COMMISSIONER, TRADE TAX Vs. LAXMAN DAS KRISHNA MURARI

JUDGEMENT

(1.) THE present revision is directed against the order dated March 8, 1995 passed by the Trade Tax Tribunal, Bareilly in Second Appeal No. 88 of 1991 for the assessment year 1984 -85.

(2.) THE dealer -opposite party carried on the business of purchase and sale of foodgrains and oil seeds, etc. The original assessment order under rule 41(7) of the Rules framed under the U. P. Sales Tax Act for the assessment year 1984 -85 was framed on March 17, 1988. The claim of exemption as set out by the dealer -opposite party on the ground that it had made tax -paid purchases against forms IIIC(2) and IIIC(5) was allowed. Subsequently, on verification it was found by the Department that certain forms IIIC allegedly issued by M/s. Yadav Traders, Mandi Samiti Konch, Jalaun were found to be fabricated and forged. It was found that these forms were never issued by the assessing authority to M/s. Yadav Traders, Jalaun and, therefore, the said party never issued these forms to the dealer -opposite party. On this basis, the assessing authority had reason to believe that the exemption on the basis of the forged forms was allowed wrongly. Proceeding under Section 21 of the Act to determine the escaped turnover was initiated. The assessing officer, after serving a show -cause notice and affording the opportunity to the dealer -opposite party, passed an order dated August 29, 1989 under Section 21 of the Act creating a liability of Rs. 16,692.68 paise. It also demanded the interest at the rate of two per cent per month on it. The said order was challenged unsuccessfully before the first appellate authority. In further appeal, the Tribunal by the order under revision, has upheld the levy of tax. The said part of the order has attained finality as it has not been challenged any further by the dealer -opposite party. The Tribunal has further deleted the levy of interest relying upon a Division Bench judgment of this Court in Annapurna Biscuit Manufacturing Co. v. State of Uttar Pradesh : [1982] 50 STC 56 (All) : [1980] UPTC 1320. This part of the order is under challenge in the present revision.

(3.) THE contention of the learned Standing Counsel for the Department is that the Tribunal was not justified in deleting the interest component from the liability of the dealer -opposite party. The submission is that forms IIIC(2) having been found to be forged and fictitious documents, consequently the liability of tax on such purchases is the admitted liability of dealer -opposite party who is under statutory liability to pay the interest on the said turnover covered by form IIIC(2). The learned Counsel for the assessee, on the other hand, submits that in view of the judgment of this Court in the case of Annapurna Biscuit Manufacturing Co., [1982] 50 STC 56 :, [1980] UPTC 1320, the Tribunal has committed no illegality in holding that the dealer -opposite party is under no legal obligation to pay the interest.