2010 (7) TMI 942 - HC - VAT and Sales Tax

Order passed by the Additional Commissioner Trade Tax Aligarh under rule 6(5) and 6(7) of the Rules by which he has appointed the Assistant Commissioner (Assessment) Trade Tax Aligarh as the assessing authority of the petitioner challenged Held that - So far as the exercise of the power under rule 6(5) and rule 6(7) is concerned we are of the view that the said power can be exercised on a consideration of the prima facie material that the person is a dealer. Whether a person was only a transporter or he was carrying on business of buying and selling of goods also and is a dealer is the matter of final adjudication which can be adjudicated by the assessing authority in the assessment proceedings. In the assessment proceedings it will be open to the petitioner to adduce the evidence in support of its claim. Therefore we are of the view that the order passed by the Additional Commissioner under rule 6(5) and 6(7) is a legal order and does not require interference. Appeal dismissed.

Summary

Issues:
Challenge to order appointing assessing authority under rule 6(5) and 6(7) of the Rules.

Detailed Analysis:
The petitioner challenged the order appointing the Assistant Commissioner (Assessment) as the assessing authority under rule 6(5) and 6(7) of the Rules. Initially, an objection was filed by the petitioner, leading to a fresh order being passed. Subsequently, a writ petition was filed against the fresh order, which was entertained by the court. The court stayed the operation of the order, allowing the Additional Commissioner to pass a fresh order. In compliance with the court's order, the impugned order dated March 30, 2001, was issued.

The petitioner contended that they were a transporter and not a dealer as defined under the U.P. Trade Tax Act. The petitioner argued that no material was found during a survey to establish that they were engaged in buying and selling activities. The petitioner further emphasized that the mere deposit of security for some transactions should not categorize them as a dealer. Additionally, the inability to disclose consignor and consignee details should not lead to the petitioner being treated as a dealer.

The standing counsel countered the petitioner's arguments by highlighting incriminating documents found during a survey, the lack of available documents for goods found, and the petitioner's failure to disclose consignor and consignee details. The standing counsel argued that these factors indicated the petitioner's involvement in buying and selling activities, justifying the order passed by the Additional Commissioner.

The court considered the submissions and reviewed the impugned orders and related documents. It noted the petitioner's claim of being solely a transporter but found sufficient evidence to suggest involvement in buying and selling activities based on the survey findings. The court emphasized that the assessing authority could determine whether the petitioner was exclusively a transporter or also engaged in buying and selling during the assessment proceedings. The court concluded that the order under rule 6(5) and 6(7) was legal and dismissed the writ petition.

In essence, the judgment delves into the distinction between being a transporter and a dealer, emphasizing the need for a thorough assessment to ascertain the nature of the petitioner's business activities. The court upheld the legality of the order appointing the assessing authority, highlighting the importance of evidence and adjudication in determining the petitioner's status as a dealer.