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2011 (1) TMI 1266
Revision under section 11 of the U.P. Trade Tax Act, 1948 is directed against the order of the Tribunal dated May 22, 2003 for the assessment year 1987-88, by which the Tribunal has confirmed the order of the first appellate authority deleting the penalty levied under section 10A of the Central Sales Tax Act, 1956
Held that:- There was no reason for the first appellate authority and the Tribunal to delete the penalty without setting aside the finding of the assessing authority that there was mens rea in misusing the from C. On the facts and circumstances, in my view, the assessee had issued form C in respect of the impugned goods making the false representation that it was registered for such goods. There was absolutely no bona fide belief on the part of the assessee in issuing the form C. In the present case, the mens rea on the part of the assessee in issuing form C is fully established.
In the result, the revision is allowed. The order of the Tribunal dated May 22, 2003 and the order of the first appellate authority dated April 6, 1999 are set aside and the order of the assessing authority is restored.
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2011 (1) TMI 1265
Whether levy of penalty under section 13A(4) of the Act can be said to be unjustified?
Held that:- None of the authorities below has accepted the explanation put forward by the applicant that it has sold only 9 M.T. bitumen against bill No. 79 dated March 1, 2002 which was being transported in Tanker No. U.P. 81 D-4408 from Agra to Jabalpur and further 10.310 M.T. bitumen was loaded in the said tanker at Mathura, which was purchased by Jabalpur party from Indian Oil Corporation Limited and Tanker No. U.A.C. 9078 had been subjected to break down. Admittedly, at the time of inspection, neither the bill of 19.310 M.T. bitumen was produced nor the bill of 9 M.T. bitumen, claimed to have been sold by the applicant, was produced. Bill No. 7924318 dated February 14, 2002 issued by the Indian Oil Corporation Limited and G.R. No. 597 dated March 1, 2002 were produced. In bill No. 7924318 dated February 14, 2002, Tanker No. U.A.C. 9078 was mentioned. There was nothing to show that the said bill and bilties relate to the goods loaded in the tanker. The driver and khalasi of the tanker in their statements have not stated that the goods of Tanker No. U.A.C. 9078 have been loaded in Tanker No. U.P. 81 D-4408. Admittedly, the entries of 19.310 M.T. bitumen, found at the time of inspection, was not found entered in the books of account of the applicant. In the circumstances, levy of penalty under section 13A(4) of the Act cannot be said to be unjustified.Appeal dismissed.
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2011 (1) TMI 1264
Whether the contractee-Election Department can supersede/override the decision of the taxing authority like respondent No. 5, the Commissioner of Taxes, who is appointed for carrying out the purpose of the Act?
Whether the supply of materials in question comes within the purview of the works contract or is wholly exempted from the purview of VAT in view of the provisions of section 9 read with entry at serial No. 5 of the First Schedule to the Act, 2003?
Held that:- This court is of the opinion that the petitioner is not supposed to pay the VAT against supply of the printing materials to the Election Department in connection with general elections to Lok Sabha, 2009. Consequently, the impugned orders dated April 2, 2009 and April 27, 2009 (annexures F and H, respectively) are quashed and the letter dated September 23, 2009 (annexure-Motor Vehicles Act, 1988) is also set aside. In the result, the writ petition is allowed.
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2011 (1) TMI 1263
Whether the Tribunal failed to look into sub-section (3) of section 21 of the Act which provides that if the notice is served within the period provided under sub-section (2) of section 21 of the Act the assessment order may be made within six months after expiration of such period?
Held that:- Section 21(2) of the Act says that except as otherwise provided in this section, no order of assessment or reassessment be passed after the expiry of two years from the end of such assessment year and further the proviso provided that the Commissioner may authorise the assessing authority to make such assessment or reassessment after the expiration of two years but not after the expiration of six years from the end of such year. Therefore, sub-section (2) provides limitation for eight years for passing the order.
Sub-section (2) is subject to the other provision of the section. It is subject to sub-section (3) which provides that if the notice is served within the period specified in sub-section (2) the assessment may be made within six months after the expiration of such period. In this way sub-section (3) extends six months further period for passing the order.
In view of the above, the order of the Tribunal is erroneous and liable to be set aside. Thus, the Tribunal is required to decide the appeal on the merits. Revision allowed.
