9911796707
TMI Blog2013 (9) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... ment was vitiated by non-application of mind and non-recording of the reasons in the order passed by the Additional Commissioner, Grade-I u/s 21 (2) of the Act – order set aside – Decided in favor of assesse. - Writ Tax No. 862 of 2006 - - - Dated:- 13-1-2012 - Sunil Ambwani And Mr. Manoj Misra, JJ. JUDGMENT 1. We have heard Shri Bharat Ji Agarwal, Senior Advocate assisted by Shri Piyush Agrawal for the petitioner-company. Shri U.K. Pandey, learned Standing Counsel appears for the respondents. 2. The petitioner-company is aggrieved by the order dated 3/4.3.2006 passed by the Additional Commissioner, Trade Tax, Kanpur and the consequential order dated 31.3.2006 passed by the Deputy Commissioner (Assessment)-IV, Trade Tax, Kanpur with regard to refund of the tax deposited by the petitioner for the assessment year 1999-2000 for reassessment under Section 21 (2) of the UP Trade Tax Act. 3. The petitioner, a Public Limited Company with its registered office at 463, Dr. Annie Besant Road, Mumbai, engaged in manufacturing of tyres, tubes and flaps in its factories at Bhandup-Mumbai and Nasik, from where the goods are transferred to its depots situated within the State of UP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 in which it was mentioned, that inasmuch the entire turnover of the company has been assessed, and even according to the department neither any turnover had escaped assessment to tax nor has been under-assessed or assessed to tax at a lower rate, or any deductions or exemptions have been wrongly allowed, hence the refund, which was allowed in the original assessment, is not covered by Section 21 of the Act. The assessing authority has no jurisdiction to disallow the refund, which was deposited by the petitioner in excess of tax assessed. 7. Shri Bharat Ji Agarwal, learned counsel appearing for the petitioner submits that the seller having refunded to the purchaser by the credit note and the purchaser have already received the amount from seller, the purchaser cannot longer be entrusted for making any refund to the assessment authority of the amount, hence in view of Agra Enterprises Allahabad vs. Trade Tax Officer, Allahabad 1997 UPTC 763 the assessing authority correctly refunded the amount of tax to the petitioner, which was deposited with the department. He submits that under Section 21 of the Act, that re-assessment can be made, if any turnover had escaped assessment to tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 006 U.P.T.C., 1128 and M/s S.K.Traders v. Additional Commissioner, Grade - I, Trade Tax, Zone Ghaziabad and another, (Civil Misc. Writ Petition No.483 of 2002), decided today, [since reported in 2007 NTN (volume 34) 343] reasons have to be assigned by the Additional Commissioner while granting sanction/ approval for initiating proceeding under Section 21(2) of the Act. As no reason has been assigned, the authorisation/ sanction dated 12.7.2001 cannot be sustained and is hereby set aside. As the authorisation itself has been set aside, the proceedings taken in pursuance thereof also cannot be allowed to stand and are set aside." 9. Shri Bharat Ji Agrawal submits that in case of executive orders such as the present one the reasons must be given to serve the principle of natural justice. He submits that reasons are the soul of the orders and unless reasons are given both for the purposes of exercising jurisdiction and informing the party for initiating the action, the order should not be sustained. He submits that in the present case the impugned order under Section 21 (2) dated 4.3.2006 does not contain any reason. The Additional Commissioner has referred the recommendation of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and 17 of the counter affidavit, which are quoted as below:- "6. That in reply to the contents of paragraph no. 9 of the writ petition it is submitted that the petitioner has failed to establish that the deduction of discount in the sale price allowed to the customers of the petitioner (whole sellers) has reached to the consumer as the petitioner has not filed any details of the sale price on which the tyre and tube has been sold to the whole sellers (customers of the petitioner) as well as the sale price of which the whole seller has sold tyre and tube to the consumer, therefore, it cannot be said that the sale price as fixed for consumer included the deduction of trade discount as proved by the petitioner. 8. That in reply to the contents of paragraph nos. 11 to 13 of the writ petition it is submitted that since tax had been realized from the customers and the alleged refund to the whole sellers and the benefit of the same has not reached to the consumer which according to the decision of the Hon'ble Supreme Court in the case of Mafatlal Industries Ltd. vs. Union of India (SC 9-J.B. (1998) 111 STC- 467) and Sahkari Khand Udyog Mandal Ltd vs. Commissioner of Central Excise a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal turnover. He has disclosed a sum of Rs. 2, 73, 35, 045.13 as discounts by credit note on the taxable goods and Rs. 10, 29, 509.00 as credit notes for tyres and tubes which are exempt from tax. The assessing officer also observed that the trader has produced the documents relating to credit note. The company has in accordance with the policy in the assessment year issued price variation additional discounts, special discounts, turnover discounts, cash on delivery discount and promptness discount to its purchaser and accordingly issued credit note for which the trader has kept the detailed accounts and which were verified. The discounts by credit note are given in the normal course of business, which is not part of turnover under Section 2 (i) of the Act and Rule 44 of the Rules. The assessing authority thereafter relied upon Deputy Commissioner of Sales Tax (Law) vs. M/s Motor Industries Co. 1983 (53)S.T.C. 48; M/s Baidnath Ayurved Bhawan Pvt. Ltd. vs. Commissioner, Sales Tax, UP 1970 (26) S.T.C. 171; Commissioner of Trade Tax vs. M/s Indian Farmers Fertilisers Co. Ltd. 1993 (90) S.T.C. 23 and M/s Aicher Good Earth Ltd vs. Commissioner, Trade Tax, UP 1995 (99) S.T.C. 130 in whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the credit, a reference is made to the judgment of Supreme Court in M/s Sahkari Khand Udyog Mandal Ltd vs. C.C.E. 3 J.B. Dated 9.3.2005 in which it is provided that at the time of refund, it is necessary to examine whether the burden of excess amount of tax has been born by the assessee or has been transferred to the consumers or the burden of the excess amount has been directly born by any other person. 15. The petitioner gave its reply to the notice on 03.3.2006 after quoting Section 21 and the legal position that the reason to believe must be based on certain material, which should be examined by the assessing authority. It was stated that in M/s Sahkari Khand Udyog Mandal Ltd. vs. CCE (supra) the refund of excess duty was denied to the assessee because of specific provisions existing under Section 11-B of the Central Excise Act, 1944 on the basis of the concept of unjust enrichment. The Valuation Laws of Central Excise and Sales Tax are altogether different and therefore, the decision of the Supreme Court under the Central Excise Act could not be made applicable to the case, which is based upon a provisions of U.P. Trade Tax Act. The purchase of price has been defined und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted. We do not find any good reason to accept the new defence, which was neither the basis of initiating the proceedings nor the order of sanction given by the Additional Commissioner. 19. In this case the assessing officer proceeded with the reassessment in pursuance to the order of sanction dated 4.3.2006 and has made the assessment on 31.3.2006 in which the petitioner or his representative did not participate. The writ petition was filed on 8.5.2006 much after the order of reassessment was made on 03.3.2006 and in which the Deputy Commissioner in proceeding for reassessment held that the petitioner has not produced any evidence of returning the discounts to the consumers. The tax can be returned in view of M/s Sahkari Khand Udyog Mandal Ltd. vs. CCE (supra), only if the amount has been actually returned to the consumers. The Deputy Commissioner held, in ex-parte proceedings that since the amount has not been returned to the consumers and that the trader and the purchaser have only exchanged credit note, the amount of excess deposit of tax could be refunded. The Deputy Commissioner directed recovery of the entire refunded amount from the petitioner, which was actually adjusted ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
