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TMI Blog1990 (1) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal seriously erred in relying on the evidence of the witnesses in examination-in-chief, when they had realised from the same in cross-examination? (5) Whether the Tribunal had flouted the principles of Criminal Jurisprudence in throwing the burden on the applicants to prove their innocence? (6) Whether the Tribunal seriously erred in ignoring vital piece of evidence in the form of expert opinion of SASMIRA on flimsy grounds? (7) Whether the Tribunal erred in interpreting electric bills and certificate of SASMIRA? (8) Whether the Tribunal erred in ignoring the evidence of the witnesses supporting the case of the applicants? (9) Whether the conclusion to which the Tribunal came is such as no reasonable person could come? (10) Whether in the facts and circumstances of the case, the Tribunal had been prejudiced by simultaneously disposing of another appeal by common order? (11) Whether the Tribunal erred in interpreting the letter of Dy. Assessor and Collector (Octroi) regarding R forms, when there is no rule to support the claim? (12) Whether the Tribunal seriously erred in relying on Crystal Picture note book when the author of the same had admitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected and orders of the adjudicating authorities have been confirmed. 5. Heard Shri V.R. Bhatia, the learned advocate for the applicants. He submitted that the order passed by the Tribunal, deserves to be referred to the High Court as several points of law that have arised therein. As all the points urged by Mr. Bhatia are dealt with in detail hereinafter, in order to avoid duplication, we do not deem it necessary to reproduce them here. 6. Mr. C.P. Arya, the learned SDR, on the other hand, submitted that all the points urged by the applicants are factual points, and that no reference need be made to the High Court. For this he relied upon the decision reported in 1988 (17) ECR 447 and also 1988 (35) E.L.T. 671 (Tri.) = 1988 (17) ECR 139. 7. From what has been submitted by Mr. V.R. Bhatia, the learned advocate for the applicants, during the hearing of the Reference Application, the issues involved, on which he seeks the reference to the High Court, can be identified and summarised as under:- (i) Whether in the facts and circumstances of the case, the imposition of penalty was invalid? (ii) Whether the Tribunal has misdirected itself by placing reliance on inadmissible/par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ptember, 1956 ceased to be an honest estimate . It was in view of these circumstances that the Rajasthan High Court took the matter in reference. 10. Mr. Bhatia then referred to the decision of the Supreme Court in Lalchar Bhagat Ambica Ram v. Commissioner of Income Tax reported in 37 ITR 288, where it is held that when a court of fact arrives at its decision by considering material which is irrelevant to the inquiry or acts on materiral partly relevant and partly irrelevant and it is impossible to say to what extent the mind of the court was affected by the irrelevant material used by it in arriving at its decision, a question of law arises. Reading of the facts and circumstances of that particular case, it however transpires that what has weighed with the Supreme Court is the fact that the Tribunal was influenced by the suspicions, conjectures and surmises which were freely indulged by the Income Tax Officers. Following observation of the Supreme Court is most significant: This conclusion of the Tribunal could only be arrived at on the basis that the entries in the books of accounts in regard to the Rokur and the balance in Almirah were correct and represented the true state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot adopting the explanation given by the assessee, had drawn the conclusion that the amount involved was income, and has further held that the assessee was guilty of suppression and liable to penalty under Sec. 28(1)(c) of the Income Tax Act. In the opinion of the Supreme Court, mere rejection of the explanation by itself did not prove the department s charge, and that the department ought to have led some evidence to prove the amount as income. Even in the opinion of the Supreme Court, however, hollowness in the explanation, in itself was a good evidence, but something more was required to bring home the charge, when proceedings under Sec. 18(1)(c) were in the nature of penal proceeding. 14. Considering the ratio of all these decisions, indicate that, when the decision of the Tribunal is based on no evidence, or on mere conjuctures and surmises, or that the Tribunal has overlooked certain basic documents and that has misdirected itself, then the point of law arises. Significantly it may be noted that in the concluding portion of its judgment in Commissioner of Income Tax v. AnwarAli (supra), the Supreme Court has held that in every case, totality of the circumstances have to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garding clandestine removal of processed fabrics without payment of excise duty. 18. As regards the contention of error in interpreting the electric bills and the certificate from SASMIRA, it may be noted that the department, in an attempt to establish that the electricity consumed during the relevant period, indicated that machinery was run for much longer time than was required to run for manufacture of the fabrics shown in their record to have been manufactured. The learned advocate for the applicants submitted that based on the units of electricity shown to have been consumed, the applicants had procured a certificate from SASMIRA, as regards the maximum production that can be had, but the Tribunal has failed to consider the same from its real perspective. 19. The Tribunal has, in para 11.1 of the impugned order discussed this evidence by mentioning that the certificate from SASMIRA was obtained after a period of two years, and that the same did not indicate the condition of the machinery as it existed at the relevant time. The Tribunal has also categorically observed that it was not possible to draw a conclusion that the certificate covered all the machineries. When the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cate, the Tribunal has erred in relying on the Crystal Picture note book, when by adducing some positive evidence, the applicants have established that the entries in the note book was not correct. Plea raised by the applicants was that the figures shown therein were intentionally inflated by the employer at the initiation of one Mr. Rathod, who intended to put the applicants into difficulty, as the said Mr. Rathod was catering some illwill against them. The learned advocate submitted that despite the evidence led to prove that the figures were not correctly reflected, the Tribunal has taken the contrary view, ignoring the evidence led in defence. What the learned advocate possibly intended to convey was that the defence theory ought to have been accepted in toto. The Tribunal, and in that case, all Judicial or Quasi-Judicial Authority, while adjudicating upon any point at issue, has to consider and weigh the probabilities by rival contentions raised by both the contesting parties and has to arrive at its own judicious consideration as to which one is more probable, and which, in the light of other corroborative circumstances available on record, is more acceptable. The Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances, does not appear any ground to hold that the Tribunal has committed any fundamental error in law, so as to warrant any reference to the High Court. 26. The other point urged by the learned advocate is that the applicants have been prejudicially affected on account of joint hearing of both the appeals. From the record, it appears that the learned advocate then appearing for the appellants has not only not raised any objection, but has on the contrary, argued both the appeals simultaneously, and on account of that, both the appeals have come to be disposed of by common judgment. The applicants have not attempted to show at this stage that the facts were contrary. Further from the dealing of both the appeals by the Tribunal, there does not appear any ground to suspect that the Tribunal is prejudiced against the applicants. On the contrary, both the matter appear to have been dealt with on their own merits. 27. Considering all these factors, and also the arguments advanced by the learned advocate, it clearly emerges out that by taking recourse to some of the judgments of the Supreme Court and the High Courts, the applicants desire to take up the matter before the High C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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