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2011 (1) TMI 1262
Whether, in the facts and circumstances of the case, clean air equipment (laminar flow clean air equipment) and accessories thereof are electrical appliances under entry 18, Schedule A of the Act or industrial machinery (general goods)?
Whether the assessee was liable to pay interest under section 25(5) of the Act ibid. in view of the honourable Supreme Court of India judgment in J.K. Synthetics Ltd. v. Commercial Taxes Officer reported in [1994 (5) TMI 233 - SUPREME COURT]?
Held that:- There is no dispute that the equipment in question is run with the electrical energy and provides filtered air. No distinction can be made on the basis of domestic purpose or the industrial purpose for use of the article. We, thus, do not find any reason to take a view different from the one taken by the Tribunal. The question is, thus, answered against the assessee and in favour of the Revenue.
Now coming to question (ii), it is not disputed on behalf of the State that in view of the Constitution Bench judgment of the honourable Supreme Court in J.K. Synthetics Ltd. v. Commercial Taxes Officer [supra] the levy of interest was effective from the date of issuance of demand notice and not from the date of filing of return. The said question, thus, stands answered in favour of the assessee and against the Revenue.
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2011 (1) TMI 1261
When an appeal in MTA No. 106 of 2008 filed by the petitioner in regard to the levy of tax of ₹ 77,656 (rupees seventy seven thousand six hundred and fifty six only) and the penalty levied for ₹ 92,568 (rupees ninety two thousand five hundred and sixty eight only) are pending before the Sales Tax Appellate Tribunal, (AB) Madurai, then it is not open to the second respondent/Deputy Commercial Tax Officer, Virudhunagar, to issue prerevision notice dated April 24, 2008 in reference Asst. No. 5720959/97-98 and the same is per se illegal in the eye of law.
Held that:- Inasmuch as the appeal filed by the petitioner in MTA No. 106 of 2008 before the Sales Tax Appellate Tribunal (AB), Madurai is pending as on date and since the same has not been disposed of till date, this court is of the considered view that it is not open to the second respondent/Deputy Commercial Tax Officer I, Virudhunagar, to issue the pre revisional notice dated April 24, 2008 claiming tax due on the wilful non-disclosure at ₹ 77,656 and the penalty proposed at 150 per cent as per section 16(2) of the Act at ₹ 1,16,484 and the same is per se illegal and invalid one.
Resultantly, this court exercises its inherent power under writ jurisdiction and sets aside the pre-revision notice dated April 24, 2008 issued by the second respondent and allows the writ petition to prevent an aberration of justice.
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2011 (1) TMI 1260
Whether the appellant has sold parched groundnut or unparched groundnut?
Held that:- In view of undisputed legal position that the parched groundnuts are different from groundnuts and were not covered by the category of declared goods, mere fact that the Tribunal held to the contrary, in a particular case, is not a ground to interfere with the impugned order.
The petition is dismissed.
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2011 (1) TMI 1259
Whether the petitioner did not record rest of the purchases in his books of accounts and thus concealed the transactions with a view to avoiding payment of taxes under the 2005 Act?
Held that:- The authorities below have manifestly erred in holding the petitioner guilty of concealment and in making the impugned orders under section 32(1) of the 2005 Act. In absence of any independent material connecting the petitioner with the alleged transactions we need not remand the matter to the assessing officer to consider the matter afresh.
As we have held the impugned orders to be manifestly wrong, made on surmises and conjectures, in absence of any valid material the petitioner need not be relegated to avail of the alternative remedy of statutory appeal before the Tribunal. Appeal allowed.
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2011 (1) TMI 1258
Revision under section 11 of the U.P. Trade Tax Act, 1948 against the order of the Tribunal dated November 25, 2010 for the assessment year 2007-08
Held that:- No explanation has been given at the time of survey about the shortage. It has not been told that the stocks were lying in some other room. If it would have been told to the surveying officer that the stock was lying in another shop, the same would have been verified. Therefore, any explanation offered by the applicant that the stock was lying in another room has rightly been rejected by the assessing authority and by the Tribunal. The stock has been valued at ₹ 2 lcas.Therefore, having regard to the value of the stock, which was not found at the time of survey, the estimate of turnover at ₹ 5 lacs of the manufactured tobacco and the purchases of raw materials from the unregistered dealer cannot be said to be excessive or without any basis. However, the Tribunal has erred in levying the tax on the turnover of chemicals @32.5%. Under the Notification No. KA. NI.-2-1084/XI-9 (51)/99................dated 25.2.2003 all kinds of chemicals are liable to tax @4%. Therefore, the order of the Tribunal is modified to this extent. The authorities below are directed to recalculate the turnover levying the tax on the chemicals @4% instead of 32.5%. Revision allowed in part.
