Dismissed

M/S Jai Mata Ji Enterprises and Transport Co. v. Commissioner of Commercial Tax

Allahabad HC12 Nov 2018STRE/269/2018

Case brief

AI extract

What is this about?

This is Sales/Trade Tax Revision No. 269 of 2018. The Single Judge dismissed the revision filed by the applicant-dealer against the rejection of books of accounts and the enhancement of selling price based on best judgment assessment due to non-disclosure of freight charges.

What did the court decide?

The present revision is dismissed with no order as to costs.

M/S Jai Mata Ji Enterprises and Transport Co. Vs… — Property and Title | Allahabad HC (2018)

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Court No. - 7

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Case :- SALES/TRADE TAX REVISION No. - 269 of 2018

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Applicant :- M/S Jai Mata Ji Enterprises And Transport Co. Opposite Party :- Commissioner Of Commercial Tax Counsel for Applicant :- Anand Kumar Upadhyay,Punit Kumar Upadhyay

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Counsel for Opposite Party :- C.S.C.

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Hon'ble Saumitra Dayal Singh,J.

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Heard Sri Punit Kumar Upadhyay, learned counsel for the applicant-assessee and Sri B.K. Pandey, learned Standing Counsel for the State.

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The present revision has been filed by the assessee. The following question of law has been pressed by the learned counsel for the assessee:

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"Whether, the learned Tribunal and the authorities below were justified in rejecting the books of accounts of the revisionist without any material and evidence on record while enhancing the selling price by their own notion?"

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Admittedly, the assessee is a dealer in sand. For the A.Y. 2013-14, it had disclosed inter-state purchase of sand made from the State of Bihar. These purchases were admittedly made against the Form nos-XXXVIII issued under the U.P. Vat Act, 2008 (hereinafter referred to as the Act). The assessee had disclosed the purchase price of Rs. 7.70/- per cubic foot and selling price of Rs. 8.00/- per cubic foot. After issuing the show cause notice in that regard, the Assessing Authority did not believe that the transportation expenses had been included in the sale turnover of the assessee and, therefore, rejected the books of accounts of the assessment and made an addition on best judgment assessment basis. He estimated the selling price at Rs. 15.50/- per cubic foot. Upon first appeal, the First Appellate Authority fixed the same at Rs. 13.00/- per cubic foot, and in further appeal, the Tribunal reduced the same to Rs. 10.50/- per cubic foot. However, the rejection of books of accounts had been maintained by all the authorities.

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Learned counsel for the applicant-assessee submits that there was no material or occasion to reject the books of accounts of the assessee inasmuch the assessee had engaged in transit sale of the goods at the total price disclosed by him. Therefore, there was no occasion to add the transport cost to the turnover of the assessee. Alternatively, it has been submitted that in any case,

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the assessee had sold the quantities of sand on a total price basis and, therefore, there was no occasion to add any amount towards transportation expenses. In this regard, reference has been made to a reply submitted by the assessee before the Assessing Authority during the course of the assessment proceedings.

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Elaborating his submissions, learned counsel for the applicant-assessee would submit that the First Appellate Authority and the Tribunal have completely erred in relying on the estimation made in the case of another assessee namely M/s K.G. Enterprises, Rampur, Ram Nagar, Varanasi. In this regard, he has placed reliance on the earlier decision of this Court in the case of Suhasariya Products Vs. Commissioner, Trade Tax, U.P., Lucknow, (2014) 24 VLJ 65 .

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Elaborating his submissions further, learned counsel for the applicant-assessee submits that if at all, the earlier decision made in the case of another assessee were to be relied upon against the present applicant-assessee, the burden was squarely on the revenue to establish the similarity in the facts of the two cases. In this regard, reliance has been placed on another earlier decision of this Court in the case of The Commissioner, Sales Tax, U.P. Vs. Om Prakash Agrawal, Aligarh, 2004 NTN (Vol. 24) 290.

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Sri B.K. Pandey, learned Standing Counsel on the other hand submits that in the first place, there is no evidence led by the assessee of having made any sale in transit. Such sales, by virtue of the statutory provisions are required to be covered by the Form-E1/E2. The assessee never led any evidence by way of submission of any Form-E1/E2. Therefore, the claim on transit sale is merely an after thought based on no evidence whatsoever. Therefore, the claim made by the assessee in the present revision, must necessarily be rejected.

