1. All these Revisions involve common questions of law and, therefore, have been heard together and are being decided by this common judgment.
2. Heard Sri Bharat Ji Agarwal, learned Senior Advocate, assisted by Sri Shubham Agarwal, learned counsel for Revisionist and learned Standing Counsel for Revenue.
Trade Tax Revision No. 141 of 2014:
3. This Trade Tax Revision has been preferred under Section 58 of Uttar Pradesh Value Added Tax Act, 2008 (hereinafter referred to as "Act, 2008") raising following questions of law formulated in para 40 of memo of revision:
(I) Whether in view of the decision of the Division Bench of this Court in the case of ITC Limited Vs. Commissioner (Appeals) 2005 ELT 347 (para 35), the complete dispensation of deposit of the amount should be allowed if the appellant-applicant has strong prima facie case and where two views are possible even if the appellant-applicant is running in good financial position?
(II) Whether none of three clauses of Section 25 (1) of Act, 2008 is applicable in the present case hence the assessing authority had no jurisdiction to make a provisional assessment order and the provisional assessment order having been passed only on account of seizure of the goods on 27.8.2013 on the technical ground of column no. 6 of Form-38 of the consignment being not filled and there being no material available on record with the assessing authority to show or establish that the applicant is suppressing the turnover of sale or purchase, hence in view of the law laid down by this Court in ITC Limited (supra) and in the case of Honda Siel Cards Ltd. Reported in 2010 UPTC 1152, the Tribunal was not justified in directing the applicant to deposit 20 % of the disputed amount of tax by completely overlooking the law laid down by this Court.
(III) Whether as per Section 25 (1) of Act, 2008, the provisional assessment order can be passed only on the basis of material available on record with the assessing authority, when it appears to the assessing authority that the turnover of sale or purchase disclosed by the dealer is not worthy of credence?
(IV) Whether in the present case, there is no material available on record with the assessing authority with respect to the undisclosed sales or purchases having been made by the applicant and hence no provisional assessment order could be passed only on the basis of seizure having been made against the applicant. Thus, the provisions of Section 25 (1) of Act, 2008 are not applicable in the present case of the applicant?
(V) Whether the Tribunal has erred in passing the impugned order without considering the specific grounds having been raised by the applicant that the provisions of Section 25 (1) of the Act, 2008 for the purpose of making the provisional assessment are not applicable in the present case of the applicant?
4. The revision has not arisen from final orders of appellate authorities below, but has arisen at an interlocutory stage.
5. The facts in brief are that a provisional assessment under Section 25 (1) of Act, 2008 for the month July' 2013 (Financial Year 2013-14) was proposed by Deputy Commissioner, Commercial Tax (II), Ghaziabad, vide notice dated 20.11.2012. After receiving reply from Revisionist-Assessee, he passed a provisional assessment order on 9.12.2013 determining tax liability of Rs. 4,37,32,036/- and after adjusting the amount already paid, raised a demand of Rs. 8,40,000/-. Thereagainst Revisionist-Assessee preferred Appeal No. 10 of 2014 and also sought for stay of requirement of deposit of entire demand/disputed amount demanded vide assessment order dated 9.12.2013. Appellate Authority, i.e., Additional Commissioner, Grade-II (Appeal)-2, Commercial Tax, Ghaziabad vide order dated 16.1.2014 granted stay to the extent of only 50 per cent of the disputed amount of Rs. 8,40,000/-. Thereagainst Assessee-Revisionist preferred Second Appeal No. 72 of 2014 which has been decided by Tribunal vide order dated 20.1.2014 staying 80 per cent of disputed amount and permitting Assessee to furnish security of stayed amount within 30 days. It is this order, which has caused grievance to Assessee giving rise to the present revisions since according to his version he is entitled for stay of 100 per cent against demand of disputed amount and the appellate authorities below have committed error in not granting complete stay, as sought for by Revisionist.
6. All other Revisions, i.e., Trade Tax Revision No. 142 of 2014, Trade Tax Revision No. 143 of 2014 and Trade Tax Revision No. 144 of 2014, involve same facts, except the difference that they pertain to difference months, i.e. August' 2013, September' 2013 and October' 2013 respectively, but the questions of law and basic facts are common and, therefore, this Court is considering factual details only in the context of Trade Tax Revision No. 141 of 2014 for the purpose of adjudicating the questions of law raised and argued.
