APOLLO TYRES LTD Vs. STATE OF U P

JUDGEMENT

(1.) By means of the present writ petition, the petitioner is seeking the following reliefs:

(2.) Brief facts giving rise to this writ petition are that the petitioner is a company duly incorporated under the Indian Companies Act, 1956 and is engaged in the manufacture and sale of automobile tyres, tubes and flaps. Its manufacturing unit is situated at Baroda in Gujarat, Cochin in Kerala and Pune in Maharashtra. The petitioner has branch office in the State of Uttar Pradesh at Meerut, which is registered both under the U.P. Trade Tax Act as well as under the Central Sales Tax Act. The branch office receives the goods by way of stock transfer and sells to its customers. For the assessment year 1998-99, the petitioner has been subjected to assessment vide order dated 28.2.2001. During the course of assessment proceedings, it has been disclosed that a sum of Rs. 4,28,27,644/-, towards the loss claim, has been deducted in the bill along with trade discount. The loss claim was under the scheme which provided that if any manufacturing defect was found during the warranty period in the tyre and then on the claim being made by the customers, the valuation of the loss of rubber and quantity of the rubber available in defective tyre were assessed and after taking the value of rubber loss new tyre and tubes were provided to the customers. The complete details were furnished during the course of assessment proceedings. The assessing authority had examined such loss claim with reference to the bill-wise details furnished and, thereafter, allowed the claim. Subsequently after the expiry of four years, from the end of the assessment year, the assessing authority was of the view that the loss claim to the extent of Rs. 4,28,27,644/- had been wrongly allowed and the said amount was liable to tax. Accordingly, proposal was sent to the Additional Commissioner for approval under the proviso to Section 21 (2) of the U.P. Trade Tax Act (hereinafter referred to as the "Act") to initiate proceedings beyond the period of four years. The Additional Commissioner granted approval vide order dated 29.8.2003. The Additional Commissioner was of the view that in accordance to Rule 44(b) of U.P. Trade Tax Rules (hereinafter referred to as the "Rules"), the goods should be returned within six months, while, in the present case, it is not so and, therefore, the claim has been wrongly allowed. In pursuance thereof, notice under Section 21 (1) of the Act was issued by the assessing authority. Both the order under Section 21 (2) of the Act and notice under Section 21 (1) of the Act are being challenged in the present writ petition.

(3.) Heard Sri S.D. Singh, learned counsel for the petitioner and Sri U.K. Pandey, learned Standing Counsel.