afresh, focusing only on the issues raised by the applicant in accordance with the law. The revision was allowed, and the Tribunal's order was overturned for reconsideration.