1999 (4) TMI 607 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Inclusion of truck hire in the turnover.
2. Rejection of books of accounts and estimation of turnover.
3. Specific estimates of turnover for different assessment years.

Issue-wise Detailed Analysis:

1. Inclusion of Truck Hire in the Turnover:
The primary issue in these revision petitions is whether the truck hire is includible in the turnover. The revisionists, who are coal merchants, contended that they acted as commission agents and that truck hire paid directly by the buyers should not be included in their turnover. However, the authorities below rejected this contention, holding that the dealers did not establish that they acted as agents and that truck hire was indeed paid by the purchasers. The Tribunal upheld the inclusion of the estimated truck hire in the turnover, invoking the principle laid down by the Supreme Court in Mc Dowell and Company Ltd. v. CTO, 1985 UPTC 747: (AIR 1986 SC 649).

The court noted that the revisionists are licensees in Form B under the U.P. Coal Control Order, 1977, which regulates trading in coal. The license conditions require coal agents to "sell" coal, indicating that they operate on a principal-to-principal basis rather than as commission agents. The court emphasized that the provisions of the Control Order and the lack of evidence from the revisionists supported the authorities' findings that the revisionists purchased and sold coal on their own account.

The court further explained that under Section 2(i) of the U.P. Trade Tax Act, 'turnover' includes the aggregate amount for which goods are supplied, including any sum charged for anything done by the dealer in respect of the goods sold, at the time of or before delivery, other than the cost of freight or delivery when separately charged. The court referenced a similar case, CST v. Sharma Coal Company, 1999 UPTC 62, where it was held that freight paid by buyers, which was the legal burden of the seller, was includible in the seller's turnover.

2. Rejection of Books of Accounts and Estimation of Turnover:
The books of accounts were rejected by the authorities due to discrepancies and the failure to include the truck hire in the turnover. The court found no argument challenging the rejection of the books of accounts and the returned turnover. The rejection was deemed justified as the expenditure on freight was not included in the turnover, necessitating a best judgment assessment.

3. Specific Estimates of Turnover for Different Assessment Years:
- Assessment Year 1990-91 (TTR No. 65/99): The Tribunal estimated the turnover at Rs. 47,04,000/-, which was reduced to Rs. 27,00,000/- by the court, considering the addition of Rs. 8 lacs towards loading, unloading charges, and profit as arbitrary.

- Assessment Year 1992-93 (TTR No. 36/99): The Tribunal upheld the estimate of Rs. 4,40,000/- as no illegality was pointed out, leading to the dismissal of the revision petition for this year.

- Assessment Year 1993-94 (TTR 67/99): The Tribunal's estimate of Rs. 87 lacs was reduced to Rs. 71.50 lacs by the court, finding the profit estimate of 33% excessive and adjusting it to a reasonable profit of 10%.

- Assessment Year 1994-95 (TTR No. 68/99): The Tribunal's estimate of Rs. 1.05 crores was reduced to Rs. 85 lacs by the court, considering a reasonable profit of around 8%.

- Assessment Year 1982-83 (TTR No. 63/99): For M/s. Pathak Coal Agency, the court found the estimate of 15 M.T. coal per truck arbitrary and reduced the turnover to Rs. 24,47,550/-, accepting the dealer's declared quantity of 6993 M.T.

Conclusion:
The court upheld the inclusion of truck hire in the turnover, validated the rejection of books of accounts, and provided revised estimates for the turnover for various assessment years, ensuring the estimates were reasonable and based on available evidence. The court's detailed analysis emphasized adherence to statutory provisions and principles laid down in precedent cases.