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2011 (1) TMI 1257
Issues involved: Two revisions u/s 11 of the U.P. Trade Tax Act, 1948 challenging the Tribunal's order for the assessment year 1993-94 under the U.P. Trade Tax Act, 1948 and the Central Sales Tax Act, 1956.
Details of the Judgment:
Issue 1: Allegation of non-production of manufacturing account
The applicant, a manufacturer of carpets, had purchased carpets from an unregistered dealer and claimed export against form H. The assessing authority rejected the books of account due to alleged non-maintenance of the manufacturing account. The Deputy Commissioner (Appeals) and the Tribunal upheld this decision. The applicant contended that the books of account were produced before the assessing authority. The High Court noted that the show-cause notice only mentioned the non-production of the manufacturing account, not other books of account. Referring to legal precedent, the Court emphasized the mandatory nature of maintaining the manufacturing account. As the reason for estimating turnover was not provided, the Court directed the Tribunal to reconsider the matter and allowed the revisions.
Issue 2: Estimation of turnover and tax levy
The assessing authority estimated the taxable turnover within U.P. at Rs. 5 lakhs and inter-State sales at Rs. 14,87,960. The applicant disputed this estimation, arguing that there was no basis for it. The Court observed that the Tribunal did not provide a rationale for the turnover estimate under both the U.P. Trade Tax Act and the Central Sales Tax Act. Citing legal precedent, the Court emphasized the necessity of maintaining accurate accounts. The Court set aside the Tribunal's order and remanded the case for fresh consideration, allowing the revisions.
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2011 (1) TMI 1256
Whether the Tribunal has already granted stay to the extent of 90 per cent, therefore, no further interference is called for?
Held that:- Having regard to the facts that no assessment order has been passed and present is the case of penalty and considering the entire facts and circumstances and financial hardship, the order of the Tribunal requires little modification. As per order of the Tribunal, the applicant is required to deposit ₹ 29,45,129. In case if the applicant deposits ₹ 15 lacs within a period of one week, the recovery proceeding for the balance amount shall remain stayed till the disposal of appeal. The appellate authority is further directed to decide the appeal expeditiously preferably within a period of four weeks from the date of presentation of a certified copy of this order.
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2011 (1) TMI 1255
Whether ENA manufactured by the applicant is rectified spirit?
Held that:- It is necessary to examine whether ENA, which is claimed to be purified rectified spirit containing 98 per cent alcohol and is not fit for human consumption ceases to be rectified spirit. No enquiry or investigation has been made in this regard by the authorities below. Therefore, in my view, the matter requires reconsideration.
In the result the revision is allowed. The order of the Tribunal dated November 22, 2006 is set aside and the matter is remanded back to the Tribunal to decide the appeal afresh in the light of the observations made above.
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2011 (1) TMI 1254
Issues involved: Challenge to penalty order u/s 28A(2)(a) of Karnataka Sales Tax Act.
The Karnataka High Court heard a State's petition against the Karnataka Appellate Tribunal's decision to quash a penalty order imposed by a check-post officer. The goods in question were under transit from Maharashtra to Tamil Nadu, passing through Karnataka. The Tribunal found no liability to pay tax under the Karnataka Sales Tax Act, as the goods were not intended for Karnataka. The penalty was imposed for failure to present necessary documents at the entry check-post, as required by section 28A(2)(a) of the Act. The first appellate authority reduced the penalty to 50%, leading to the second appeal before the Tribunal.
The Karnataka Appellate Tribunal, after considering the facts, concluded that there was no tax liability under the Karnataka Sales Tax Act for the transaction in question. It emphasized that there was no attempt to evade tax owed to Karnataka. The Tribunal also noted that discrepancies in documents related to the inter-State sale did not impact the penalty under the Karnataka Sales Tax Act. The Court upheld the Tribunal's decision to set aside the penalty, as there was no evidence of tax evasion or non-payment when there was no tax liability under the Act.
