COMMISSIONER TRADE TAX Vs. JAGDAMBA AGENCIES

JUDGEMENT

(1.) Present revision under Section 11 of the U.P. Trade Tax Act (hereinafter referred to as the "Act") is directed against the order of the Tribunal dated 20th June, 1996 relating to the assessment year, 1990-91by which the Tribunal has set aside the order passed under Section 10-B of the Act. Dealer/opposite party (hereinafter referred to as "Dealer") was parrying on the business of diesel engines. The assessing authority passed the assessment order on 25th February, 1995 and accepted the books of account and disclosed turnover of Rs. 11,79,200/-, Later on, Deputy Commissioner (Executive) issued notice dated 31st August, 1995 under Section 10-B of the Act. The notice was issued mainly on the ground that on the perusal of the record, it was found that the dealer had opening stock of 47 diesel engines and upto 31st July, 1990 the diesel engines have not been imported and 29 diesel engines imported against Form 31 No. 2227291 crossed Fatehpur Sikri check post on 31.07.1990, could be sold after 31st July, 1990 and total turnover by 31.07.1990 was disclosed at Rs. 3,47,200/-. Thus he was of the view that 47 diesel engines which were in the opening stock were available for sale at Rs. 3,47,200/- and according to which the selling rate comes to Rs. 7,387/- per diesel engine in this way, the profit earned should be Rs. 1 lac on the sale of only 47 diesel engines upto the period of 31st July, 1990. It has also been stated that for the period 1st August, 1990 to 31st March, 1991, the average selling rate per diesel engine shown was Rs. 5,262/- and the average purchase value was Rs. 5,470/-. Thus, it has been inferred that the lesser sale price has been disclosed. It has also been stated that as per details furnished closing balance was disclosed at Rs. 4,50,070/- while in the assessment order a sum of Rs. 5,50,070/- was mentioned. On the aforesaid fact dealer was asked to appear and explain the aforesaid discrepancy.

(2.) Counsel for the opposite party appeared on 12th September, 1995 and a short submission was tiled, in which it had been stated that the Trade Tax Officer, Sector-1, Fatehgarh had already issued notice under Section 21 of the Act. thus, the notice under Section 10-B of the Act is not justified. However. when Counsel was directed to file the reply on the objection raised in the notice under Section 10-B of the Act the Counsel stated chat he would give the reply subsequently and requested for the adjournment of the case and on his request, the case was adjourned to 17.10.1995. On 17.10.1995, no one appeared on behalf of the dealer. Thus, the Deputy Commissioner (Executive) proceeded ex parte and held that the assessment order was improper and illegal and estimated the taxable turnover at Rs. 15, 50.000/-. With regard to the notice issued under Section 21 of the Act, it was stated that the notice under Section 21 of the Act dated 28th March, 1995 was issued fixing 30th March, 1995 and the said notice was despatched on 31st March, 1995 and as per process server report dated 31st March, 1995 it was served by affixation. The Deputy Commissioner (Executive) was of the view that the service of the notice was illegal and it is not clear that why the notice under Section 21 of the Act was issued and the learned Counsel has admitted the service of the notice as proper just to misguide though in accordance to the various decisions of this Court it was not a valid notice. The opposite party filed appeal against the said order passed under Section 10-B of the Act before the Tribunal. Tribunal by the impugned order set aside the order under Section 10-B of the Act.

(3.) Tribunal held that as per the various decisions of the High Court and the Supreme Court, on the initiation of the proceedings under Section 21 of the Act, the action could not be taken under Section 10-B of the Act. It has been held that when the proceeding under Section 21 of the Act had been initiated to remove same defect, the proceeding under Section 10-B of the Act was not in accordance to the law. Tribunal further held that the order under Section 10-B of the Act appears to have been passed in hurry. Tribunal observed that in the order passed under Section 21 of the Act dated 30th September. 1995, assessing authority had considered the complete details of the opening stock, purchases, closing stock etc and held that the value of the diesel engines and closing stock were verifiable and the value of the closing stock at Rs. 5,50,070/- was mentioned by typographical mistake in the assessment order. Tribunal further observed that the assessment order was passed under Rule 41(8) on the basis of the various details which were got verified from the books of account and such details were also being verified in the proceeding under Section 21 of the Act. Tribunal further observed that if the Deputy Commissioner (Executive) would have passed the order after considering the order passed under Section 21 of the Act. the alleged objection could not survive. Tribunal. accordingly, set aside the order passed under Section 10-B of the Act