COMMISSIONER TRADE TAX Vs. CARBON INDIA

JUDGEMENT

(1.) HEARD Sri Sanjeev Shankdhar, learned counsel for the revisionist and Sri S.M.K.Chaudhary for opposite- party. The brief facts of the case are that the assessee has established a new unit for manufacture and sale of carbon papers, typewriter ribbons, paper pins, Jam clips, sealing wax and stamp pad ink and was issued an eligibility certificate under Section 4-A of the Act by Joint Director, Industries, Allahabad on 28.2.1986 for a period of 5 years with effect from 1.1.1985. Later, it was found by the department that during the period of exemption, the assessee has charged sales-tax on 19.3.1986 from M/s UPSRTC Allen Forest Kanpur but the same was not deposited with the Trade Tax Department. Further it was found that machine for use of M/s Carbon India was said to be fabricated by M/s S.R. Engineering Works which was not a registered firm. It was also observed by the Commissioner that such machines were special machines which are manufactured by M/s Udai Engineering Works, Calcutta which was also an unregistered firm. So, the Commissioner has cancelled the eligibility certificate vide its order dated 30.12.1991 specially for illegally charging the sales-tax and not depositing the same in the Exchequer. The A.O. levied the penalty vide its order dated 31.3.1993/1.6.1995 for the assessment year 1987-88 under Section 15-A(1) (qq). The matter finally reached to the Tribunal. The Tribunal after hearing both the parties observed that a survey was conducted on 31.10.1995 at the business premises of the assessee. During the survey, it was found that all machines were the new machines. Further, it was observed that M/s S.K.Engineering Works were in fact doing only cleaning and small repairing work. In these circumstances, the Tribunal finally observed that there is no material on record to justify that the assessee has used any machine which was earlier used or acquired for use by any other factory or workshop in India. Finally, the Tribunal has set aside the cancellation of eligibility certificate. Regarding penalty under Section 15-A (qq), the Tribunal observed that the sales-tax has been charged on the sales by way of credit notes but in the invoices entries were reversed immediately. The net result was that no sales-tax was actually charged from the bill pertaining to M/s UPSRTC Allen Forest, Kanpur & others. The sales-tax by way of credit notes was charged by mistake but in invoices entries were reversed. Actually, there was no collection of sales-tax by the assessee. With this background, I have heard both the parties and gone through the material available on record. The Tribunal after examining the entire material observed that the assessee has not used any machine which was earlier used or acquired for use by any other factory or workshop in India. During survey, it was found by the survey team that all the machines were the new machines as per their letter dated 2.11.1985. M/s S.K.Engineering Works were in fact doing only cleaning and small repairing work. It has not supplied any old machine. Hence, I uphold the order of the Tribunal who has already examined the facts after hearing both the parties. Regarding penalty under Section 15-A(qq), it appears that by mistake sales-tax was charged on the bills on the basis of credit notes but in invoices the entries were immediately reversed. In fact, no actual sales-tax was charged. When tax was not collected then there is no question of depositing the same in exchequer. In the light of above discussions, I find no reason to interfere with the order of the Tribunal. No substantial question of law emerges. In the result, the revision preferred by the department is devoid of merits and is hereby dismissed.