This revision has been filed under Section 11 of the U.P. Trade Tax Act read with Sections 81 and 58 of the VAT Act, 2008 for the assessment year 1995-96 against the order of the Tribunal dated 14.5.2009. By this order the Tribunal has refused to grant to the assessee a refund under Section 29-A of the U.P. Trade Tax Act and in fact has ordered for recovery.
The questions of law referred to are hereunder: "1. Whether, the finding of the Tribunal that the applicant had realized tax @ 10% on sale of axle is perverse and or based on presumption and conjectures ?
2. Whether, bifurcation of the total sale receipts in the return, into turnover and tax can lead to the inference of tax having been passed on and whether it can defeat the claim of refund under Section 29-A of the Act ?"
The assessee is engaged in the purchase and sale of tractor parts, machinery parts and axle parts. On 15.12.1997 an assessment was made for the applicant and its turnover was accepted at Rs.21,26,905/- on iron and steel. The assessee was assessed @ 4% and the tax liability of axle was deposited @ 10%. Thus, it is the contention of the assessee, that it was wrongly calculated as under the provisions of Section 14 of the Central Sales Tax Act it was only liable to pay tax @ 4% on axle. The assessee, therefore, contended that it had paid the tax on axle in excess and sought a refund under Section 29-A of the Act.
The assessing authority rejected the prayer for refund by its 2 order dated 15.12.1997. By its order dated 30.6.1998 the 1st Appellate Authority allowed the appeal filed by the applicant and directed the department to refund Rs.1,08,369/- in favour of the assessee. In the order dated 30.11.1998 it has been recorded by the 1st Appellate Authority that the assessee who was a registered dealer had not realized any tax from its purchaser separately and also recorded that the assessee had not made any violation of the provisions of Section 8A(2) of the Act and directed the refund of the amount deposited in excess.
The assessee has placed on the record as Annexure 3 to the revision, the bills in respect of sale of axle, these very bills had been produced before the 1st Appellate Authority also. The bills record "rate inclusive of local taxes and other additional taxes".
Aggrieved by the order of the 1st Appellate Authority regarding a finding that no tax has been realized separately from the purchase of axle, the department filed an appeal, being Appeal No.51 of 1999, before the Trade Tax Tribunal. The Tribunal has, however, reached a completely different conclusion and has set aside the order of refund while confirming the order of the assessing authority.
The reason adopted by the Tribunal is that the assessee himself while praying for refund has bifurcated its turnover and the difference is of 10% which is indicative of the fact that this 10% was the amount realized by the assessee from its purchaser.
The learned counsel for the assessee has strenuously argued that even though the assessee may have bifurcated the the amount that itself was not indicative of the fact that this 10% had been separately charged.
He has argued that the bills of contract was made with the purchaser on the other hand did not show any separate amount and therefore, this was indicative of the fact that no separate amount had been charged and in fact the total amount disclosed by the assessee of a sum of Rs.21,26,905.75 for the sale of axle was in fact 3 aggregate and the bills being given by him were of a composite nature and therefore, the entire amount of Rs.21,26,905.75 would constitute his turnover within the meaning of Section 2(i) and therefore, this would be the amount chargeable to tax under the statute. The learned standing counsel has argued that since the assessee had himself bifurcated the amount and difference was coming to 10% was sufficient for the department to calculate that 10% had been charged as tax from the purchaser of axle.
I have heard the learned counsel for the assessee at length and have perused the material on the record.
The 1st Appellate Authority has clearly recorded a finding that the amount of tax was separately charged by the assessee in the bills. This fact is also reflected as true from the bills which have been placed on the record. No doubt the assessee bifurcated the amount, but, I am not inclined to agree with the submission made by the learned counsel for the assessee that in the facts and the circumstances of the case the total amount of Rs.21,26,905.75 was the turnover of the assessee within the meaning of Section 2(i) of the Act and, therefore, this was the amount which was chargeable to tax. The tax to be charged on axle was 4%. This is not denied either by the State or by the assessee.
The learned counsel for the assessee has also pointed out that the assessing authority while making its assessment has also assessed the turnover of the assessee at Rs.21,26,905.75 in respect of the axle.
The learned counsel for the assessee had also relied on a decision of this Court in the case of Shiv Shakti Soap Industries, Ghaziabad vs. Commissioner, Trade Tax, U.P., Lucknow, 2007 NTN (33)285, wherein also this Court came to the conclusion that where an assessee had made a bifurcation in the turnover that had been charged in a consolidated way. It would not be conclusive of the fact that any amount had been actually realised from the purchaser.
Thus, as the finding has already been recorded by the 1st Appellate Authority that the assessee had not realised the tax separately from its purchaser, the bifurcation made by the assessee is not indicative of any specific amount being realised from the purchaser. This Court, therefore, comes to the conclusion that the 1st Appellate Authority had rightly assessed the turnover of the assessee at a sum of Rs.21,26,905.75 and the assessee would be liable to pay tax @ 4% on that amount. In case the assessee had deposited any amount in excess of 4% on the said amount, the same shall be refunded to the assessee after making due calculations. The calculations and verifications shall be made within a period of three months from the date of the production of a certified copy of this order being placed before the authority concerned.
In case the amount refunded is in excess, then it is open to the department to recover it from the assessee.
This revision is disposed of.
Dated:28.1.2010 AKJ