9911796707
TMI Blog2019 (7) TMI 1240X X X X Extracts X X X X X X X X Extracts X X X X ..... me are as below: Sales / Trade Tax Revision No. Second Appeal No. Assessment Year 941 of 2008 237 of 2006 2002-03 (U.P.) 942 of 2008 225 of 2006 2002-03 (U.P.) 2. Since the facts and circumstances in the above noted revisions are similar and/or inter-connected, they were heard together and are being decided by a common order. 3. Heard Sri Praveen Kumar, learned counsel for the applicantsassessee and Sri B.K. Pandey, learned Standing Counsel for the revenue. 4. For convenience, the facts obtaining in Sales/Trade Tax Revision No. 941 of 2008 are being noted. 5. Undisputedly, the assesee is engaged in the activity of running a brick kiln. It was also admitted to the benefits of compounding under Section 7-D of the U.P. Trade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed in the directions issued by the State Government in the order dated 26.02.2004 to limit the extent of compounding on purchase of coal up to any quantity. Therefore, the entire quantity of coal purchased by the assessee as may have been used in the manufacture of bricks etc. stood compounded in view of the provisions of Section 7- D of the Act and the compounding scheme, noted above. 8. Therefore, it is his submission, once the entire liability of tax on the purchase of coal stood compounded, there survive no jurisdiction or occasion for the Assessing Officer to pass an assessment order and to thus subject the assessee to tax on an assumed sale of coal. In this regard, it has been further clarified that there is no allegation or eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see had admittedly purchased 433.25 tonnes of coal in the present year and he had a further opening balance of 700 tonnes, the assessee had available 1133.25 tonnes of coal. Since the assessee disclosed the closing stock of only 30 tonnes of coal, he had clearly sold the balance coal. 11. Since the compounding offered to the assessee was only with respect to the running of the brick kiln and not with respect to the trading activity, the Assessing Authority had rightly subjected the assessee to assessment with respect to the balance quantity of coal sold by him. 12. Having heard learned counsel for the parties and having perused the record, in the first place, under Section 7-D of the Act, the alternative method of assessment of tax liabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee and accept the composition money at fixed rates. In the present case, the Assessing Authority passed an order under Section 7-D of the Act (a copy of which has been annexed with the revision application). It also does not disclose any limitation placed by the Assessing Authority while passing that order to limit the composition offered in respect to liability on the purchase of coal. It only provides for computation of the composition liability in terms of the scheme dated 08.03.2001, noted above. Therefore, it appears that the Assessing Authority had compounded the entire liability of tax on the purchase of entire quantities of coal without any stipulation of limitation as to the quantities which are required for running the brick kiln ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ua the production capacity of the individual brick kiln, the circular of the Commissioner seeks to introduce the stipulation and limit the composition without any authority of law. It is neither binding on the assessee nor it can be enforced against the terms of the composition scheme. 16. The acceptance of the application for composition of the tax liability creates a contract between the revenue and the assessee. Thereafter, both parties are equally bound by it. Neither the assessee nor the revenue authority can be permitted to claim payment of composition money in relation to or proportionate to his actual turnover for the period in question. Thus, whether the actual turnover of the assessee in question goes down or is nil or whether i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lns of similar capacity was much less than that disclosed by the assessee. In this background, it assumes relevance that the order passed under Section 7-D of the Act had never been set aside or revised, in any manner. 19. Thus, there is a complete absence of any evidence or material to reach a conclusion that the assessee had engaged in trading in coal and he was liable to tax on such quantities of coal sold by him. The finding of the authorities is found to be wholly based on surmises and conjectures and not on any cogent material or evidence. 20. In view of the above, the question of law, framed above, is answered in negative i.e. in favour of the applicants-assessee and against the revenue. 21. Accordingly, both the revisions are al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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