2024 (5) TMI 1267 - HC - VAT and Sales Tax

Rejection of appeal filed by applicant - no reasons given for enhancing the turnover - non-consideration of material evidence on record - onus of proof lay on the assessing authority - non-obtaining of any form 31 from the Trade Tax Department - rejection of application for recall which was duly supported by an affidavit and the medical certificate without any cogent reason - proceedings on extraneous consideration. Rejection of appeal filed by the applicant - allowing the cross appeal filed by the Opp. Party, without giving any reasons - HELD THAT - A bare perusal of the impugned order indicates that sufficient reasons have been given in the order for restoration of the assessment made by the Assessing Authority and setting aside the order of the First Appellate Authority, as the order of the First Appellate Authority was based on the sole reason that merely a sum of Rs. 1,510/- was found in the cash box of the petitioner, ignoring the documentary evidence found at the time of survey which clearly establish sale of huge amount of goods on credit. Therefore, it cannot be said that the Tribunal has set aside the order of the First Appellate Authority and restored the order passed by the Assessing Authority without giving any reasons. Non--consideration of material evidence on record - onus of proof - HELD THAT - The Tribunal has taken into consideration the entire material available on record, including the slips found at the time of survey which established large scale sale made on credit by evading payment of tax, and it cannot be said that the Tribunal had passed the order without considering the material evidence available on record. It is also relevant to note in this regard that no documentary evidence in this regard had been adduced by the revisionist. Failure to obtain any form 31 from the Trade Tax Department and is dealing in tax paid goods and the entire purchases were made within the State of U.P. which are verifiable from the purchase vouchers - HELD THAT - The findings of the survey and the material placed by the petitioner could not establish that the revisionist is dealing in tax paid goods only. The revisionist could not produce any documentary evidence regarding purchase of huge quantity of goods and Iron bars. In these circumstances, the claim of the revisionist that it had not obtained any Form 31, is without any basis. Enhancement of turnover determined by the First appellate authority without controverting the findings recorded by the First appellate authority - HELD THAT - The Tribunal has set aside the order passed by the First Appellate Authority, which had been passed without taking into consideration the entire facts and circumstances of the case and which was based on perverse findings and it has restored the well reasoned order of the Assessing Authority and the Tribunal s order cannot be termed as perverse. Enhancement of turnover determined by the First appellate authority merely on the basis that the cash found at the time of survey - HELD THAT - The First Appellate Authority had erred in reducing the amount of tax assessed by the Assessing Authority, which assessment was made after considering the entire record found during survey, including the slips establishing large scale sale of taxable goods on credit by evading payment of tax. In these circumstances, the Tribunal was justified in restoring the order passed by the Assessing Authority after taking into consideration the entire relevant material found during survey, which was not rebutted by the petitioner by submitting any reply to the show cause notice that was issued to him before making the assessment. Ignoring the findings recorded by the First appellate authority wherein each and every parcha seized during the course of survey was duly considered and determined the turnover on the said basis - HELD THAT - It is apparent that the First Appellate Authority had not taken into consideration the sale made by the petitioner on credit by evading tax and had assessed the amount of tax merely on the basis of cash amount found in the cash box. Therefore, the Tribunal was fully justified in setting aside the order passed by the First Appellate Authority and restoring the appeal passed by the Assessing Authority. Rejection of application for recall which was duly supported by an affidavit and the medical certificate without any cogent reason - HELD THAT - The appellant had sufficient knowledge of filing of the appeal as the same was filed by itself. The learned counsel for the appellant had attended the proceedings of appeal on some earlier dates but on the date of its decision, his counsel neither appeared before the Tribunal, nor did he seek an adjournment. In these circumstances, the provisions contained in the proviso appended to Rule 68(4) are attracted and the Tribunal was justified in proceedings to decide the second appeal ex-parte. Proceedings on extraneous consideration - HELD THAT - The Tribunal has proceeded on extraneous considerations and has committed factual and legal errors, the learned counsel for the revisionist could not point out any material to establish the allegation that the Tribunal has proceeded on any extraneous consideration -In COMMISSINER OF SALES TAX, U.P. VERSUS M/S. KUMAON TRACTORS MOTORS 2001 (7) TMI 1283 - SUPREME COURT , the Hon ble Supreme Court has held that Section 11 of the Trade Tax Act confers a limited jurisdiction on the High Court to interfere in the order of the Tribunal only on the question of law and while doing so, this Court cannot re-appreciate the evidence. There appears to be no illegality in the impugned order - Revision lacks merit and the same is hereby dismissed.

