JUDGMENT Rajes Kumar, J.
1. Present revision under Section 11 of UP. Trade Tax Act (hereinafter referred to as "Act") is directed against the order of Tribunal dated 18th January, 2006 for the assessment year 1998-99.
2. The following questions have been raised in the present revision:
(A) Whether on the facts and in the circumstances of the case, the Trade Tax Tribunal was legally justified in upholding the rejection of account books on invalid grounds particularly when no defect was found in account books ?
(B) Whether on the facts and in the circumstances of the case, the Trade Tax Tribunal was legally justified in determining the turnover of different goods without assigning any basis for determination thereof ?
(C) Whether on the facts and in the circumstances of the case, the Trade Tax Tribunal was legally justified in determining the turnover of "Flavoured Milk" and imposing tax thereon when the Milk is. exempted from tax by virtue of Notification No. ST-II 7038/X/dated 31.01.1985 contrary to view taken by this Hon'ble Court in the case of CS. T. v. Neera Drinks 1999 UPTC, 1130 (D) Whether on the facts and in the circumstances of the case, the Trade Tax Tribunal was legally justified in treating 'Martha and Lassi' as one and the same commodity and imposing tax as per Notification No. Kani 2-11/XI dated 15.01.2000 when the 'Mattha' being basically Milk is exempted from tax as per Notification No. ST-II-7038/X dated 31.01.1985?
(E) Whether on the facts and in the circumstances of the case, the Trade Tax Tribunal was legally justified in determining the turnover of sweet meats made from Khoya despite the facts that there is no material on record to show that such sweetmeats were sold by the applicant ?
3. The applicant is a unit of Provincial Cooperative Dairy Federation, Lucknow and is duly registered under U. P. Trade Tax Act, 1948. Applicant was carrying on the business of manufacture of butter, ghee paneer, curd, mattha and purchase and sale of milk and claimed to have maintained the books of account in the regular course of business. During the year under consideration, applicant had disclosed the taxable turn over at Rs. 1,81,67,975/-. Assessing authority had rejected the books of account and estimated the taxable turn over at Rs. 2,56,17,500/-. First appellate authority confirmed the turn over estimated by the assessing authority. In second appeal, Tribunal has confirmed the rejection of books of account but has reduced the taxable turn over to Rs. 2,27,15,000/- as against the admitted taxable turn over at Rs. 1,18,67,975/-. Tribunal has confirmed the rejection of books of account for the following reasons:
A) Against Form 31 No. F.E.E. 1820755 milk crate for Rs. 2,49,400/- was imported while in the list of Form-31 filed during the course of assessment, the import of Rs. 1,50,000/- had only been shown.
B) In the list of consumption of Forms-31 there was no mention of details of 9 Form-31 Nos. 050648, 1820757, 1820758, 1820759, 3080851, 3080852, 3080853, 3080854 and 3080855 whereas against these declaration forms goods had been imported. One Form-31 was shown cancelled but no detail has been furnished in this regard.
C) 855 bags of skimmed milk powder filled with 265 kg. was shown transferred to other unit for short period but no evidence of its return was furnished. Tribunal has further confirmed the levy of tax on the turn over of flavoured milk estimated at Rs. 5,000/- and has also treated the mattha as lassi and levied the tax @ 5%. Tribunal has also confirmed the estimate of turn over of sweet meat made of khoya at Rs. 3 lacs while according to the applicant sweet meat was not prepared and sold.
4. Heard learned Counsel for the parties.
5. Learned Counsel for the applicant submitted that the rejection of books of account and the estimate of turn over are not justified, inasmuch as based on irrelevant consideration and without considering the explanation of the applicant. He submitted that the milk crate, which was imported against declaration form 31 No. FEE 1820755 is neither raw material nor saleable goods and were used as convenient mode of carrying milk packets from the office of the dairy to sale depots and on account of clerical error in the preparation of list, wrong value had been shown. With regard to 9 Form-31, it is submitted that it is not correct that the details of the goods imported against 9 Form-31 were not furnished. He submitted that the details were furnished before the assessing authority and the goods imported against 9 Form-31 was milk powder and were duly found entered in the books of account and except one Form No. FEE 1820755 all were used for import of milk powder amounting to Rs. 1,56,28,725/-. With regard to one Form-31, which was shown cancelled, he submitted that it had been taken in closing stock. With regard to 855 bags of skimmed milk powder claimed to have been transferred to other unit in respect of which no evidence had been furnished, he submitted that on this ground the turn over of skimmed milk powder can only be enhanced but on this ground books of account can not be rejected and the enhancement of the turn over of other items, should not be made. He submitted that the Tribunal has erred in levying the tax on the flavoured milk while flavoured milk is basically milk and is exempted under the Notification No. 7038/X-7, dated 31.01.1985 as held by this Court in the case of CST v. Neera Drinks, Muzaffarnagar reported in 1999 UPTC, 1130. He further submitted that the Tribunal has erred in treating the mattha as lassi. He submitted that mattha and lassi are two different commodities. He submitted that mattha is basically milk with less fat, hence exempted under Notification No. 7038/X-7, dated 31.01.1985. He submitted that the applicant had never manufactured sweetmeat and thus estimate of turn over of sweetmeat made of khoya is not justified. Learned Standing Counsel relied upon the order of the Tribunal.
