Court No. - 38
Case :- SALES/TRADE TAX REVISION No. - 1 of 2021 Revisionist :- M/S Johnson Matthey Chemicals India Private Limited Opposite Party :- Commissioner Of Commercial Tax U.P. Lucknow Counsel for Revisionist :- Krishna Agarawal Counsel for Opposite Party :- C.S.C.
Hon'ble Saumitra Dayal Singh,J.
1. Heard Sri Krishna Agarwal, learned counsel for the applicant and Sri Jagdish Mishra, learned Standing Counsel for the State.
2. The present revision has been filed against the order of the Commercial Tax Tribunal, Bench-4, Kanpur dated 26.11.2020 in Second Appeal No.194/2020 for A.Y. 2016-17 (Central). By that order, the Tribunal has granted part relief to the assessee and granted stay to the extent of 90% of the disputed amount of tax Rs.4,72,64,063/- during pendency of the first appeal filed by the assessee against the assessment order dated 31.10.2020.
3. The present revision has been heard on the following questions of law:
"I. Whether, the Tribunal and the Authority below have failed to consider the strong prima facie case in favour of the revisionist in view of the arbitrary demand based raised by the Respondent?
II. Whether, the Tribunal and the Authorities below in view of the judgment of the Division Bench in the case of ITC v. Commissioner Appeals [2005(184) E.L.T. 347], followed in Honda Siel Cars v. Commissioner of Commercial Taxes, Lucknow [2010 UFTC 1152] and KribhcoShyam Fertilizers Ltd. v. CST [2009 UPTC 626] as well as the decision in Pennar Industries Limited v. State of Andhra Pradesh [(2009) 3 SCC 177] and the decision of this Court in various cases, is justified in not granting complete stay to the revisionist during the pendency of first appeal?"
4. Submission of learned counsel for the applicant is that the disputed transactions being of stock transfer of goods, no tax was leviable in the State of U.P. on such movement of goods. The findings recorded by the assessing authority to the contrary are stated to be perverse, inasmuch as, neither any small quantities had been packed and dispatched on the same day to different persons nor is the order number referable to the order placed by the third party on the applicant for supply of any goods. That order number is an internal document prepared by the head office while placing an internal order to manufacture the goods.
5. In that regard, it has been submitted that the Tribunal has not afforded any reasoning to reject the prayer made by the applicant for grant of full stay.
6. Learned Standing Counsel has opposed the revision. He submits that the transaction performed by the assessee is one of sale and therefore a tax has been rightly levied.
7. Having heard learned counsel for the parties and having perused the record, the exact nature of the transaction is a matter which is engaging the attention of the first appellate authority, and therefore, no final conclusion may be drawn thereon at this stage.
8. However for the purposes of examining the prima facie case, it does appear that the plea raised by the applicant merits serious consideration, inasmuch as, in the ground of appeal it has been specifically disputed that there was no order placed by the third party. Even according to the chart which is part of the assessment order, it does not appear that different quantities of the same commodities were packed in different parts and dispatched on one date itself. Thus, at this stage, strong prima facie case does appear to exist in favour of the applicant as undisputedly in the event of the transaction being of stock transfer, no tax may remain leviable. However, at this stage itself, it may be clarified that the above observations are only tentative, made solely for the purposes of considering the plea raised by the applicant that their exists a strong prima facie case which has not been considered by the Tribunal and no consideration has been made thereto by the Tribunal which may enable the Court to examine the reasoning of the Tribunal. To that extent, the order of the Tribunal is not in conformity with law. Further considering the fact, the first appeal filed by the appellant is still pending, no useful purpose would be served in entertaining the present revision and seeking to answer the question raised by the parties that are ultimately to be determined by the order to be passed in the appeal itself.
9. Accordingly, the present revision is disposed of with a direction that the demand of disputed tax may remain stayed during pendency of the first appeal filed by the assessee subject to his furnishing bank guarantee to the extent of 95% of the disputed demand of tax and depositing balance demand 5% in cash. Further the appeal itself being first appeal no.KNP5/208/2020 for A.Y. 2016-17 (Central) may be decided, as expeditiously as possible, preferably within a period of three months. The applicant further undertakes not to seek any adjournment in the proceedings and to ensure early disposal of the appeal.
Order Date :- 8.1.2021 S.Chaurasia