Court No. - 59
Case :- SALES/TRADE TAX REVISION No. - 268 of 2007 Revisionist :- M/S Markwell Paper Plast Pvt. Ltd.
Opposite Party :- The Commissioner Trade Tax U.P. Lucknow Counsel for Revisionist :- Piyush Agrawal,Bharat Ji Agarwal,Pooja Talwar Counsel for Opposite Party :- S.C.
Hon'ble Saumitra Dayal Singh,J.
1. Pursuant to last order, the present revision has been pressed on the following questions of law:
(1). Whether re-asssessment proceedings could have been initiated solely on the basis of certain photo-copy invoices, without any further evidence to verify such photo-copies?
(2). Whether even otherwise, any addition could have been made on the basis of such photo-copy invoices, in absence of any other evidence to establish performance of such transaction?
2. Accordingly, the matter has been proceeded.
3. The present revision has been filed by the assessee against the order passed by Trade Tax Tribunal, NOIDA, dated 7.4.2007, in second appeal no. 72 of 2003, for A.Y. 1997-98 (U.P.). By that order, the Tribunal has allowed the revenue's appeal and set-aside the first appeal order. Thus, the re-assessment order passed under Section 21 of the U.P. Trade Tax Act, 1948 (hereinafter referred to as the 'Act') has been affirmed.
4. During the assessment year in question, the assessee was engaged in manufacture and sale of flexible plain/printed metallized films. Under it's business practise, it issued invoice of quadruplicate. The original was issued to the purchaser while one copy each was issued to the transporter and the excise authorities. The fourth copy was retained by the assessee. Its original assessment was concluded by order dated 15.1.2000, wherein books of account of the assessee were accepted.
5. Subsequently, information was received by the assessee's assessing officer in the shape of alleged photocopies of four invoices, all bearing no. 0012 dated 18.4.1997. Each photocopy invoice was with respect to different transaction. Therefore, a reason to believe was entertained that turnover had escaped assessment.
6. In the re-assessment proceedings, the assessee denied the information received by the assessing officer as false. It completely denied having engaged in any undisclosed sale of goods.
7. Though, the details of the alleged purchasers were mentioned in the photocopied invoices being M/s Vishakha Chemicals, Techno Park; M/s Jagat Pal Prem Chand and; M/s Murari Lal Harish Chandra, no enquiry appears to have been made from those persons. The original invoice book of the assessee also did not support the allegations made against it. There was no other evidence received by the assessing officer in support of the allegation levelled by him. Yet, the additions were made to the undisclosed turnover of the assessee on the basis of the information received in the shape of four photocopied invoices.
8. The first appeal authority accepted the contention raised by the assessee and held that, other than the four photocopy documents, claimed to be copies of undisclosed invoices, there was no material in support of the allegation made against the assessee. The Tribunal has reversed those findings on the reasoning that the printing on the photocopied invoices is comparable to the original printing of the similar invoices, issued by the assessee.
9. Heard Ms. Pooja Talwar, learned counsel for the applicant-assessee and Sri B.K. Pandey, learned Standing Counsel for the revenue.
10. Learned counsel for the assessee would submit, other than the four photocopied invoices received by the assessing officer from unknown source, there was no material to initiate the re-assessment proceedings. Insofar as the assessing officer did not seek verification of that invoice and blindly initiated the re-assessment proceedings, the same are wholly without jurisdiction. Also, it has been submitted, in any case, mere reliance on the photocopied documents may never be enough to create liability of tax. No enquiry was conducted to determine the correct facts and there was no reliable material on record to establish undisclosed transactions performed by the assessee. The re-assessment order is wholly contrary to law.
11. Learned Standing Counsel, has opposed the revision and submits, insofar as the initiation of the re-assessment proceedings is concerned, the same did not suffer from any defect as it was based on valid information received by the assessing officer. Insofar as the merits of the additions is concerned, it has been submitted, there being no discrepancy in the photocopied invoices and other original invoices as to the printing etc., the Tribunal has rightly reached the conclusion that photocopied invoices had also been issued by the assessee.
12. Having heard learned counsel for the parties and having perused the record, in the first place, there is no defect in the initiation of the re-assessment proceedings, as reason to believe to initiate re-assessment proceedings may arise either on oral or written information. A written information may also be received in various forms including photocopy of documents, etc. Insofar as the present case, the re-assessment proceedings were initiated on the basis of a reason to believe that the transactions represented by the photocopies of invoices had escaped assessement, the same did not suffer from any jurisdictional error. For the purpose of recording a valid reason to believe, it was neither required nor necessary for the assessing authority to first confirm whether an addition would necesssarily follow. That degree of proof was not required to be satisfied at that stage. Insofar as the assessing authority received information, that assessee had engaged in sales outside books and he further received information in shape of photcopy invoices in support of that allegation, there was relevant material to form the reason to believe that turnover had escaped assessment. It's sufficiency is not a matter to be considered at that stage.
13. Accordingly, question of law no. 1 (as framed above), is answered in the affirmative i.e. against the applicant- assessee and in favour of revenue.
14. Merely, because the re-assessment proceedings may have been validly initiated, may not result in additions. It being undisputed to the revenue that the evidence being relied, was not in the shape of any evidence received from any source, but only alleged photocopy of invoices, a heavy burden lay on the revenue to establish that the transactions mentioned on such photocopied documents had actually being performed. In that regard, the revenue has completely failed to make any enquiry either from the alleged purchasers namely M/s Vishakha Chemicals, Techno Park; M/s Jagat Pal Prem Chand and; M/s Murari Lal Harish Chandra, though their addresses were mentioned on the photocopied documents. Also, the revenue authorities have completely failed to make any enquiry from the purchaser, to whom the original invoice no. 0012 may have been issued, to establish whether that transaction had been validly performed.
15. Therefore, the revenue failed to establish that any turnover had escaped assessment at the hands of the assessee. The first appeal authority had deleted the same and the Tribunal has erroneously reversed that order by referring to a similar nature of printing on the photocopied documents, as compared to the other original invoices issued by the assessee, when admittedly no original document or invoice, with respect to alleged escaped transactions had been produced by the revenue. Therefore, in absence of any other direct or corroborative material or evidence to establish undisclosed turnover, the findings recorded by the Tribunal are found to be perverse and based on no evidence.
16. In view of the above, question of law no. 2 (as framed above), is answered in the negative i.e. in favour of the assessee and against the revenue.
17. Accordingly, the revision is allowed.
Order Date :- 26.8.2019 Prakhar