2013 (1) TMI 692 - HC - VAT and Sales Tax

Due diligence by bringing the form C on record - Held that - As it is not in dispute that for the first time, the form C has been received by the revisionist on April 5, 2008 when the second appeal is pending before the Tribunal, so prior to the said date, the revisionist was not in possession of the form C and after receiving he immediately moved an application in order to bring the same on record. So, the said exercise on his part is within the ambit and scope of due diligence , thus he is entitled to get the benefit of the provisions of sub-section (ii) of section 12B of the Act. Hence, the impugned order dated September 16, 2009 passed by the Tribunal in second appeal thereby not giving benefit to the said section to the revisionist to bring on record the form C is an action contrary to law, liable to be set aside.

Summary

Issues:
Controversy over the dismissal of a second appeal and application under section 12B of the U.P. Trade Tax Act 1948 due to the non-inclusion of form C, the correctness of the actions of the Tribunal, and the application of the principles of due diligence.

Analysis:

The judgment delivered by the High Court of Allahabad in this case involved a detailed examination of the events surrounding the assessment order for the year 2004-05, the subsequent appeal, and the dismissal of a second appeal along with an application under section 12B of the U.P. Trade Tax Act 1948. The revisionist, represented by counsel Pradeep Agrawal, challenged the Tribunal's decision to dismiss the second appeal and refuse to entertain the application under section 12B. The revisionist argued that the Tribunal's actions were contrary to the provisions of the Act and cited a previous judgment by the court to support the claim.

The Court, after considering the arguments presented by both parties, delved into the provisions of section 12B of the Trade Tax Act. It highlighted that the assessee has the right to adduce additional evidence only under specific circumstances, such as when the assessing authority wrongly refused to accept it or when it was not within the knowledge of the assessee. The Court emphasized that the appellate authority may entertain additional evidence only if these conditions are met and after providing an opportunity for rebuttal and challenge to the Department.

In this case, the Court found that the revisionist received form C for the first time during the pendency of the second appeal before the Tribunal. The revisionist promptly moved an application to bring the document on record, demonstrating due diligence as required by the Act. Therefore, the Court concluded that the revisionist was entitled to the benefit of the provisions under section 12B, specifically sub-section (ii), and the Tribunal's decision to not allow the inclusion of form C was deemed contrary to the law and was set aside.

The Court referenced a previous judgment to reinforce its decision, emphasizing the importance of verifying the correctness of form C before allowing the benefit of a concessional rate of tax. Consequently, the Court set aside the Tribunal's order and remanded the matter for expedited reconsideration in accordance with the law. Ultimately, the Court allowed the revision with the aforementioned observations, providing relief to the revisionist in this case.