JUDGMENT Prakash Krishna, J.
1. These two revisions are against the common order dated 28th of May, 1997 passed by the Sales Tax Tribunal in two second appeal Nos. 31 of 1994 and 34 of 1994 for the assessment year 1987-88 (U.P. and Central).
2. The dealer opposite party carried on the business of manufacture and sale of cooler, generator and diesel engine etc. It disclosed the gross turnover of Rs. 5,79,700/- and net turnover as nil. No tax liability was admitted by the dealer in view of the notification No. 7037/X-71231 dated 31st of January, 1985. The benefit of the aforesaid notification was denied by the Assessing Officer on the ground that the black- smithy work was carried on by the dealer by involving the use of power. The dealer opp.party is registered under the Khadi and Village Industries Board. Under the aforesaid notification the turnover of persons holding the certificate under Khadi and Village Industries Board was conditionally exempted. The condition to grant exemption was that the black-smithy work should be done without involving the use of power. According to the Assessing Authority the dealer opp.party used the power in black-smithy and as such was not entitled to avail the benefit under the aforesaid notification. In appeal, the Assistant Commissioner (Judicial) by the order dated 22nd of July, 1996 set aside the assessment orders and remanded the matter to the Assessing Authority for reconsideration with certain directions. It was found by the Appellate Authority that in the certificate dated 31st of October, 1987 generator was found at the business premises alongwith certain other machineries which could be operated only with the help of power. Further direction was that in the survey dated 3rd of July, 1987 a diary (note book) was seized by the Surveying Officer. But the entries in the said diary were not taken into account while framing the assessment. No enquiry was made by the Assessing Officer with regard to the seized diary and as such the matter is required to be investigated upon with respect to the seized diary. The First Appellate Authority was of the view that whether the dealer opp.party has an electric connection or not, is wholly immaterial as a generator was found there.
3. Aggrieved against the aforesaid order the dealer opp.party filed the aforesaid two second appeals before the Tribunal. The Tribunal by the order under revision has allowed both the appeals and held the net turnover as nil.
4. Head the learned standing counsel for the department and Shri Bharatji Agrawal, the Senior Advocate, assisted by Shri Piyush Agrawal on behalf of the dealer opp.party. The learned standing counsel submitted that the Tribunal committed illegality in interfering with the order of the remand passed by the First Appellate Authority. The First Appellate Authority had directed the Assessing Authority to make enquiries with regard to the seized diary in the survey dated 3rd of June, 1989. In the survey several documents were seized and certain other irregularities were brought to light. But the assessment order was framed by overlooking the documents seized at the time of survey. In this view of the matter the order of remand passed by the First Appellate Authority was perfectly justified and it should not have been interfered with by the Tribunal. It was also submitted that the Tribunal has ignored the relevant material on the record and based its judgment and order on irrelevant considerations and as such the finding recorded by the Tribunal is vitiated in the eyes of law. In contra, the learned Senior Counsel submitted that the findings recorded by the Tribunal are findings of fact and are binding on this Court. This Court has got limited power to interfere with the order passed by the Tribunal. The High Court in exercise of jurisdiction under Section 11 of the U.P. Trade Tax Act can correct legal error only.
5. It is not in dispute that the exemption vide Notification No. 7037 dated 31st of January, 1985 could be granted to such a Unit which is registered with the Khadi and Village Industries Board as specified in the said Notification. It is also not in dispute that only such blacksmiths who are manufacturing and servicing without involving the use of power are entitled to claim exemption vide entry No. 17 of the List mentioned in the said Notification. There are two surveys dated 31st of October, 1987 and 3.7.1989. Number of machineries, some of them mentioned as below were found in the survey dated 31.10.1987:-
6. The dealer opp.party did not dispute the existence of the aforesaid machines etc. including the generator in the assessment proceedings. It offered an explanation that the aforesaid plant and machineries were purchased by it to take a loan from the bank. It was submitted that even at the time of survey no electric power connection was found and as such the dealer is entitled to avail the benefit under the aforesaid notification. It was further pointed out that the dealer opp.party filed an application for electric connection on 28th of March, 1989 of 10 H.P. equivalent to 7.5 Kilowatts and in pursuance thereof the electric connection was given on 10th of July, 1990, the period which falls in the subsequent assessment year. It was pointed out that the condition of the no power connection was subsequently withdrawn by the State government for the subsequent assessment year. It may be noted here that there is another survey dated 3rd of July, 1989 in which electric connection was found in the name of the firm. In this survey also number of machines were found. The Tribunal has brushed aside the facts found in the survey dated 31st of October, 1987 on the ground that at the time of survey these machineries were not in use. In absence of any material to show that these machineries were being utilized for the black-smithy work, no inference can be drawn that the dealer was doing the black-smithy work with the involvement of use of power. The Tribunal was very much impressed by the fact that a certificate of Exeeutive Engineer, U.P. State electricity Board, Agra was produced, certifying that the electric connection was ordered on 2nd of March, 1990. It concluded that in view of the above certificate there was no electric connection in the relevant assessment year i.e. 1987-88. The said finding of the Tribunal is wholly arbitrary and is based on irrelevant considerations. The order of the Tribunal cannot be sustained for the reasons more than one.
