CONTINENTAL CEMENT COMPANY Vs. COMMISSIONER, TRADE TAX

JUDGEMENT

(1.) PRESENT revision under Section 11 of the U.P. Trade Tax Act, 1948 (hereinafter referred to as "the Act") is directed against the order of the Tribunal dated June 22, 2007 relating to the assessment year 1999 -2000.

(2.) THE applicant was engaged in the business of manufacture and sales of cement. The assessing authority passed the original assessment order under Section 7 read with Rule 41 on February 28, 2001. It appears that thereafter proceeding under Section 21 of the Act was initiated after the expiry of two years. After giving opportunity of hearing to the applicant, the assessing authority passed the assessment order on June 25, 2004 estimating the suppressed sales. Aggrieved by the order passed under Section 21 of the Act, the applicant filed an appeal before the Joint Commissioner (Appeals), Trade Tax, Saharanpur. The Joint Commissioner (Appeals), Trade Tax, Saharanpur, vide order dated August 2, 2004 allowed the appeal, set aside the order passed under Section 21 of the Act and remanded back the matter to the assessing authority for fresh adjudication. Being aggrieved by the order of the Joint Commissioner (Appeals), Trade Tax, Saharanpur, the applicant filed appeal before the Tribunal, who vide order dated Mach 29, 2006 dismissed the appeal. Being aggrieved by the order of the Tribunal, applicant filed Trade Tax Revision No. 801 of 2006. In the aforesaid revision, it was submitted that initiation of proceeding under Section 21 of the Act was barred by limitation inasmuch as the notice under Section 21 of the Act was issued without obtaining the sanction from the Additional Commissioner. It was further submitted that at the time of issue of notice, there was no material which led to form the belief that there was escaped assessment and the reason has not been recorded while issuing the notice under Section 21 of the Act which is required to be recorded in view of the Circular issued by the Commissioner. This Court vide order dated February 9, 2007 [Reported as Continental Cement Factory v. Commissioner, Trade Tax, U.P., Lucknow [ : 2009] 24 VST 358 (All)] allowed the revision, set aside the order of the Tribunal and remanded back the matter to the Tribunal to decide the three issues, namely, (1) whether the notice under Section 21 of the Act was issued before obtaining the approval from the Additional Commissioner and if it is so, what is its effect, (2) whether at the time of issue of notice, there was material which led to form the belief that there was escaped assessment and (3) whether in view of the circulars, reason should be recorded and in case, if the reason has not been recorded whether it would invalidate the proceeding under Section 21 of the Act. After the remand of the case, the Tribunal has decided the appeal by the impugned order dated June 22, 2007 and dismissed the appeal.

(3.) LEARNED Counsel for the applicant submitted that the Tribunal has not considered the direction given by this Court. He submitted that the Tribunal has admitted that the sanction was granted by the Additional Commissioner on August 23, 2002, but there is no reference of any notice issued under Section 21 of the Act thereafter. He submitted that the order of the Tribunal itself shows that the notice under Section 21 of the Act was issued by the assessing authority on July 21, 2002 fixing the date of hearing on September 9, 2002. This prima facie shows that the notice under Section 21 of the Act was issued prior to the grant of sanction by the Additional Commissioner and, therefore, the entire proceeding was illegal and without jurisdiction. In support of his contention, he relied upon the decision of the Division Bench of this Court in the case of Manaktala Chemicals Pvt. Limited v. State of U.P. reported in, [2007] 5 VST 284 :, [2006] UPTC 1128, in which the notice issued under Section 21 of the Act prior to obtaining of the sanction by the Additional Commissioner under the proviso to Section 21(2) of the Act has been held illegal.