GAGAN HANDLOOM Vs. COMMISSIONER, COMMERCIAL TAX

JUDGEMENT

(1.) These revisions are against the order of the Tribunal dated August 22, 2009 for the assessment year 2004-05. The cases of the applicants are that they have imported cotton and cotton yarn and used the same in the manufacturing of handloom clothes. Handloom clothes are exempted under section 4 of the U.P. Trade Tax Act, 1948 (called "the Act", for short). Cotton and cotton yarn have never been sold. For the purchases, sales and manufacturing, the applicants have maintained regular books of account which have been produced before the assessing authority. Though the assessing authority accepted the manufacturing of clothes but has estimated the turnover of imported cotton on the ground that some imported cotton has been sold as such. The contention of the applicants is that there is no evidence that the cotton as such has been sold and has not been utilised in the manufacturing of clothes.

(2.) The learned counsel for the petitioner submitted that the burden lies upon the Revenue to prove that the cotton imported from outside the State has not been utilised in the manufacturing of clothes but has been sold. The Revenue has failed to establish its case.

(3.) The Tribunal has not considered that the applicants have maintained all the records relating to purchases, sales and manufacturing and without any material on record that the cotton has been sold as such upheld the order of the assessing authority.