2019 (5) TMI 1220 - HC - VAT and Sales Tax

Invocation of Section 10-B of U.P. Trade Tax Act - revision by Commissioner - validity of assessment order - it was alleged by Deputy Commissioner (Executive) that the order of assessment was bad as the same has been passed by the assessing authority completely ignoring the inquiry report as well as the survey report - HELD THAT - No case is made out to interfere as the finding recorded by the Deputy Commissioner (Executive) as well as by the Tribunal are finding of fact and are based on the material found at the time of inquiry and survey, which was not at all considered by the assessing authority while passed the assessment order. The Deputy Commissioner (Executive) rightly invoked the provision of Section 10-B. Revision dismissed.

Summary

Issues: Assessment under U.P. Trade Tax Act for the year 1999-2000, validity of assessment order, revision under Section 10-B of the Act, turnover estimation, tax liability determination, failure to produce books of account, variation in stock records, ownership of goods found during inquiry and survey, appeal to Tribunal, judicial review of Deputy Commissioner's order.

Analysis:
The case involved a revision under Section 10-B of the U.P. Trade Tax Act for the assessment year 1999-2000. The applicant, a commission agent in food grains and vegetables, disclosed a gross sale of ?10,24,863 and a net sale of ?3,62,193, admitting a tax liability of ?10,812.72. The assessing authority accepted the disclosed turnover and books of account but later found discrepancies during an inquiry and survey. An inquiry revealed goods loaded on a truck belonging to the applicant's brother, with no satisfactory explanation provided. Subsequently, a show cause notice was issued, and the Deputy Commissioner initiated proceedings under Section 10-B based on the inquiry and survey findings, estimating the turnover at ?16,70,193 with a tax liability of ?66,807.

The Deputy Commissioner found that the assessing authority had ignored the inquiry and survey reports, leading to an erroneous assessment order. Notably, the applicant failed to produce books of account for verification during the survey, and discrepancies were observed in the stock records. The Deputy Commissioner concluded that the goods found during the inquiry and survey belonged to the applicant, leading to the revision of the assessment order. The Tribunal upheld the Deputy Commissioner's decision, prompting the applicant to file a revision before the High Court.

Upon review, the High Court found no grounds to interfere with the Deputy Commissioner and Tribunal's findings, considering them as factual and based on evidence from the inquiry and survey. The Court affirmed the Tribunal's decision, dismissing the revision. The judgment highlights the importance of considering all relevant material and facts during assessments, emphasizing the need for accurate record-keeping and compliance with tax laws to avoid disputes and revisions under the statutory provisions.