7. Sri Bharat Ji Agarwal, learned Senior Advocate, appearing for Revisionist, contended that no prima facie case was made out so as to authorize Assessing Authority to make a provisional assessment order under Section 25 (1) of Act, 2008 and, therefore, entire proceedings culminating in the order of assessment, appealed before the First Appellate Authority was patently illegal and looking to this aspect of the matter, appellate authorities must have allowed stay application of Revisionist-Assessee in entirety, by dispensing with requirement of deposit of disputed tax, altogether. Since both the appellate authorities have failed to do so, impugned orders suffer in law. He placed reliance on the authorities of this Court in I.T.C. Ltd. Vs. Commissioner (Appeals), Custom and Central Excise, Meerut-I 2005 (184) ELT 347 (All.) (DB) and Rathi Super Steel Limited Vs. Commissioner of Commercial Tax 2013 NTN (53) 204.
8. Learned Standing Counsel, however, opposed revisions and contended that at the stage of granting interim order with regard to question, whether the entire disputed amount should be stayed or not, Appellate Authority has to look into not only the prima facie case but all other relevant aspects of the matter and this having been done, no interference is called for. He submitted that once a serious flaw in Form-38 has been found by Assessing Authority, which gives genuine and sustainable ground to satisfy him that there is an evasion of tax, it cannot be said that provisional assessment has not been made validly and Appellate Authority, in these facts and circumstances, is wholly justified in granting indulgence, that too, substantially, in favour of Assessee. Hence no interference is called for at this stage.
9. In the present case, occasion to pass provisional assessment order has been derived by Deputy Commissioner from the factum that in the checking conducted by Mobile Squad on 22.8.2013, vehicle no. HR 38Q 1200 was found loaded with 46.360 metric ton of H.R. Coils. The driver of vehicle possessed consignment notes, and, besides other documents, Form-38 having Column 6 completely blank. It did not mention bill number and date in both the copies possessed by Driver. Keeping Form-38 blank in the above column may help Assessee in reuse of Form to evade tax and, therefore, in addition to violation of Section 50 of Act, 2008, it is also in contravention to the Commissioner's Circular No. 0910015 dated 3.6.2009. The Mobile Squad Officer issued a show cause notice and ultimately required Assessee to furnish security of Rs. 8 lacs and odd on the estimated value of goods and thereafter the same was released. All these aspects have been taken note by the Assessing Authority and the existence of these facts is not disputed.
10. The Assessee admitted that Column 6 of Form 38 did not find mention with the invoice number and date, but denied any lapse on its part stating that Form-38 is filled in by Consignor and not the Consignee, hence, he (the Assessee) cannot be penalized for the lapse on the part of Consignor. He also said that Column-6 of Form-38 was left blank due to oversight. The goods were transported against GR 75072/TFBD27C/561 dated 19.8.2013 which had invoice number, date, item, quantity, weight, value and vehicle number. Transaction was duly recorded in regular books of accounts, hence no adverse inference was liable to be drawn against Assessee. The argument that notice is founded on possibility and suspicion which would not justify penalty or provisional assessment under Section 25 (1) of Act, 2008, and the case for provisional assessment would not fall in either of Clauses of Section 25 (1), hence, no provisional assessment was justified, has been considered by Assessing Authority in the order dated 9.12.2013 wherein it has stressed upon importance and relevance of Form-38, Column-6 and has said:
^^QkeZ&38 dk dkye&6 cgqr gh egRoiw.kZ dkye gS tks eky dk lEcU/k lkFk gh vU; izi=ksa [email protected] buokbl vkfn ls tksM+rk gS A bldh ewyizfr eky ds vk;kr ds rqjUr ckn dk;kZy; esa tek djuh iM+rh gS rFkk blds gh vk/kkj ij djfu?kkZj.k fd;k tkrk gSA blh ls QkeZ&38 dk lEcU/k fcy ls tqM+rk gSA tc QkeZ Hkjus okys deZpkjh }kjk QkeZ ds vU; dkye Hkjs x;s Fks ml le; dsoy dkye&6 ftlds vk/kkj ij djfu/kkZj.k fd;k tkrk gS] [[email protected] NksM+ nsus ls djkioapu dk bjknk fcydqy Li"V gSA fnYyh ls O;kikjh ds O;kikjLFky dh nwjh bruh de gS fd ,d QkeZ&38 ij ,d fnu esa vklkuh ls dbZ ckj eky yk;k tk ldrk gSA ;s ifjfLFkfr;kWa Lo;a esa nqjk'k; dk izek.k gSaA^^ English Translation by the Court:
"Column 6 of Form-38 is a very important column, which correlates goods to other documents like bill/invoice etc. Its original copy, immediately after goods being imported, has to be submitted with the office and on this very basis, the tax is assessed. Only this correlates Form-38 with the bill. The intention of tax evasion is quite evident when other columns of the form were filled by the employee concerned and only column 6, providing basis for tax assessment, was left blank/incomplete. The distance of merchant's place of business from Delhi is so minimal that goods can easily be transported several times in a day using a single Form-38. These circumstances themselves are proofs of malafide intention."