7. The First Appellate Authority namely Assistant Commissioner (Judicial) by the order dated 22nd of July, 1996 had remanded the matter back to the Assessing Officer for reconsideration with certain directions. In the survey dated 7th of July, 1989 a note book containing 12 pages, Sanket No. 11 was also seized. The order of remand was passed on the ground that no proper enquiry was made by the Assessing Officer on the facts found at the time of the survey. The case of the dealer opp.party was that the entries contained in the said diary were related to M/s. National Generator, a different firm. This aspect of the matter was not considered by the Assessing Authority, It has to be found out whether any firm in the name of M/s. National Generator is in existence and is registered with the department or not. If the said firm is in existence whether the seized diary has been owned by the said Firm and the entries in the diary were taken into account by the Assessing Officer of M/s. National Generator or not. The burden to satisfactorily explain the incriminating material found at the time of survey is on the dealer. It is strange that the Tribunal has completely overlooked this part of the order of the First Appellate Authority. Tribunal has also not taken into account the reasons given by the First Appellate Authority for remanding the case for fresh assessment. The Tribunal has also not recorded any finding that the dealer opp.party has been able to explain about the seized diary. The order of the Tribunal is of reversal. It was incumbent upon the Tribunal before reversing the order of the first Appellate Authority to consider and record the necessary findings on this aspect of the matter. The failure by the Tribunal to consider the above aspect, which is vita! in the case, vitiates the order.
8. Besides the above, the Tribunal has not given due weight to the facts found in the survey dated 31st of October, 1987. In that survey certain machineries, which could be operated only with the help of power were, admittedly found. It is true that those machines were not in operation at the time of survey but it was for the dealer to explain as to under what circumstances those machines were there at the business premises of the dealer opp.party. The availability of machines at the business premises of the dealer opp.party which were operative only through electric power gives extrinsic evidence that the dealer opp.party had power connection may be through generator. It is important to notice here that in the aforesaid survey dated 31st of October, 1987 a generator (Ramco make) of 10 H.P. was also found. The presence of these electric (power) operated machines/plants on the spot is so compulsive and clinching as to necessarily warrant a finding that the dealer manufactured the goods by to involving the use of power. The dealer opp.party has tried to explain the existence of the said generator on the plea that the dealer itself manufactures generator in the trade name of Ramco. This explanation, though offered before me, has not been accepted or rejected by any of the three authorities below. So it is not possible to accept or reject it in the absence of any cogent material. It is not the function of this court to examine an oral explanation for the first time. It may be noted here that in the assessment order it is mentioned that the dealer is selling the generator in the trade name of "National". The Tribunal has preferred to place reliance upon a certificate issued by the Executive Engineer of U.P. Power Corporation. The said certificate is dated 26.9.1995. It was obviously obtained after the assessment order. Placing blind reliance upon a document which was produced by the dealer opp.party at the appellate stage without making any investigation or enquiry about its genuineness and correctness is unwarranted in law. There is no explanation why the aforesaid certificate could not be filed before the Assessing Officer. An opportunity of rebuttal should have been given by the Tribunal or by the First Appellate Authority as the case may be before whom it was filed.
9. The finding recorded by the Tribunal is vitiated and cannot be sustained. The dealer opp.party is claiming benefit of the aforesaid notification and it is for the dealer to show that it fulfils all the conditions mentioned in the notification. In the present ease, the dealer has not been able to establish that it has carried on the black-smithy work by not involving the use of power.
10. In the result the both revisions succeed and allowed and the order of the Tribunal is set aside. The order of the First Appellate Authority is restored with costs of Rs. 1,000/- (Rupees one thousand only).