In the final analysis, the High Court found no grounds to interfere with the Tribunal's well-reasoned decision. It clarified that the case did not involve any attempt to evade tax or non-payment when no tax liability existed under the Karnataka Sales Tax Act. Consequently, the Court dismissed the petition, stating that there were no merits to support a different outcome.
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2011 (1) TMI 1253
Whether BIEC, an exhibition-cum-sale hall is a building where accommodation is provided for marriage or reception or matters related therewith and functions are conducted in such halls regularly or not, is a "marriage hall" within the definition of the said term under section 2(5B) liable to be impost under section 3C of the Act?
Whether letting out BIEC on hire, for exhibition-cum-sale, is a luxury, meaning services ministering to enjoyment, comfort or pleasure extraordinary to necessities of life, within section 2(4B) attracting the impost under section 3C of the Act?
Whether, in the facts and circumstances, the luxury tax levied and demanded in the notices, annexures G, G1 and L, on the rental income from hiring BIEC and for services rendered therein are legal, valid and sustainable?
Held that:- The meaning of "marriage hall" in section 2(5B) of the Act, is thus comprehended to include halls, building or part of the building where accommodation is provided for the purpose of marriage, reception or matters related therewith.There can be no rigidity that an exhibition-cum-sale hall ex hypothesi be considered to fall within the meaning of section 2(5B) of the Act. The question in each case should be, whether in the light of the cumulative facts, as established, an exhibition-cum-sale hall is a building or a part of the building where accommodation is provided for marriage or reception or matters related therewith, whether functions are conducted in such halls regularly or not? the amendment as also the decision in Godfrey Phillips India Ltd.’s case [2005 (1) TMI 391 - SUPREME COURT OF INDIA].
In the result, the petitions are allowed. The proceedings initiated by the respondents, culminating in the notices, annexures G, G1 and L, impugned, are quashed.
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2011 (1) TMI 1252
Whether in the instant case, it cannot be said that the demand made by the respondent in Indian currency towards imports cannot be considered as part of purchase price due to increased payment and therefore, he set aside the order passed by the appellate authority and restored the order passed by the assessing officer?
Held that:- From the material on record, it is not clear, what was the purchase price on the day the order was placed. It is also not clear what is the amount paid by the bank and what is the exchange rate on the date of such payment. In the absence of that crucial material it is not possible to come to any conclusion in that regard. We see full force in the submission made by the learned Government Advocate. Therefore, it would be appropriate to set aside all these orders and remand the matter back to the assessing officer so that the appellants would be free to place all relevant materials and then the assessing officer shall pass appropriate orders after carefully going through the said material. That would meet the ends of justice. Appeal allowed by way of remand.
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2011 (1) TMI 1251
Whether rate of tax on the inter-State sales of iron kamani, which is a declared commodity under section 14 of the Central Act, whether it is liable to tax at the rate of four per cent or at the rate of two per cent?
Held that:- The submission of learned counsel for the assessee, that in view of section 15(b) of the Central Act the tax has rightly been levied at the rate of two per cent is misconceived. Section 15(b) does not apply in the present case for the reason—(1) that it contemplates the reimbursement of the tax paid under the State law and (2) in the present case the assessee is the manufacturer of kamani. Kamani has not been sold at any stage in the State of U. P. and no tax was levied and paid on the turnover of kamani under the U. P. Trade Tax Act.
In the result, the order of the Tribunal is liable to be set aside and the order of the assessing authority is liable to be restored so far as it levies the tax on the inter-State sale of kamani at the rate of four per cent.
Accordingly, the revision is allowed
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2011 (1) TMI 1250
Whether the interpretation placed by the learned single judge on section 3D is correct or not?
Held that:- All the writ appeals are allowed.The interpretation placed by the learned single judge in so far as section 3D is concerned, is hereby set aside.
Consequently, all the assessment orders passed by the authorities are restored. However, the orders imposing liability prior to March 1, 2003 cannot stand and consequently, it is set aside. If there are no assessment orders passed yet, the authorities are at liberty to issue proposition notices, hear the clubs and pass the assessment orders in accordance with law
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2011 (1) TMI 1249
Whether the suit is filed within the period of limitation?
Do the plaintiffs prove that they are entitled to recover wharfage, demurrage and another charges as claimed in the plaint?
Do the plaintiffs prove that they are entitled to recover interest at the rate of 15% per annum as demanded in the plaint?
What Decree?