11. The Assessing Authority has also followed a decision of this Court in Multitex Filtration Engineering Ltd. Vs. C.C.T. 2009 NTN (Vol. 40) 389, where this Court has observed, "According to me, mentioning of challan, bill and Invoice numbers in the declaration form is very material. By filling column No. 6 and mentioning invoice, bill or challan numbers the declaration form can be corelated with the goods covered by invoice or challan. ... Perusal of the said form reveals that all Columns have been filled except column No. 6. When the applicant was filling all the columns, there cannot be any possible reason why he has left filling column No. 6. This appears to be deliberate. ... Non-filling of column No. 6 i.e. non-mentioning of challan number or invoice number may lead to an inference that in case of non checking of the goods, the said declaration form may be used for any other consignment of a similar quantity, quality, weight and value." It is in these facts and circumstances, the Assessing Officer has also found that Form-38 in question was not signed by Consignor and it shows that it was not filled in by Consignor, but by Assessee itself, who left Column 6 blank deliberately. Assessing Authority from the discussion made in the impugned order, some of which are referred to hereinabove, formed an opinion that turnover of sale or purchase or both declared by Dealer is not worthy of credence and thereby assumed jurisdiction for making provisional assessment and has passed the order appealed before First Appellate Authority.
12. In the memo of appeal, the Assessee has reiterated all the grounds which it has taken before Assessing Officer. Since those aspects have already been considered and prima facie case against Assessee has been found, it cannot be said that Assessing Authority's order is apparently without jurisdiction. In any case, this is a issue which was before Assessing Authority and having been considered by it, now has to be considered by Appellate Authority where the Revisionist's appeal is pending. Apparently, it cannot be said that Assessing Authority lacked patent jurisdiction or there is no prima facie case whatsoever. It is true that while passing order on the stay application of Assessee, both the Appellate Authorities have not stated in so many words about prima facie case etc. but a combined reading of all the orders, aforesaid, leads to no otherwise inference but what has been discussed and stated above. The merits of entire case, as such, is not to be discussed by the appellate authority at the stage when it has to consider the stay application as that would otherwise prejudice the interest of either of parties, but the only thing which Appellate Authority must show that it has applied its mind in considering the matter in accordance with law. The Tribunal has already granted indulgence to Assessee by staying requirement of deposit of disputed amount to the extent of 80 per cent and in the facts of this case, I do not find any patent error therein.
13. The First Appeal has been preferred under Section 55 of Act, 2008 and Sub-section (3) thereof provides that no appeal against an assessment order shall be entertained unless the appellant has furnished satisfactory proof of payment of amount of tax or fee due under the Act or admitted by him, whichever is greater. Sub-section (6) thereof, however, confers power upon Appellate Authority to stay realization of disputed amount of tax, fee or penalty till disposal of appeal. It is this power, which has been exercised by Appellate Authority while staying deposit of 50 per cent of disputed tax, which has been increased by Tribunal to 80 per cent and now Assessee is required to deposit only 20 per cent.
14. The question is, whether requirement of 20 per cent of disputed tax by Assessee having not been stayed by the authorities below, have they committed any patent error of law and can it be said that impugned orders have been passed without any application of mind or proper application of mind?
