2023 (1) TMI 384 - HC - VAT and Sales Tax

High Court Upholds Tribunal Decision on Trade Tax Appeal; Reassessment Dismissed

The Commissioner Commercial Tax Versus M/s Tuf Twan Patro Chemicals

The High Court upheld the Tribunal's decision in allowing Second Appeal Nos. 547, 548, and 549 of 2013 under Section 21 of the U.P. Trade Tax Act for ... Initiation of re-assessment proceedings - escaped assessment - initiation on the ground that three Form-C issued by the purchasing dealer, which was situated in the State of Rajasthan had not entered the same in the books of accounts and the said three Form-C are not verified - HELD THAT:- On perusal of material on record and find that after the two round of remand of the matter by the first Appellate Authority, the Tribunal, after considering the material on record and calling for the records of the Assessing Authority, had found that the three Form-C, which were issued to the selling dealer, was issued by the Tax Department of State of Rajasthan and the assessment of purchasing dealer has already been done in his State. The Tribunal has further recorded a finding that the books of accounts of the assessee was already accepted and there was no ground for initiating proceedings under Section 21 of the Act for reassessment and there was no material on record to make out a case that any turn over has escaped assessment. The findings of fact has been recorded by the Tribunal which needs no interference by this Court. Revision dismissed. Issues:- Validity of the order passed by the Tribunal allowing Second Appeal Nos. 547, 548, and 549 of 2013 under Section 21 of U.P. Trade Tax Act for assessment years 1998-99, 1999-00, and 2000-01.- Re-assessment proceedings initiated based on non-verification and non-entry of Form-C issued by a purchasing dealer situated in Rajasthan.- Dispute regarding acceptance of the dealer's reply by the Assessing Authority.- Multiple remands by the first Appellate Authority for reconciling the case and verifying Form-C issued by the purchasing dealer.- Tribunal's decision based on findings related to the issuance of Form-C by the Rajasthan Tax Department, assessment of the purchasing dealer in Rajasthan, and acceptance of the assessee's books of accounts.Analysis:The judgment by the Hon'ble Rohit Ranjan Agarwal, J. of the Allahabad High Court dealt with three revisions arising from a common order passed by the Tribunal. The Tribunal's order allowed the Second Appeal Nos. 547, 548, and 549 of 2013 for the assessment years 1998-99, 1999-00, and 2000-01 under Section 21 of the U.P. Trade Tax Act. The case revolved around re-assessment proceedings initiated due to the non-verification and non-entry of three Form-C issued by a purchasing dealer in Rajasthan. The Assessing Authority did not accept the dealer's reply, leading to reassessment under Section 21 of the Act against the assessee. The first Appellate Authority remanded the matter back twice to the Assessing Authority for reconciliation and verification of the Form-C, resulting in the assessee filing three second appeals before the Tribunal, which were allowed by a common order.The learned Standing Counsel argued that the Form-C issued by the purchasing dealer in Rajasthan had not been verified or entered into the dealer's books of accounts, justifying the taxation by the Assessing Authority. On the other hand, the counsel for the assessee contended that the assessment of both the selling and purchasing dealers had been completed, with Form-C issued by the Rajasthan Tax Department and transactions duly recorded in the books of accounts. After considering the arguments and material on record, the Tribunal found that the Form-C was issued by the Rajasthan Tax Department, the purchasing dealer had been assessed in Rajasthan, and the assessee's books of accounts were in order. The Tribunal concluded that there was no basis for reassessment under Section 21, as no turnover had escaped assessment.The High Court upheld the Tribunal's findings of fact, stating that there was no need for interference. Consequently, the revisions were deemed devoid of merit and dismissed. The judgment provides a detailed analysis of the issues surrounding the re-assessment proceedings, verification of Form-C, and the Tribunal's decision based on the assessment of the purchasing dealer and acceptance of the assessee's books of accounts.