Court No. - 7
Case :- SALES/TRADE TAX REVISION No. - 276 of 2018 Applicant :- M/S Basant Oils Pvt. Ltd.
Opposite Party :- The Commissioner, Commercial Taxes Counsel for Applicant :- 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 for the assessment year 2012-13 (U.P.) under the U.P. VAT Act, 2008 (hereinafter referred to as "the Act"). The following two questions have been pressed by the learned counsel for the revisionist :-
"i. Whether the Tribunal was justified in passing the impugned order without dealing with the question of reversal of input tax credit raised or the plea raised that no reversal of input tax credit under rule 22(2) of U.P. VAT Rules could be done on the consignment sale of the bye product?
ii. Whether the Tribunal was justified in imposing the tax both on the undisclosed purchases and undisclosed sales being made by the applicant, without giving the benefit of input tax credit for the undisclosed purchases having been made by the applicant which is in teeth of section 5 of the Act read with the judgment/decision of this Hon'ble Court in the case of Deep Murmura Products Ltd. (supra)?"
2. Admittedly, the assessee is a registered dealer engaged in the manufacture and trade in mustard oil. While making the assessee's assessment for the assessment year 2012-13 (U.P.), vide assessment order dated 31.03.2017, he made addition to the undisclosed purchase of mustard seed and consequentially to the turnover of manufactured mustard oil manufactured therefrom. Insofar as, these additions that have been made, the assessee does not dispute the correctness of the same.
3. The grievance of the assessee is on two other counts. First, it has been submitted that the reversal of input tax credit (on intra-state purchase of mustard seed), had been wrongly made by the Assessing Officer, inasmuch as the assessee claimed to have maintained separate accounts for purchase of mustard seed from inside and outside U.P. He, therefore, submits that the input tax credit that had arisen to the assessee on purchases made inside the State of U.P. was fully verifiable and therefore allowable. In this regard, it has been submitted that Assessing Authority erred in reversing the input tax credit on the reasoning that the physical stock of mustard seed acquired from inside and outside the State was not maintained separately.
4. Sri Shubham Agrawal, learned counsel for the applicant submits that the submission of the assessee on this count though noticed by the Tribunal, had not been adjudicated.
5. Sri B.K. Pandey, learned Standing Counsel could not dispute the correctness of the submission so advanced.
6. Consequently, no useful purpose would be served in examining this issue any further on merits. The Tribunal was obliged in law to decide such ground of appeal as was contained in the memo of appeal and had been pressed before it, during oral hearing. Failure to decide a ground of appeal after noticing the same in its order renders the order of the Tribunal contrary to law, on that issue. Therefore, question no. 1 is decided in favour of the assessee and against the revenue. To that extent the revision succeeds and the matter is remitted to the tribunal to press a fresh order on that issue.
7. On the second issue, learned counsel for the assessee submits that there can be no quarrel to the proposition that once the turn over of the undisclosed purchase of raw material was enhanced and tax imposed on such enhanced turnover, the benefit of the same had to be necessarily given against the tax demand created on turnover of goods estimated to have been manufactured from such undisclosed raw material. This principle is stated to be enshrined in Section 13 (12) of the Act.
8. Reliance has also been placed on a decision of this Court in the case of M/s Deep Murmura Products Baraut Alld. vs. Commissioner of Commercial Tax, Lko., VSTI 2014 (Vol. 21) B-929.
9. Learned Standing Counsel has fairly states that there can be no dispute as to the principle relied upon by the learned counsel for the assessee. Consequently, the finding of the Tribunal depriving the assessee benefit of input tax on undisclosed purchase of mustard seed is against the law and it cannot be sustained. The second question is also decided in favour of the asseesse.
10. Hence, both question nos. 1 and 2 are answered in the negative i.e. in favour of the assessee and against the revenue. The revision must succeed.
11. In the entirety, the revision is allowed. The matter is remitted to the Tribunal to record fresh finding in respect of reversal of input tax credit as noted above.
Order Date :- 29.10.2018 sailesh