Held that:- Taking into consideration last free date as 18-1-1985 and the date of filing the suit as 11-1-1988 and accepting the contention that the cause of action arose on 18-1-1985 the suit is filed within the period of limitation. Accordingly, point No. 1 is answered in the affirmative.
Point No. 2 is answered in the affirmative and the plaintiffs will be entitled to recover monies as per the final order. So far as Point No. 3 is concerned, I hold that the plaintiffs would be able to recover interest at the rate of ₹ 12% per annum as per the final order. So far as the point No. 4 is concerned, plaintiffs would be entitled to decree as per the operative part.
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Thus Defendants do pay to plaintiffs ₹ 103352. 42p. Defendants do pay to plaintiffs interest at the rate of 12% per annum on ₹ 103352. 42p from 31-10-1987 till realization.Defendants do pay to plaintiffs costs of this suit.
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2011 (1) TMI 1248
Whether a benefit given by a statutory notification can be withdrawn by the Government by another statutory notification and whether the principles of promissory estoppel would be applicable in a case where concessions/rebates given by a statutory notification are subsequently withdrawn by another statutory notification? - Held that:- Appeal dismissed.The petitioners cannot raise plea of estoppel against the notification dated August 7, 2000 reducing Hill Development Rebate to 0% as there can be no estoppel against the statute.
Whether the term stipulated in the contract entered into between the petitioners and the U.P. State Electricity Board (now the Corporation) stipulating that the respondent No.2 would give 33.33% rebate to the petitioners, is legally enforceable and whether in view of the said term the respondent No.2 precluded from changing the tariff rates? - Held that:- This Court does not find any prohibition in the agreement by which the respondent No.2 was bound to give 33.33% rebate to the petitioners in all the circumstances or was precluded from changing the tariff rates. The petitioners being parties to the agreement now cannot turn around and argue that the respondent No. 2 is bound to give 33.33% Hill Development Rebate and can never change the tariff rates to the detriment of the petitioners. On the facts and in the circumstances of the case, therefore, this Court holds that the respondent No. 2 is not bound to give 33.33% Hill Development Rebate to the petitioners for the period specified in the notification irrespective of change in the tariff rates.
Whether the Court of law would be justified in interfering with the policy decision of the Government either to grant or not to grant rebate to certain industrial units? - Held that:- What is relevant to notice is that if the power to reduce the rebate to 17% is assumed to be available, then power to reduce the rebate to 0%, as is done by the notification dated August 7, 2000, is also available. The petitioners have not challenged previous judgment of the High Court wherein this Court has held that the rebate would not be available/cannot be given after coming into force of the U.P. Electricity Reforms Act, 1999. The petitioners have also not challenged the tariff rates made applicable from September 16, 2001 to March 31, 2002 vide order dated September 1, 2000 by the U.P. Electricity Regulatory Commission, wherein no rebate based on geographical area has been provided. The discussion made above makes it very clear that the petitioners have not been differently treated nor the tariff is sought to be recovered in any illegal or arbitrary manner. Under the circumstances, this Court does not find breach of the salutary provisions of Article 14 of the Constitution. As no right guaranteed to the petitioners under Article 14 of the Constitution is found to have been breached, the present petition filed under Article 32 of the Constitution cannot be entertained and the petitioners are not entitled to the reliefs claimed in the instant petition. Therefore, the petitioners are precluded from challenging notification dated August 7, 2000 withdrawing the rebate in electricity rates.
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2011 (1) TMI 1247
Addition u/s 69 of the Act - Unexplained investment – Held that:- against the claim of assessee that the amounts received as advanced were deposited with the bank-the Tribunal ordered revenue to examine the genuineness of the agreement and the transaction – since revenue examined the agreement in compliance to the direction of the Tribunal and the AO has not exceeded his jurisdiction – The summons were returned as unserved - Revenue officers deputed for examination found that no such person exists - No material was available on record to contradict the findings recorded by the Revenue about the existence of the persons who said to have given the advances - existence of the persons is doubtful and not proved the agreement as well as the transaction cannot be genuine - Decided against assessee.
Receipt as capital receipt - since this was the first year of assessment – Held:- assessee was carrying on the business from earlier without filing of the return of income - When the genuineness of the transaction as well as the agreement was found to be doubtful and the persons said to have advanced the money were not in existence the revenue rightly made the addition u/s 69 of the Act. - Decide against assessee.
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