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Second, it has been submitted that even if it were to be assumed that the assessee had made sale of all quantities of sand without charging any amount towards freight, it was for the assessee to have led evidence in the shape of contract documents or other credible evidence to establish either that the purchase price was inclusive of freight, or that he had not discharged the freight liability and passed on that indeterminate liability to the seller. No evidence having been led, the rejection of books of accounts cannot be questioned.

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On the question of estimation, learned Standing Counsel would submit that in such matters, some guess work is always involved and insofar as the Tribunal has granted substantial

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relief to the assessee by reducing the enhancement from Rs. 7.50/- per cubic foot to Rs. 2.50/- per cubic foot, no perversity exists or arises on such estimation, specially, when the Tribunal itself had taken note of similar assessments of other assessees.

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Having considered the arguments so advanced by the learned counsel for the parties, in the first place, there does not appear to exist any perversity on part of the authorities in rejecting the books of accounts of the assessee inasmuch as first it was for the assessee to lead evidence and establish the acceptance of his books of accounts. Admittedly, the assessee, being the trader in sand, it was for him to have recorded the expenses incurred in such business and to have proven the same when questioned. In such matter, there cannot exist any presumption or assumption that an expense which is normal and natural would not have been incurred by the assessee. Once, it was admitted to the assessee that he had purchased large quantities of sand being 8,82,200 cubic foot from Bihar, it was for him to have then led specific evidence to establish that the purchase price was all inclusive, and no amount was paid towards freight separately.

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Merely saying that the assessee had not paid any freight amount, may not discharge such burden. Neither any contract document nor any affidavit or other evidence of the selling dealer of Bihar was led by the assessee to establish such fact nor any further evidence was led that the assessee did not discharge such liability. Though a person may not be burdened to establish a negative fact, yet in the facts of the present case, since the dispute arises from a pure commercial transaction and the claim made by the assessee being in the nature of the exception to the normal rule/practice with respect to the payment of freight charges, the onus was on the assessee to lead some positive evidence to establish existence of such exception (that no freight was payable by him). It was not discharged. Therefore, the rejection of books of accounts cannot be faulted.

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Insofar as the estimation has been made by the authorities as sustained by the Tribunal, it is seen that the enhancement has not been made on the basis of another assessee. In fact, enhancement has been made occasioned by the detection of the non-disclosure of freight charges. That having been done first, the order passed in the case of another dealer namely M/s K.G. Enterprises, Rampur, Ram Nagar, Varanasi was relied only by way of exemplar cited by the authorities for making the estimation and not to reject the book results. Being a matter of guess work, it is rather desirable that the authorities admit a uniform criteria while making similar enhancement in the cases of different assessees, over the same period.

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The decision cited by the learned counsel for the applicantassessee in the case of Suhasariya Products Vs. Commissioner, Trade Tax, U.P., Lucknow (supra) is therefore inapposite inasmuch as in that case, rejection of books of accounts had been made solely on account of higher turnover having been accepted in another case. Such are not the facts in the present case. Here, rejection of books of accounts has been occasioned due to detection of non-disclosure of freight charges. Similarly, The Commissioner, Sales Tax, U.P. Vs. Om Prakash Agrawal, Aligarh (supra) is inapplicable to the facts of the present case since rejection of books of accounts of the present assessee arises from facts found in his case and not any other. Again, exact similarity was never required to be established by the authorities while making estimation.

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Once it had been found that freight charges had not been disclosed, a certain guess work was necessarily involved to make an addition on that count. Since, the assessee had failed to lead any evidence, the appeal authorities have rightly referred to an order passed in the case of other assessee in same trade to make an estimate. A proportionate enhancement has been made in the case of the assessee.

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The present revision is concluded by findings of fact which do not warrant interference by this Court.

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The present revision lacks merit and is, accordingly, dismissed . No order as to costs.

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Order Date :- 12.11.2018 Prakhar

M/S Jai Mata Ji Enterprises and Transport Co. v. Commissioner of Commercial Tax

Case brief

What is this about?

What did the court decide?

M/S Jai Mata Ji Enterprises and Transport Co. v. Commissioner of Commercial Tax

Case brief

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What did the court decide?

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