Court No. - 7
Case :- SALES/TRADE TAX REVISION No. - 275 of 2018
Applicant :- M/S Pawan Alloys And Casting Pvt. Ltd. Opposite Party :- The Commissioner, Commercial Taxes Counsel for Applicant :- Shubham Agrawal
Counsel for Opposite Party :- C.S.C.
Hon'ble Saumitra Dayal Singh,J.
1. Heard learned counsel for the parties.
2. In view of the submissions advanced, the question of law is reframed as under:
"Whether after accepting the principle that electricity consumption could not form the basis of making best judgment assessment the tribunal could have denied the consequential relief to the assessee by noticing variation in monthly consumption of electricity."
3. The present revision has arisen for assessment year 2012-13 (U.P) under the U.P. Value Added Tax Act, 2008 (hereinafter referred as to 'VAT Act'). The applicant is a registered dealer engaged in manufacture and sale of M.S. Ignot. For the assessment year 2012-13 (U.P.) it filed a return admitting tax liability at Rs.2,73,67,026.60/-.
4. It is submitted though the goods M.S. Ignot are liable to suffer duty under the provision of Central Excise Act and the same were in fact cleared only upon payment of duty at the time of clearance being made, the assessing authority under the VAT Act proceeded to reject the return of the petitioner and made a best judgment assessment wherein he enhanced the disclosed turnover of the M.S. Ignot from the Rs.68,41,75,665.00/-, by Rs.5,43,30,000.00/-. Also, consequently, the assessing authority further enhanced the estimated purchase of raw material (assumed to have been consumed in the manufacture of undisclosed M.S. Ingots), by Rs. 5,10,00,000.00/-.
5. The assessee carried in the matter in first appeal which was partly allowed and relief of Rs.32,07,200.00/- in the disputed tax was given to the assessee.
6. Being still aggrieved the assessee carried the matter in further appeal to the Tribunal. That has again partly allowed the appeal filed by the assessee and reduced the disputed tax further.
7. Relying on the finding recorded by the Tribunal itself, it has been submitted, once the Tribunal had accepted the principle -
electricity consumption could not form the basis for determination of estimated turnover and since it was further an admitted case of the department that there did not exist any other material to establish suppression of actual manufacturing or turnover of M.S. Ingots or excess stock of raw material, their is no justifiable criteria on which the Tribunal could deny part relief to the assessee.
8. In view of the above, it has been further submitted by Sri Shubham Agrawal learned counsel for the assessee that under the Central Excise Act and no quantity of those goods could have been cleared from the factory premises of the assessee except with the knowledge or the approval of the Central Excise Act. Inasmuch as there is no material to indicate any concealed clearance made by the assessee, the estimation of turn over cannot be sustained.
9. The Reliance has been placed on the decision of this Court in the case of M/s. Shyam Rice Mills Vs. C.S.T (1998) UPTC 375 as has been followed in M/s Abhinav Steels Private Ltd. Vs. The Commissioner, Commercial Tax (2017) UPTC 344.
10. Sri B.K. Pandey learned standing counsel appearing for respondent submits that in matters of best judgment assessment certain guess work is always involved and it is not for this court to make any estimation or to record findings or the fact. In any case it has been submitted that in the entirety of the facts and circumstances of the case, keeping in mind the fluctuation of electricity consumption substantial relief has been granted and the Tribunal has not erred in sustaining a minor enhancement.
11. Having heard learned counsel for the parties, while the quantum of enhancement may not be interfered with in revisional jurisdiction on an appraisal of facts and evidence, however, where the principle of law stands well settled the taxing authorities and appellate authorities have to accept the same and apply it with clarity and consistency in all assessment proceedings and not to seek or make variations contrary to the principle unless necessary distinguishing facts or circumstances are shown to exist to justify departure from the principle.
12. In the facts of this case, in absence of any material either in the shape of excise documents or other material to establish suppression of turnover, no part of the enhancement could have been sustained on account of the fluctuations in electricity consumption as that would be contrary to the principle itself. In absence of unexplained or glaring excess consumption of electricity or any corroborative material to support the enhancement of turnover, the enhancement sustained by the Tribunal has no legs to stand. To that extent the finding of the Tribunal is perverse and it cannot be sustained.
13. Accordingly, the question of law framed above is answered in the negative i.e. in favour of the assessee and against the revenue.
14. The revision is allowed.
15. No order as to costs.
Order Date :- 29.10.2018 Gaurav Pal