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TMI Blog1999 (4) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... the control of production, supply and distribution of trade and commerce in certain commodities. In pursuance of the Act, the Government of Uttar Pradesh promulgated the U.P. Coal Control Order, 1977 to regulate trading in coal and distribution of this essential commodity in a proper manner. In all these cases, the dealers revisionists had claimed that they worked as commission agents for the purchases of coal for them and charged commission. Coal is imported from places outside the State of U.P. like Dhanbad in Bihar from where it is transported by motor truck to the places where these revisionists carry their business. The truck hire is claimed to have been paid directly by the buyers to the transporters on the arrival of the goods and, therefore, the truck hire was not included in the turnover by the dealers. The books of accounts were rejected and the turnover was determined by best judgment assessment by estimating the quantity of coal imported, the purchase price thereof, the freight and other charges incurred thereon and the margin of profit expected to be earned by the revisionist. The contention that the truck hire is not includible in the turnover was rejected by the aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e business and Sub-clause (ii)(A) regulates the price of coal. This clause stands as under : (ii)(A). The Coal agent shall not sell coal at rates higher than those fixed from time to time by the District Magistrate in the following manner-- , (a) F.O.R. Colliery price actually paid by the dealer; (b) Central and State Sales Tax or any other taxes' ceases and duties at rates applicable at the time of sale; and (c) Handling charges at such rate per metric ton of coal as may, from time to time, be fixed by the State Government. Sub-clause (B) of Rule 8 provides that a Coal agent shall not sell coal to any person who does not hold a licence issued under this Order. 7. As stated above, the revisionists are licensees in Form B. Form B is as under : LICENCE IN FORM 'B' Licence for wholesale dealer of coal (coal agent) for soft coke and slack coal for domestic consumption and use by brick kilns under the Uttar Pradesh Coal Control Order, 1977. (1) Register no....... Licence no.......... (2) Name of the Licensee.................. (3) Business address...................... (4) Exact location of the place of storage if it is different from the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to other licensee in Form 'C' and 'D' in the district and if such coal or any part thereof cannot be sold in the district within the next 24 hours, may, with the previous approval of the Licensing Authority, sell it to the licensees of other districts of U.P. 9. The licensee shall not refuse to sell or withhold from sale any coal in his possession in such quantities at such time, to such persons and in such manner as the Licensing Authority may, by written order, direct. 10. The licensee shall charge the price of coal from the purchasers only at the time of or after the sale and not before. 11. The licensee shall render all reasonable facilities to persons authorised by the Licensing Authority for inspection of his premises, stock and accounts. 12. The licensee shall render all reasonable facilities to furnish correctly such information as may from time to time be demanded from him and shall carry out such instructions as may, from time to time, be given to him, by the Licensing Authority. 13. Any contravention of these conditions by the licensee or by his agent or servant will render the licence liable to cancellation without prejudice to any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below that the revisionists effected the purchases and sale on principal to principal basis and not as commission agent for the buyers is correct and cannot be interfered with in revisional jurisdiction. 9. The learned Counsel for the revisionists, however, contended that since the truck hire or freight has not been paid by the revisionists and under the terms of the Control Order, they could not change freight from the buyers, the same could not be treated as part of the turnover. Turnover has been defined in Section 2(i) of the Act which is as under : 'turnover' means the aggregate amount for which goods are supplied or distributed by way of sale or are sold by a dealer, either directly or through another, on his account or on account of others, whether for cash or deferred payment or other valuable consideration : Explanation I (omitted) Explanation II-- Subject to such conditions and restrictions, if any, as may be prescribed in this below- (i) the amount for which goods are sold or purchased shall include the price of the packing material in which they are packed, and any sum charged for anything done by the dealer in respect of the goods sold, at the ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent only discharges the obligation of the seller i.e. the dealer respondent. This Court was conscious of the fact that freight inwards and freight outwards have different aspects so far as the determination of turnover was concerned. That is why it noticed that there was a lot of controversy between the parties whether the freight is inward freight for bringing coal inside U.P. to the depot of the respondent-dealer or it is an outward freight when the respondent sold the coal inside U.P. If both types of freights were to be treated alike, there was no need for having the controversy or for remanding the matter to the Tribunal for settling that controversy. Therefore, in my view, the direction of this Court contained in para 5, which is certainly ambiguous, should have been read in the light of the law on the point and the definition of turnover, as contained in the Act. 7. In Mc Dowell and Co. Ltd. v. Commercial Tax Officer, 1985 UPTC 747 (SC) : (1985) 154 ITR 148 : (AIR 1986 SC 649), the Hon'ble Supreme Court dealt with a similar controversy relating to payment of excise duty. In that case, the vendor i.e. Mc Dowell and Co, Ltd. asked its buyers to pay the excise duty dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate in respect of each town, area of a town or village; (5) Wastage and shortage allowance at such rates as may be fixed by the District Magistrate but subject to a maximum of 12 1/2 per cent in the case of soft coke and 10 per cent in the case of steam coal and hard coke, as calculated on price; (6) Profits the rate of 10 per cent as calculated on items (1) to (5) above, It is pointed out that while the coal agent can charge only (1) FOR colliery price actually paid, (ii) necessary tax, and (iii) handling charges as fixed by the State Govt., a retailer i.e. a coal depot holder can charge Railway freight from his buyers. Since Railway freight is not specifically mentioned in respect of the constituents of price to be charged by a coal agent, it is contended that a coal agent is prohibited from charging freight from a buyer. Reliance is placed on a decision of learned single Judge of this Court in Commissioner of Sales Tax v. Anil coal Corporation, 1987 (2) UPTC 1092 and Bhartiya Coal Traders v. State of U. P., UPTC 778 (sic). The learned single Judge observed as under :-- So Clause 8(ii)(A) of the Order, 1977, clearly shows that the coal agent was debarred from selli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oal agent. It was on these facts that it was held that the freight what was directly paid by the allottees could not be included in the turnover of the coal agent. The facts of the present case are different. The revisionists transported coal by motor trucks. It is not their case that the coal that was transported was not owned by them. In fact the very fact that they sold the goods, is a loud proclamation of the fact that they were the owners of the goods, otherwise as already observed there was no question of any sale by them and they could not be taxed even with regard to the price of coal excluding the truck hire. 13. The aforesaid Rule, therefore, cannot be used in support of the contention that the truck hire that is claimed to have been paid directly by the purchasers was not includible in the turnover of the revisionists. 14. It may be mentioned that the learned Standing Counsel contended that the Coal Control Order, 1977 was not applicable to steam coal and hard coal for industrial consumption. For this view, reliance was placed on Waseem Adil Khan v. State of U.P., 1993 (2) EFT 327 and Singh Co. v. State, 1989 ALJ 987, in which it was held that the provisions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the total coal imported was 3312 M.Ts. He estimated a turnover of ₹ 47,04,000/-. The Dy. Commissioner (Appeals) reduced the quantity of coal imported to 2737 M.T., which was the quantity declared by the assessee, and estimated the turnover at ₹ 18,27,00/-. On the Commissioner's appeal, the Tribunal estimated the quantity of coal at ₹ 3000/- M.T. and estimated the purchase price at ₹ 19,80,000/- and freight at ₹ 5,52,000/- and added thereto ₹ 8 lacs towards estimated loading and unloading charges and the profit. All these are matters of fact. So far as the estimate of the purchase price of the coal and the freight is concerned, though the same were claimed to be excessive by the learned Counsel, I do not find any ground for interfering with this finding of fact. However, as regards the addition of ₹ 8 lacs towards the loading and unloading, charges and profit, the same is patently arbitrary. Loading and unloading, charges of coal would be very nominal and the bulk of the addition is, therefore, for the profit only which is almost 30% of the cost. Such huge profit could not have been permitted by the District Magistrate who determines th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing such a high rate of profit in respect of an essential and controlled commodity. Since there is no cogent material from either side, a reasonable estimate should be made and looking to the extent of the business, it would be proper to estimate the profit at 10% of the cost that would give a profit of ₹ 5.5 lacs. Therefore, the total turnover for this year can reasonably be estimated at ₹ 71.50 lacs. The revision petition for assessment year 1993-94, will, therefore, stand partly allowed and the Tribunal's order will stand modified to the extent that the turnover of the dealer for this year would be estimated at ₹ 71.50 lacs. 21. Now we come to the last revision petition of this dealer i.e. TTR No. 68/99. That relates to assessment year 1994-95 and is directed against the Tribunal's order dated 13-11-98 passed in cross appeals No. 145/96 and 146/96. 22. For this year the dealer had declared purchases of coal for ₹ 35,51,693/- and the turnover at ₹ 36,88,471/-, thereby earning a gross profit of ₹ 36,778/- only. In this year 7353 M.T. of coal was imported and sold. On first appeal, the learned Dy. Commissioner (Appeals) reduced the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M.T. of coal was imported. He, therefore, estimated the turnover at ₹ 45 lacs without giving any bifurcation of details. On appeal, the Commissioner (Judl.) reduced the turnover to ₹ 33,20,635/-. The learned D.C. (Appeals) estimated that 15 M.T. coal was imported in each truck and thus the total import through 575 trucks was of 8625 M.T. of coal. He estimated the purchase price at ₹ 350/- per. tonne to arrive at a figure of ₹ 30,18,750/-. He estimated a profit of 10% thereon and arrived at a turnover ₹ 33,20,625/-. On Second Appeal Nos. 919/90 and 1069/90 preferred by the dealer and the Commissioner, respectively, the Tribunal dismissed them by the impugned order dated 30th October, 1998. The main contention of the learned Counsel Sri Alok Kumar regarding the estimate of the turnover was that there was no warrant for assuming that 15 tonnes of coal was imported in each truck and, therefore, the quantity of coal as shown by the dealer should have been accepted. 26. The only reason given by the authorities below is that in one truck 14.37 tonnes of coal was imported and that certain other dealers had been importing more coal per truck. This dealer to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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