SOMNATH DEY Vs. C T O

JUDGEMENT

(1.) THE applicant before us is a partner of Luxmi Narayan Steel Industries of Andul Road, Chunubhati, Howrah, which is engaged in manufacture of M.S. round bars and ribbed bars, and is a registered dealer on that count. The firm claims that it also takes material from other dealers for conversion of the same into M.S. round bars and ribbed bars against conversion charges. During the period of four quarters ending on March 31, 1987 the firm had a gross receipt of Rs. 34,60,794.77. The firm's case is that out of the said gross receipt, Rs. 9,64,287.50 was received as conversion charges and that the said amount of conversion charges consisted of Rs. 3,31,622.50 as received from Jaiswal Steel Industries and Rs. 6,32,665 as from Steel and Hardware Stores, of 23A, Netaji Subhas Road, Calcutta. During the assessment, the Commercial Tax Officer (hereinafter referred to as, "the CTO") while allowed receipt of Rs. 3,31,622.50 as conversion charge, disallowed the balance amount on the ground that Steel & Hardware Stores was, on local verification, found non -existent at the given address. The applicant alleges that the C.T.O. rejected books of accounts and treated the said transaction of alleged conversion work as sale suppression. Fixing the conversion charge of Re. 1 per k.g. the C.T.O. concluded that 632.665 metric tons of finished products were involved in such suppressed sale. Taking Rs. 7 as the sale price of a kg. of the finished product the C.T.O. fixed the value of the sale involved at Rs. 44,28,655 and assessed tax accordingly and levied also interest and penalty thereon. Aggrieved by such levy of tax, interest, etc., the applicant preferred an appeal, but the appellate authority (respondent No. 2) affirmed the assessment order. After a revision was filed, the West Bengal Commercial Taxes Appellate and Revisional Board (the revisional authority) affirmed the rejection of books of accounts and also approved the enhancement of gross turnover ; but the Board set aside the order of assessment and the order of the appellate authority on the ground that the basis for calculations was wrong. The imposition of penalty and interest was also set aside on the ground that the same was illegal and arbitrary. The applicant -firm dissatisfied with the decision of the Board relating to conversion job, has filed before this Tribunal the instant application under Section 8 of the West Bengal Taxation Tribunal Act, 1987.

(2.) THE main contention of the applicant -firm is that the respondents not having found any discrepancy in the books of accounts should not have treated a part of the receipt for conversion jobs as turnover of suppressed sales. Its further contention is that if a dealer from whom conversion jobs were taken is found non -existent at the declared place of business several years after the actual conversion job, it (the firm) cannot be faulted for that and cannot be penalised by disbelieving its claim relating to conversion job. The applicant prays for a declaration that Rs. 6,32,665 is the genuine receipt as conversion charges and is not liable to be taxed and that the impugned orders of the respondent Nos. 1, 2 and 3 are illegal.

(3.) THE gross turnover has been enhanced by the C.T.O. by an amount of Rs. 44,28,655 because he disbelieved the story of conversion job done for Steel and Hardware Stores.