Court No. - 1
Case :- SALES/TRADE TAX REVISION No. - 2324 of 2007 Revisionist :- M/S Prag Oil Mills Limited Ramghat Road Aligarh Opposite Party :- The Commissioner Of Trade Tax U.P. Counsel for Revisionist :- N.R. Kumar,Vishwjeet Counsel for Opposite Party :- S.C.
Hon'ble Saumitra Dayal Singh,J.
1. The present revision has been filed by the applicant- assessee against the order of Trade Tax Tribunal, Aligarh dated 30.7.2007 passed in Second Appeal No. 132 of 2001 for the A.Y. 1993-94 (U.P.). By that order, the Tribunal has upheld the demand of interest imposed against the assessee treating its liability to pay tax on purchase of oil seeds to be its admitted tax liability. Thus, the interest liability imposed under Section 8(1) of the U.P. Trade Tax Act, 1948 (hereinafter referred to as the Act) has been upheld.
2. Heard Sri Vishwjeet, learned counsel for applicant- assessee and Sri B.K. Pandey, learned Standing Counsel for revenue.
3. The present revision has been pressed on the following question of law:
"Whether on the facts and circumstances of the case the Tribunal was legally justified to treat the tax imposed and assessed on the tax paid purchases for want of form 3-C(2) to be admittedly payable by the applicant while the applicant has not admitted any tax liability on such purchases at any stage either in the return or in his accounts?"
4. Learned counsel for the assessee submits, the assessee is a registered dealer engaged in a manufacture and sale of vegetable oil. For that purpose, it purchased oil seeds from other registered dealers against promise to issue Form III-
C(2). Though Form III-C(2) were never issued by selling dealers, however, learned counsel for the assessee would submit that there is no dispute to the fact that those dealers were registered under the Act. In such fact, no liability of tax could ever be fixed on the assessee as it did not make the first purchase of the goods namely, oil seeds, inside the State of U.P.
5. In such factual matrix, though the assessee had deposited the tax imposed on purchase of oil seeds, it resists liability to pay interest thereon, by treating the same to be the admitted tax liability on the reasoning that the purchase made by it were exempt but that they came to be taxed only because of the inaction on part of the selling dealer, who did not issue the necessary Form III-C(2) to the assessee.
6. Reliance has been placed on the decision of the learned single Judge of this Court in Commissioner of Sales Tax Vs. S/s. Annapurna Mills, Varanasi, (1994 UPTC 182). In that case also, the selling dealer had not issued Form III-C(2) to the purchasing dealer with respect to purchase of food-grains. The learned single Judge reasoned that the dealer (in that case) had purchased food-grains from registered dealers and also in the preceding years, in similar circumstances, it had been held not liable to tax. On that reasoning, the learned single Judge held that the tax liability could not be treated as admitted tax liability under Section 8(1) of the Act, but that it would remain subject to Section 8(1-B) of the Act. That decision and reasoning appears to be applied in certain other learned single Judge decisions of this Court i.e. in Commissioner of Sales Tax Vs. S/s. Damodar Das Kalyan Das, Hathras, (1996 UPTC 589); Comissioner of Trade Tax, U.P., Lucknow Vs. S/s Ram Ratan Ambrish Kumar, Dhampur, [(2003) NTN (Vol-22) 522] and; Bishwambhar Nath Kishan Lal, Bijnor Vs. Comissioner of Trade Tax, U.P., Lucknow, [(2005) 2 VLJ 223].
7. On the other hand, learned Standing Counsel would submit, the view taken by the learned single Judge, as has been relied upon by the learned counsel for the assessee, does not lay down the correct law. In fact, those pronouncements are contrary to an earlier decision of the Division Bench of this Court in M/s Annapurna Biscuit Co. Vs. State & Ors., (1980 UPTC 130). That decision came to be followed with approval in later decision of the Division Bench of this Court in the case of The Comissioner Trade Tax, U.P., Lucknow Vs. S/s Control Switch Gears Ltd., Sector-2, NOIDA, (2010 UPTC 1073). In that decision, the Division Bench examined the entire spectrum of the decisions on the points and, thereafter, concluded as below:
"Applying the principles laid down by the Apex Court in the aforesaid cases and by the Division Bench of this Court in the case of M/s. Annapurna Biscuit Co. (Supra), we are of the considered opinion that in a case where concession/exemption is claimed which is dependant upon furnishing of prescribed declaration form and a dealer fails to furnish the declaration from up to the time of assessment or thereafter in appeal, than the tax payable on such purchases/sales would be leviable at the normal rate which would be the admitted tax and the liability to pay interest @ 2% per month starts from the last date of filing the return in respect of such sales till its actual payment. As held by the Apex Court in the case of Qureshi Crucible Centre (Supra), the question of mala fide does not arise and likewise in our considered opinion, there is no scope for applying the principles of legitimate expectation or hope or bona fide for avoiding the liability of payment of interest under Section 8(1) of the Act. The controversy stands covered by a decision of the Division Bench of this Court in the case of M/s. Annapurna Biscuit Co. (Supra) with which we are in respectful agreement with the view taken by it in so far as the levy of interest on account of non- furnishing of a declaration form is concerned."
8. Having thus reasoned, the Division Bench then concluded:
"In view of the foregoing discussions, we are of the considered opinion that -
1. Even though declaration form for claiming exemption/concession may be required to be filed during the course of assessment proceedings but, in cases of non-furnishing of declaration forms during the assessment proceedings or subsequent thereto in appeal, tax has to be levied at the normal rate which would become the admitted tax and interest under Section 8(1) of the Act would be leviable from the due date of the return in which turnover was disclosed and exemption/concession has been claimed and tax at the normal rate has not been paid. The provisions of Section 8(1-B) of the Act would not be applicable.
2. Non-furnishing of requisite form by the time of assessment proceedings or in appellate proceedings, the tax assessed at the normal rate would be treated as the tax admittedly payable under Section 8(1) of the Act.
3. There is no scope for consideration of legitimate expectation or hope or bona fide plea under Section 8(1) of the Act and the stage of determination of liability of tax for the purposes of Section 8(1) would be the date for filing the return.
Let the matter be placed before the appropriate Bench."
9. Having heard learned counsel for the parties and having perused the record, there can be no dispute or discussion as to whether the decision of the learned single Judge or the Division Bench would prevail. Insofar as there is no law shown contrary to the law laid down by the Division Bench in the case of S/s Control Switch Gears Ltd. (supra), there appears to exist no doubt that the liability that has been fixed against the assessee, was an admitted tax liability, as it is undisputed that the claim for exemption raised by the assessee was dependent on the issuance of the statutory forms and it is also admitted that no such statutory forms ever came to be issued. Therefore, the fact that the assessee may have actually made purchases of oil seeds from registered dealers or the fact that there was a promise on part of the selling dealers to issue Form III-C(2) would be of no avail, insofar as the revenue authorities are concerned. If the applicant- assessee claims such rights, as have been canvassed in the present revision application, it would have been for it to have approached a civil court for a proper remedy only against the selling dealer.
10. Insofar as the decision of the learned single Judge in S/s. Annapurna Mills, Varanasi (supra) is concerned, the same is wholly distinguishable as there is no preceding assessment in which the claim of the present assessee may have been allowed, in similar circumstances.
11. In view of the above, the question of law (as framed above) is answered against the assessee and in favour of the revenue.
12. Accordingly, the present revision is dismissed.
Order Date :- 31.7.2019 Prakhar