2004 (12) TMI 686 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Legitimacy of tax levied based on non-surrender of Form 34 under Section 28-B of the U.P. Trade Tax Act.
2. Validity of evidence used by the Assessing Authority, specifically Panji-3 and G.Rs.
3. Compliance with procedural requirements by the revenue authorities.
4. Rebuttal of presumption under Section 28-B of the Act by the applicant.
5. Tribunal's decision on the classification of "parchun goods."

Detailed Analysis:

1. Legitimacy of Tax Levied Based on Non-Surrender of Form 34:
The primary issue revolves around the presumption under Section 28-B of the U.P. Trade Tax Act, which states that if Form 34 is not surrendered at the exit check post, it is presumed that the goods have been sold within the state. The applicant contended that the vehicles and transactions in question did not belong to it, and no evidence was provided to establish a connection between the applicant and the alleged Form 34.

2. Validity of Evidence Used by the Assessing Authority:
The assessment orders were based on entries in Panji-3, a register maintained at the entry check post, and not on the actual Form 34 or G.Rs. The applicant argued that Panji-3 was not signed by the driver or vehicle in charge and thus could not be presumed to be accurate or binding. The Tribunal upheld the tax levy based on the information from Panji-3, but the court found this reliance insufficient without confronting the applicant with Form 34 or G.Rs.

3. Compliance with Procedural Requirements:
The Deputy Commissioner (Appeals) had remanded the case, directing the Assessing Authority to verify whether G.Rs were issued by the applicant. However, the Assessing Authority failed to present Form 34 or G.Rs to the applicant, violating procedural requirements. The court emphasized that it is obligatory to confront the applicant with Form 34 or any signed document to prove the connection.

4. Rebuttal of Presumption:
The Supreme Court in M/s Sodhi Transport Co. upheld that the presumption under Section 28-B is rebuttable. The applicant has the opportunity to displace the presumption by leading evidence. In the present case, the applicant denied any connection with the vehicles or Form 34 and requested to see the G.Rs, which were not provided. Thus, the presumption of sale within the state could not be sustained without proper evidence.

5. Tribunal's Decision on "Parchun Goods":
The Tribunal had deleted the tax levy on "parchun goods," stating that there is no such category under the Trade Tax Act. The court acknowledged that while "parchun goods" are not explicitly defined in the Act, they are commonly understood as general merchandise. However, since Form 34 and G.Rs were not confronted, the Tribunal's order did not require interference.

Conclusion:
The court allowed revision nos. 1459, 1461, 1462, 1463, 1465, 1466, 1467, and 1468 of 1991, setting aside the Tribunal's orders due to the lack of proper evidence and procedural compliance. However, revision nos. 1460 and 1464 of 1991 were dismissed as Form 34 was confronted to the applicant and no evidence was provided to rebut the presumption. The revisions filed by the Commissioner of Trade Tax (nos. 1502, 1503, and 1504 of 1991) were dismissed, maintaining the Tribunal's decision due to the lack of confrontation of Form 34 and G.Rs.