Concurrent factual findings and tax exemptions limited by proof of use and prior purchase tax payment

Concurrent findings of fact in revision will not be disturbed absent perversity, and the assessee's challenge failed on that basis. Diesel oil bought at concessional rate against Form 3 Kha remained liable under the U.P. Trade Tax Act because the unit was closed, the oil was not shown to have been used in manufacture or machinery maintenance, and no supporting records were produced. Sale of bagasse was also taxable because the exemption relied on applies only where purchase tax on sugarcane has actually been paid; here, that factual foundation was missing.

---

---

Issues: (i) Whether liability under Section 3-B of the U.P. Trade Tax Act, 1948 could be sustained in respect of diesel oil purchased on concessional rate against Form 3 Kha when the manufacturing unit was closed and the assessee failed to prove use of the diesel oil in manufacture or maintenance of machinery. (ii) Whether sale of bagasse was liable to tax where the assessee had not paid purchase tax on sugarcane under Section 13 of the U.P. Sugarcane (Purchase Tax) Act, 1961.

Issue (i): Whether liability under Section 3-B of the U.P. Trade Tax Act, 1948 could be sustained in respect of diesel oil purchased on concessional rate against Form 3 Kha when the manufacturing unit was closed and the assessee failed to prove use of the diesel oil in manufacture or maintenance of machinery.

Analysis: The assessee admitted that the diesel oil was not used in the manufacture of the final product during the period when the unit was closed. The claim that it was consumed for maintenance of machinery was rejected because no records were produced to establish such use. The Tribunal's finding on this aspect was a finding of fact, and no perversity was shown. In these circumstances, issuance of Form 3 Kha was treated as false or wrong, and no revisional interference was warranted.

Conclusion: The liability under Section 3-B was rightly upheld, against the assessee.

Issue (ii): Whether sale of bagasse was liable to tax where the assessee had not paid purchase tax on sugarcane under Section 13 of the U.P. Sugarcane (Purchase Tax) Act, 1961.

Analysis: The ruling relied upon by the assessee applies only where purchase tax on sugarcane had already been paid, in which event residue such as bagasse is not exigible to sales tax. Here, concurrent findings recorded that no purchase tax on sugarcane had been paid. Therefore, the factual foundation necessary to extend the benefit of that ruling was absent.

Conclusion: The tax on sale of bagasse was correctly sustained, against the assessee.

Final Conclusion: The revisions turned entirely on concurrent findings of fact, no substantial question of law arose, and the orders levying liability on both counts were left undisturbed.

Ratio Decidendi: In revisional jurisdiction, concurrent findings of fact will not be interfered with absent perversity, and the exemption from tax on sale of bagasse applies only where purchase tax on sugarcane has actually been paid.

---