6. In my view, on the point of rejection of books of account and estimate of turn over, matter requires consideration.
7. With regard to the import of milk crate against declaration form No. FEE 1820755, it is necessary to examine whether in the books of account purchases of Rs. 2,49,400/- or Rs. 1,50,000/- is entered and what is the value of the goods as per the invoice. In case, if the value of the goods is not found entered in the books of account, the same may be ground for rejection of books of account but if entire value are duly entered in the books of account and merely in the list of Form-31 the value had been mentioned at Rs. 1,50,000/- in place of Rs. 2,49,400/- no adverse inference can be drawn. Further the claim of the applicant is that the total consumption of Form-31 was shown at 15 which includes 9 Form-31 and the details of goods imported against the said forms were duly furnished and against the alleged all Form-31 skimmed milk powder were imported, which were included in the total purchases/import of skimmed milk powder shown at Rs. 1,56,28,725/-. This explanation requires verification. It is to be examined from the books of account whether the purchases made against alleged 9 Form-31 were duly recorded in the books of account or not and such purchases are included in the purchases shown by the applicant. If it is so, no adverse inference can be drawn even if details of the goods imported against alleged Form-31 were not furnished in the list of Form-31.
8. So far as the levy of tax on the value of 855 bags of skimmed milk powder, which is claimed to have been transferred to its own unit in respect of which no evidence had been furnished, I do not find any error in it. Applicant itself admits that such turn over may be liable to tax.
9. So far as other question is concerned, namely, levy of tax on the turn over of flavoured milk is concerned, I do not find any error in the order of Tribunal. Flavoured milk, which is prepared after mixing the dry fruits etc. in common parlance is understood as soft drink and not as a milk. In Writ Petition (Tax) No. 1269 of 1989 in the case of CTT v. S/S Gujarat Cooperative Milk Marketing Federation Ltd., Kanpur flavoured liquid milks sold by Gujarat Cooperative Milk Marketing Federation Limited has been held as milk product and not milk. On a question being raised whether flavoured milk was liable to tax under the entry of milk product or as condensed milk or as soft beverages. In the case of CTT v. S/S Gujarat Cooperative Milk Marketing Federation Limited, Kanpur reported in 2005 NTN (Vol.27), 195, this Court held that the flavoured liquid milk is liable to tax as a soft beverages. Thus, claim of the applicant that it is exempted from tax is hereby rejected. In the case of CST v. M/s Neera Drinks, Muzaffarnagar, (Supra), the item involved was sweeten milk described as milk badam sold in bottles with caps. In the said case decision of this Court in Writ Petition (Tax) No. 1269 of 1989 in the case of CTT v. S/S Gujarat Cooperative Milk Marketing Federation Limited, Kanpur has not been considered and findings of the Tribunal treated it as milk has been upheld. I do not agree with the learned Counsel for the applicant that the mattha being a milk and exempted form tax. Mattha is a milk product and is sold after mixing the salt and jeera etc. and is not a milk. Order of the Tribunal rejecting the claim of exemption on the turn over of mattha is upheld. Order of the Tribunal levying the tax on the sweetmeat is also upheld. Applicant itself disclosed the turn over of sweetmeat at Rs. 2,57,455/- made of khoya. Thus, preparation made of khoya being sweetmeat is liable to tax accordingly.
10. The aforesaid questions are answered accordingly.
11. In the result, revision is allowed in part. Order of the Tribunal is set aside so far as rejection of books of account and estimate of turn over is concerned. Matter is remanded back to the Tribunal to decide the appeal afresh in the light of the observations made above.