Judgments
Judgments
  1. Home
  2. /
  3. High Court Of Judicature at Allahabad
  4. /
  5. 1980
  6. /
  7. January

Commissioner, Sales Tax vs Lakshmi Ratan Engineering Works ...

High Court Of Judicature at Allahabad|12 August, 1980

JUDGMENT / ORDER

JUDGMENT R.R. Rastogi, J.
1. These four revisions can be conveniently disposed of together. The assessee, M/s. Lakshmi Ratan Engineering Works Limited, Behari Niwas, Kanpur, carried on business in manufacture of textile machines and parts, etc. It is registered both under the U.P. and the Central Sales Tax Acts. For the assessment year 1971-72, the accounts of the assessee maintained in respect of intra-State transactions were rejected mainly for two reasons : firstly that there was difference in the books and returned figures and secondly that the turnover disclosed in proportion to the electricity consumed when compared with the immediately preceding year appeared to be very much inadequate. The accounts of the assessee maintained in respect of inter-State transaction as well were rejected for the reason that the accounts in respect of intra-State transactions had been rejected. Accordingly the assessing officer determined the taxable turnover both under the U.P. and the Central Acts to the best of his judgment.
2. Being aggrieved the assessee filed appeals before the Assistant Commissioner (Judicial). The Assistant Commissioner (Judicial) confirmed the rejection of accounts but allowed some relief in the quantum of taxable turnovers. From that decision cross-revisions were filed both by the assessee and the department in so far as the assessment under the U.P. Act was concerned and by the assessee alone in regard to the assessment under the Central Act. The Additional Judge (Revisions) confirmed the rejection of accounts which relate to intra-State transactions but allowed some further reduction in the taxable turnover and from that decision the assessee has filed S.T.R. No. 175 of 1980 and the department has filed S.T.R. Nos. 142 and 143 of 1980. In the revision in respect of the assessment made under the Central Sales Tax Act the learned Additional Judge (Revisions) accepted the assessee's contention that its accounts could not be rejected. However, he did not accept the assessee's claim of tax at concessional rate. According to the assessee it had made all the sales against C forms and hence was liable to tax at 3 per cent only. It was found that one C form No. 064850 was in respect of two bills Nos. 100 and 116 dated 14th April, 1971, and 25th May, 1971, respectively. Those bills were for Rs. 42.23 and Rs. 12,669 respectively. Since the aggregate of those bills was more than Rs. 5,000, in the opinion of the Additional Judge (Revisions), the declaration was to be rejected in its totality and hence in respect of the aforesaid amount tax was liable to be charged at 10 per cent. From this order the assessee has filed S.T.R. No. 174 of 1980.
3. I shall first take up the assessment made under the Central Act. As noted above, the Additional Judge (Revisions), disagreeing with the revenue authorities, held that since no defect had been found in the accounts of the assessee relating to inter-State transactions, they could not be rejected. The department has not disputed this finding of the Additional Judge (Revisions). The only question which remains for consideration is as to whether because of the fact that one declaration form had been given in respect of two transactions the aggregate of which in terms of money exceeded Rs. 5,000, could the assessee be denied benefit of that declaration in its totality. The contention of the learned counsel for the assessee that the view taken by the Additional Judge (Revisions) is erroneous, finds support from the decision of a Division Bench of this Court in Commissioner of Sales Tax v. Kanpur Engineering Stores 1976 UPTC 326. It has been laid down in that case that Rule 8(1-C) of the Uttar Pradesh Central Sales Tax Rules, 1957, or its proviso do not postulate the rejection of the declaration in its totality where more than one transaction is comprised in one declaration and the total amount thereof exceeds Rs. 5,000. In other words the assessee is entitled to the benefit of this declaration in respect of one transaction only. The question, therefore, will have to be decided by the revising authority afresh keeping in view the legal aspect as discussed above.
4. Now coming to the assessment made under the U.P. Act, the grievance of the assessee is that there was no proper reason for rejecting its accounts and for enhancing the admitted turnover while that of the department is that the reduction allowed by the Additional Judge (Revisions) in the taxable turnover was without any proper basis.
5. After hearing the counsel for the parties I find that in regard to both these questions, viz., acceptance/rejection of accounts and enhancement of turnover and the quantum thereof the matter will have to be referred back to the Additional Judge (Revisions). As noted above the accounts had been rejected for two reasons mainly. The first reason was the difference of Rs. 3,477 in the books and returned figures. The Additional Judge (Revisions) has observed that the assessee had offered an explanation about that difference before the appellate authority which was rejected and he then proceeds to conclude :
The rejection does not look justified as no reasons were given in support.
6. I find that the position is just the contrary. The appellate authority did discuss the explanation of the assessee and rejected it thereafter. Unfortunately, the Additional Judge (Revisions) has not given any reasons for accepting the assessee's explanation. He has not even mentioned what that explanation is and how he is satisfied with it. The second reason for rejecting the accounts was decline in the admitted turnover with reference to the consumption of electricity when compared with the corresponding figures of the previous three years. The assessee had given an explanation and it was that for certain reasons its factory was closed on 30th September, 1971, and on that account the consumption of electricity was less during this year as compared to the previous year. Apart from that under an agreement with the electricity department the assessee is required to pay a certain minimum amount and that amount had to be paid irrespective of the electricity actually consumed. The learned Additional Judge (Revisions) has accepted the assessee's contention that the assessee had to close its factory on 30th September, 1971. However, that was not the end of the matter because despite the fact that the factory was closed the assessee could have made the sales of the stock in hand and the decline in the turnover was to be examined in the light of the assessee's explanation in that behalf. That has, however, not been done. The Additional Judge (Revisions) on the one hand appears to have been satisfied with the assessee's explanation in regard to the two grounds mentioned above but at the same time enhanced the admitted turnover. That also appears to be contrary and it is not clear as to whether he was prepared to accept the accounts of the assessee or not. Therefore both these questions, i. e., the rejection of accounts and the estimate of taxable turnover have to be gone in to afresh on the basis of the material on record.
7. In the result, therefore, all these revisions are allowed and the orders under revisions are set aside to the extent noted above. So far as the r.evisional order made in regard to the assessment made under the Central Sales Tax Act is concerned the Additional Judge (Revisions) would decide the question as to in respect of which one of the two bills covered by the declaration in dispute the assessee was entitled to get the benefit of the declaration under Rule 8(1-C) of the Uttar Pradesh Central Sales Tax Rules. So far as the assessment made under the U.P. Sales Tax Act is concerned the learned Additional Judge (Revisions) would decide the question of rejection of accounts and determination of the quantum of taxable turnover afresh according to law. No order is made as to costs.
Disclaimer: Above Judgment displayed here are taken straight from the court; Vakilsearch has no ownership interest in, reservation over, or other connection to them.
Title

Commissioner, Sales Tax vs Lakshmi Ratan Engineering Works ...

Court

High Court Of Judicature at Allahabad

JudgmentDate
12 August, 1980
Judges
  • R Rastogi