15. The first requirement of Section 55 of Act, 2008 is that no appeal against an order of assessment is entertainable unless appellant has deposited the amount of tax or fee, due under the Act or admitted by him, whichever is greater. So far as admitted amount is concerned, there is no dispute and no argument has been advanced otherwise that it has to be deposited. The dispute relates to "amount due", meaning thereby, an amount which has been demanded vide order of assessment passed under Act, 2008 whereagainst appeal is preferred, provided it is greater than the admitted amount. When an order is passed against Assessee, whereagainst Assessee comes in appeal, almost invariably it would be a case where "amount due" would be higher than the admitted one, and, thus only the occasion will arise for invoking jurisdiction under Sub-section (6) seeking stay of deposit of such amount. In order to exercise such power of stay, Appellate Authority as to examine various aspects which will include the interest of appellant as well as the Revenue. In various judicial precedents, it has been explained that Appellate Authority must find out first whether appellant has make out a prima facie case in the appeal so as to enable the Appellate Authority to grant stay order in favour of appellant. To my mind, the power of stay is not unbridled, uncontrolled and absolute to the extent of arbitrariness. It cannot be exercised whimsically and on conjectures and surmises. Before granting stay order, the general principles in such matters must be applied. A prima facie case, balance of convenience and if necessary, even the concept of irreparable loss can be looked into in such matter. For example, if the amount required to be deposited is phenomenally higher and Assessing Authority finds that apparently from the very bare reading of order appealed, it does appear that such amount is not justified or ultimately may not stand, it may exercise power of stay conferred under Sub-section (6). Similarly, one of the consideration is capacity of Assessee vis-a-vis demand raised by Assessing Authority in the order appealed. No thumb rule can be applied to such matters, but one thing is clear that when we say that a prima facie case has to be looked into by Assessing Authority, it does not mean that it has to go to the extent of saying that it must find out and hold that Revenue has no case at all, despite the fact that an order is existing in its favour, which has been appealed by other side. A prima facie case means the grounds taken by the appellant, if considered ex-parte, there appears to be some force therein subject to what is said by other side, but that cannot be equated as if Revenue has no case. Simultaneously, it also cannot be presumed that when a prima facie case is found in favour of appellant, it would mean that Revenue has no case and, therefore, Assessee is entitled, as a matter of right, for grant of stay of the entire disputed amount.
16. There are two stages/phases of the matter. One, whether a stay order should be granted at all and secondly, to what extent the stay order should be granted. The requirement of prima facie case, to be shown by appellant, is one but initial factor which would justify exercise of power of stay by Assessing Authority, but then to what extent stay order should be granted, it shall depend on multiple factors and reasons, which may vary from case to case. In the present case, discrepancy in respect to one of the important document is admitted. Though the Assessee has attempted to explain it, but it has not been believed by the authority at the initial level. Now its credibility has to be examined by Appellate Authority. At the stage of granting stay order, it cannot be presumed that credibility must be believed by Appellate Authority, without anything more. In all the authorities cited at the bar in support of questions raised in these revisions to seek favour for Assessee, it has been held that Appellate Authority should apply its mind to the question whether stay order should be granted and if so, to what extent. The power should not be exercised mechanically or on conjectures and surmises or in an arbitrary manner. Simultaneously, it also cannot be said that mere existence of a prima facie case, bereft of all other relevant factors, would justify grant of stay order to the extent of 100 per cent. After all, Appellate Authority has to adopt a balancing approach in favour of both the parties and cannot proceed to go out and out to support appellant's case though correctness of the order passed by authority below is yet to be examined by it. It is also true, when stay order is granted, it does not mean that the assessment order stands wiped out for all purposes. On the contrary, it shall continue to exist until set aside. Therefore, when an order is continuing, in order to nullify liability raised therein, strong reasons and factors, in addition to existence of a prima facie case, must have to exist and must be shown by appellant, failing which, as a matter of right, it cannot be claimed that 100 per cent stay order must be passed. Any other view would nullify the scope of judicious discretion to be exercised by Appellate Authority while granting stay in exercise of power under Section 55 (6) of Act, 2008. Learned counsel for revisionist, however, has failed to satisfy this Court also that Assessee must have been granted 100 per cent stay.
17. So far as question no. 1 formulated in para 40 of memo of revision is concerned, it is nothing but reiteration of observations made by Division Bench of this Court in ITC Limited Vs. Commissioner (Appeals) (supra), and, therefore, it cannot be said that this question has arisen in this matter, since it is nothing but what has been held therein, but I do not find that it applies to the case in hand, since at this stage it cannot be said that two views are not possible or there is strong prima facie case in favour of Assessee-Revisionist so much so that Revenue has no case at all or that there is no prima facie case in favour of Revenue. The Question No. 1, therefore, is answered against Assessee.
18. Similarly, Questions No. 2 and 3 are also answered against the Assessee holding that a prima facie case has been made out by Revenue for making provisional assessment, carved out by Section 25 (1) (iii) and, therefore, watching interest of both the parties, it cannot be said that Tribunal was unjustified in directing Assessee-Revisionist to deposit 20 per cent of disputed amount and grating stay of 80 per cent thereof. Both these questions are also answered against the Revisionist-Assessee.
19. Question No. 5, in view of above discussion, is also answered against Revisionist. So far as Question No. 4 is concerned, I find, it ought not be answered at this stage, since appeal is pending before First Appellate Authority and answering this question will amount to adjudication of the grounds taken by Revisionist-Assessee in appeal and, therefore, left unanswered at this stage.
20. In the result, all the revisions are dismissed. No costs.
Dt. 19.02.2014 PS