Issues Involved:
1. Preliminary Objection on Filing Separate Revisions
2. Validity of the Tribunal's Order
3. Consideration of Material Evidence
4. Dealing in Tax Paid Goods and Form 31
5. Enhancement of Turnover by the Tribunal
6. Basis of Tax Assessment by the First Appellate Authority
7. Application for Recall of Ex-Parte Order
8. Allegation of Extraneous Considerations by the Tribunal

Summary:

1. Preliminary Objection on Filing Separate Revisions:
The learned Additional Chief Standing Counsel raised a preliminary objection that the petitioner should have filed two separate revisions for the two second appeals decided by a common judgment. The petitioner did not dispute this objection. However, since the revision was admitted on 22.01.2009, the Court decided to proceed on merits in the interest of justice.

2. Validity of the Tribunal's Order:
The revisionist challenged the order dated 16.10.2008 passed by the Trade Tax Tribunal, which restored the assessment made by the Assessing Authority and set aside the order of the First Appellate Authority. The Tribunal found that the First Appellate Authority had reduced the tax liability based solely on the cash found in the petitioner's cash box, ignoring documentary evidence of large-scale credit sales.

3. Consideration of Material Evidence:
The Tribunal considered the entire material on record, including slips found during the survey indicating large-scale sales on credit. The revisionist failed to produce any documentary evidence to refute these findings. Thus, the Tribunal's order was based on a thorough examination of the evidence.

4. Dealing in Tax Paid Goods and Form 31:
The revisionist claimed to deal only in tax-paid goods and had not obtained Form 31. However, the findings of the survey and the material placed by the petitioner did not establish this claim. The revisionist could not produce documentary evidence for the purchase of goods, making the claim baseless.

5. Enhancement of Turnover by the Tribunal:
The Tribunal set aside the First Appellate Authority's order, which had reduced the tax liability without considering the entire facts and circumstances. The Tribunal restored the well-reasoned order of the Assessing Authority, which had assessed the tax liability based on the entire record found during the survey.

6. Basis of Tax Assessment by the First Appellate Authority:
The First Appellate Authority had assessed the tax based on the cash found in the petitioner's cash box, ignoring the sale of goods on credit. The Tribunal found this basis invalid and restored the Assessing Authority's order, which considered the entire relevant material.

7. Application for Recall of Ex-Parte Order:
The petitioner claimed to have filed an application u/s 22 of the Trade Tax Act for recalling the ex-parte order dated 16.10.2008. However, as the revision was admitted for final hearing, the application for setting aside the ex-parte order lost its significance. The Tribunal proceeded ex-parte as per Rule 68(4) of the U.P. Trade Tax Act 1948 due to the petitioner's absence despite proper notice.

8. Allegation of Extraneous Considerations by the Tribunal:
The petitioner alleged that the Tribunal proceeded on extraneous considerations and committed factual and legal errors. However, no material was provided to establish this allegation. The Tribunal's order was based on the entire relevant material, and the petitioner did not refute the allegations in the show cause notice.

Conclusion:
The High Court dismissed the revision, finding no illegality in the Tribunal's order dated 16.10.2008. The Tribunal had considered all relevant material and evidence, and the petitioner failed to provide any substantial refutation. The revision lacked merit and was dismissed.

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