Court No. - 59
Case :- SALES/TRADE TAX REVISION No. - 335 of 2019 Revisionist :- M/S Achintya Commodities Pvt.Ltd. Opposite Party :- The Commissioner Commercial Tax Counsel for Revisionist :- Shubham Agrawal Counsel for Opposite Party :- C.S.C.
Hon'ble Saumitra Dayal Singh,J.
1. The present revision has been filed by the assessee against the order of the Commercial Tax Tribunal, Kanpur, dated 7.9.2019, passed in second appeal no. 169 of 2019 for A.Y. 2015-16 (under U.P. V.A.T.). By that order, the Tribunal has partly allowed the assessee's appeal and remitted the matter to the assessing authority to pass a fresh assessment order.
2. The present revision has been confined to the dispute with respect to loss of Rs. 1,71,00,000/- (in approx) claimed by the assessee in the activity of trading in Iron & Steel and Iron & Steel scrap.
3. Heard Sri Shubham Agrawal, learned counsel for the applicant-assessee and Sri B.K. Pandey, learned Standing Counsel for the revenue.
4. The present revision has been pressed on the following question of law:
"Whether the Tribunal was justified in remanding the matter to the Assessing Authority, even though no adverse material exists on record with respect to any undisclosed sale having been made by the applicant and the Tribunal having accepted the proposition of law, that sale at loss cannot be made the basis for enhancement of turnover, hence, the remand made by the Tribunal for making fresh enquiry on the issues which had already been examined by the assessing authority amounted to giving second innings to the department?"
5. The submission advanced by learned counsel for the applicant-assessee is that, once the Tribunal accepted as correct that loss claimed by the assessee, there did not exist any possibility for rejection of books of account of the assessee. There was no occasion to remand the matter. In this regard, it has been further submitted, during the assessment year in question, the assessee had made purchase of Iron & Steel and Iron & Steel scrap from one seller namely M/s Shiv Shakti Traders. The entire quantities of tax paid Iron & Steel and Iron & Steel scrap had been purchased during the period 10.3.2016 to 28.3.2016. The entire quantities were sold by the assessee at a loss as the assessee had no earlier experience in that trade. The assessing authority as also the first appeal authority, did not give credence to the books of account of the assessee on the reasoning that such a huge loss was wholly unacceptable. The Tribunal has clearly found an error in such reasoning offered by the assessing authority as also first appeal authority. In fact, the Tribunal has specifically held that occurrance of loss cannot be a ground to reject the books of account or to estimate the turnover.
6. Having heard learned counsel for the parties and having perused the record, though the Tribunal has remitted the matter to the first appeal authority after recording it's finding, noted above, being, it was necessary to be seen whether there was any collusion between the assessee and its purchasers with respect to the sale value (at loss), disclosed by the assessee. In that regard, it further appears that before the Tribunal, only photocopies of the invoices issued by the assessee had been produced. Further, neither the assessing authority nor the first appeal authority had applied their minds or recorded any finding as to the collusion or otherwise.
7. Therefore, the order of the Tribunal requiring the assessing authority to apply the correct principle i.e. to see whether there existed any collusion between the assessee and it's purchaser cannot be faulted, in face of the nature of the finding recorded by the assessing authority and the first appeal authority.
8. Further submission advanced by the learned counsel for the assessee that the other observations made by the Tribunal may come in its way, appear to carry some weight. The basic and first issue to be examined by the assessing authority, in such a case, would be whether there was any collusion between the assessee and it's purchasers. In the first place, once the assessee produced the original invoice and its books, a presumption would exist in his favour.
9. It would thereafter remain with the assessing authority to make such proper enquiry on such issue to reach a firm and independent conclusion as to occurrence or otherwise of any collusion. If he reaches a conclusion that there was no collusion, no other enquiry would be required to be made. If such conclusion is drawn adverse to the assessee, the other observations made by the Tribunal may become relevant for the purpose of estimation of turnover only but not for rejection of books of account.
10. In view of the above, leaving the question of law (as framed above) unanswered, the present revision is disposed of with an observation that it is expected that the proceedings in remand may be completed as expeditiously as possible, preferably within a period of six months from today.
Order Date :- 30.9.2019 Prakhar