2024 (5) TMI 1267 - HC - VAT and Sales Tax

Trade tax assessment upheld after survey reveals large-scale credit sales with tax evasion under Section 11

M/s Raju Cement Store Oel Through Its Proprietor Versus Commissioner of Commercial Taxes U.P. Commercial Tax

M/s Raju Cement Store Oel Through Its Proprietor Versus Commissioner of Commercial Taxes U.P. Commercial Tax - TMI Issues Involved:1. Preliminary Objection on Filing Separate Revisions2. Validity of the Tribunal's Order3. Consideration of Material Evidence4. Dealing in Tax Paid Goods and Form 315. Enhancement of Turnover by the Tribunal6. Basis of Tax Assessment by the First Appellate Authority7. Application for Recall of Ex-Parte Order8. Allegation of Extraneous Considerations by the TribunalSummary:1. Preliminary Objection on Filing Separate Revisions:The learned Additional Chief Standing Counsel raised a preliminary objection that the petitioner should have filed two separate revisions for the two second appeals decided by a common judgment. The petitioner did not dispute this objection. However, since the revision was admitted on 22.01.2009, the Court decided to proceed on merits in the interest of justice.2. Validity of the Tribunal's Order:The revisionist challenged the order dated 16.10.2008 passed by the Trade Tax Tribunal, which restored the assessment made by the Assessing Authority and set aside the order of the First Appellate Authority. The Tribunal found that the First Appellate Authority had reduced the tax liability based solely on the cash found in the petitioner's cash box, ignoring documentary evidence of large-scale credit sales.3. Consideration of Material Evidence:The Tribunal considered the entire material on record, including slips found during the survey indicating large-scale sales on credit. The revisionist failed to produce any documentary evidence to refute these findings. Thus, the Tribunal's order was based on a thorough examination of the evidence.4. Dealing in Tax Paid Goods and Form 31:The revisionist claimed to deal only in tax-paid goods and had not obtained Form 31. However, the findings of the survey and the material placed by the petitioner did not establish this claim. The revisionist could not produce documentary evidence for the purchase of goods, making the claim baseless.5. Enhancement of Turnover by the Tribunal:The Tribunal set aside the First Appellate Authority's order, which had reduced the tax liability without considering the entire facts and circumstances. The Tribunal restored the well-reasoned order of the Assessing Authority, which had assessed the tax liability based on the entire record found during the survey.6. Basis of Tax Assessment by the First Appellate Authority:The First Appellate Authority had assessed the tax based on the cash found in the petitioner's cash box, ignoring the sale of goods on credit. The Tribunal found this basis invalid and restored the Assessing Authority's order, which considered the entire relevant material.7. Application for Recall of Ex-Parte Order:The petitioner claimed to have filed an application u/s 22 of the Trade Tax Act for recalling the ex-parte order dated 16.10.2008. However, as the revision was admitted for final hearing, the application for setting aside the ex-parte order lost its significance. The Tribunal proceeded ex-parte as per Rule 68(4) of the U.P. Trade Tax Act 1948 due to the petitioner's absence despite proper notice.8. Allegation of Extraneous Considerations by the Tribunal:The petitioner alleged that the Tribunal proceeded on extraneous considerations and committed factual and legal errors. However, no material was provided to establish this allegation. The Tribunal's order was based on the entire relevant material, and the petitioner did not refute the allegations in the show cause notice.Conclusion:The High Court dismissed the revision, finding no illegality in the Tribunal's order dated 16.10.2008. The Tribunal had considered all relevant material and evidence, and the petitioner failed to provide any substantial refutation. The revision lacked merit and was dismissed.