GARRISON ENGINEER Vs. COMMISSIONER OF TRADE TAX

JUDGEMENT

(1.) PRESENT three revisions under Section 11 of the U.P. Trade Tax Act, 1948 (hereinafter referred to as 'the Act') are directed against the order of Tribunal dated May 10, 2007 relating to the assessment years 1993 -94, 1995 -96 and 1998 -99.

(2.) THE applicant is one of the departments of the Defence Ministry of the Central Government. During the years under consideration, the applicant had engaged contractors for the construction of building, etc., and supplied cement, steel, steel product, bitumen, etc., to the contractors and admittedly deducted the value of the materials while making the payment to the contractors. Admittedly, in all the three years the applicant had imported cement, steel, etc., from outside the State of U.P., which were supplied to the contractors. The claim of the applicant was that the supplies of the materials to the contractors were not sale inasmuch as such materials had been used in the construction of the own buildings of the applicant. The assessing authority had not accepted the plea of the applicant and had treated the supply of the materials, namely, cement, steel, steel product, bitumen, etc., as a sale. During the course of the assessment proceedings, the assessing authority required the applicant to furnish the details of the material supplied in each year and the payment deducted, but despite the time being allowed, such details have not been furnished. It appears that the copy of the contract and the payment schedule have also not been furnished. The assessing authority in the absence of necessary details, by way of best judgment assessment, estimated the turnover and levied the tax. Being aggrieved by the order, the applicant filed appeals and the matter was remanded back to the assessing authority with the direction to consider the agreement and the payment schedule. It appears that the applicant could not furnish the copy of the agreement and the payment schedule and have also not furnished the details of the goods supplied to the contractors and the payments deducted. The matter was remanded thrice for this purpose, but no details were furnished. The assessing authority on the basis of the material available on record relating to the import of the goods from outside the State of U.P., opening and closing stock, estimated the turnover for the assessment year 1993 -94, but could not levy the tax on the cement. The first appellate authority estimated the turnover of cement at Rs. 7 lakhs and levied the tax. The first appellate authority in the absence of any material affirmed the order of the assessing authority. Being aggrieved by the order, the applicant filed three appeals before the Tribunal. Before the Tribunal, the applicant contended that the supply of the materials was not sale inasmuch as the materials were used in the construction of own building of the applicant. It was further submitted that the estimate is arbitrary and without any basis. The Tribunal has not accepted the plea of the applicant that the supply of material was not sale in view of the decision of the apex court in the case of N.M. Goel and Co. v. Sales Tax Officer, Rajnandgaon reported in [1989] 72 STC 368 : [1990] UPTC 865, Rashtriya Ispat Nigam Ltd. v. State of Andhra Pradesh reported in [1998] 109 STC 425 : [1998] 13 NTN 472, Karya Palak Engineer, C.P.W.D., Bikaner v. Rajasthan Taxation Board, Ajmer reported in [2004] 136 STC 641 : [2004] 3 RC 254 : [2004] 25 NTN 1004.

(3.) LEARNED Standing Counsel submitted that the applicant was provided several opportunities to provide the details, but the details could not be provided. Therefore, assessing authority had no option except to estimate the turnover by way of best judgment assessment.