Dismissed

M/S Ganga Brick Works Thru Partner Ganga Prasad Tewari v. the Commissioner of Trade Tax U.P. Lucknow

Allahabad HC16 Nov 2018STRE/928/2007

Case brief

AI extract

What is this about?

Revision against Trade Tax Tribunal dismissing appeal rejecting closing stock claims. Court dismissed revision because applicant failed to challenge specific finding that they did not disclose opening stock in their Section 7-D compounding application.

What did the court decide?

Revision dismissed with no order as to costs.

What the court decided

M/S Ganga Brick Works Thru Partner Ganga Prasad Tewari… — Property and Title | Allahabad HC (2018)

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Court No. - 7

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Case :- SALES/TRADE TAX REVISION No. - 928 of 2007

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Applicant :- M/S Ganga Brick Works Thru' Partner Ganga Prasad Tewari Opposite Party :- The Commissioner Of Trade Tax U.P. Lucknow Counsel for Applicant :- Piyush Agrawal Counsel for Opposite Party :- S.C.

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Hon'ble Saumitra Dayal Singh,J.

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Heard learned counsel for the assessee and learned Standing Counsel for the State.

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The present revision has been filed raising the following questions of law;

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(i) Whether while applying for compounding application from 01.10.2002 the applicant has disclosed the stock as per accounts i.e. Abhilekhanusar and the summary of stock was also submitted wherein the stock of brick comes to 7,30,000 the authorities were justified in drawing an adverse inference against the applicant?

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(ii) Whether the authorities were justified in drawing an adverse inference that the applicant has sold 7,30,000 bricks without any rhyme or reason?

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(iii) Whether the selling rate fixed by the Trade Tax Tribunal at Rs. 1200/- against the disclosed selling of Rs. 1,000/- is justified?

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(iv) Whether selling rate of bricks fixed by the Trade Tax Tribunal without assigning any reason is justified?

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(v) Whether in any view of the matter, the order passed by the Trade Tax Tribunal is justified?

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The present revision relates to the A.Y. 2002-03 for the period 01.04.2002 to 30.09.2002. The assessee was engaged in running a brick-kiln. While making the assessment for the A.Y. 2002-03 the assessing officer rejected the books of accounts of the assessee specifically with respect to closing stock of 7,30,200 bricks disclosed by the assessee as on 30.09.2002. In this regard the assessing officer had reasoned that production of bricks having arisen on 20.08.2002, it is difficult to believe that no part of such bricks would have been sold during the period

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up to 30.09.2002. In support of such reason, the assessing officer further relied on the disclosure made by the assessee in its application seeking compounding under Section 7-D of the U.P. Trade Tax Act, 1948 (hereinafter referred to as 'the Act') for the period 01.10.2002 to 31.03.2003. Since the assessee did not disclose any opening stock in that application for compounding filed by the assessee, the assessing officer found that the assessee did not have any closing stock. Specific finding in that regard was recorded in the assessment order dated 16.03.2005.

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Against the aforesaid order, the assessee filed an appeal before the first appellate authority, who rejected the same by the order dated 11.05.2006. That appellate authority had also offered similar reasoning in that order. In the further appeal filed by the assessee before the Tribunal, no specific ground appears to have been taken to the effect that any closing stock figure had been disclosed by the assessee. In any case, only ground appears to have been taken that rejection of the closing stock of 7,30,000 bricks is erroneous. The Tribunal has also rejected the appeal by the impugned order.

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Learned counsel for the assessee submits that in the application for compounding filed by the assessee, in the relevant column pertaining to opening stock as on 01.10.2002, the word "Abhilekhanusar" had been written by hand. It has then been submitted that the assessee never admitted the finding recorded by the appellate authority that are perverse and once the assessee had disclosed the opening stock figure as per his books of accounts, it could never be said that there was no closing stock as on 30.09.2002.

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Sri B.K.Pandey, learned Standing Counsel on the other hand submits that at the very first stage of the assessment, the claim made by the assessee had been rejected and the same does not appear to have been seriously disputed either before the first appellate authority or before second appellate authority. Inasmuch as from a plain reading of the order passed by both the authorities, it is clear that the assessee never submitted as the fact that it had disclosed any particular figure by way of closing stock as on 30.09.2002 in its application made for compounding under Section 7-D of the Act.

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As to the word "Abhilekhanusar" appearing in the application for compounding, it had been submitted that it is doubtful if such disclosure had been made. Inasmuch as the word "Abhilekhanusar" had been mentioned in the column with respect to stock, at the same time it is also borne out from a plain reading of that column entries that the same had already been scored out by the assessee. It is therefore, submitted that

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the word "Abhilekhanusar" has been added by interpolation. That apart, it is submitted that once the assessee was obliged to disclose the stock figures, even if the word "Abhilekhanusar" had been mentioned at the relevant time, it would not amount to existence of opening stock of 7,30,200 bricks as on 01.10.2002.

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Having considered the argument so advanced by learned counsel for the parties, it appears that in the first place the assessee did not challenge the finding recorded by the assessing officer that it had not disclosed any opening stock in its application filed under Section 7-D of the Act for the period 01.10.2002 to 31.03.2003. The finding recorded by the assessing officer as also by the first appellate authority being specific, it was for the assessee to challenge that finding by pleading before the authority that it had actually disclosed any opening stock in its application under Section 7-D of the Act. No such ground having been taken, the assessee cannot be permitted to raise such issue in the revision arising from the order of the Tribunal.

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Even otherwise by merely writing "Abhilekhanusar" the assessee did not discharge the burden placed on it which to disclose its stock position. The disclosure had to be specific with respect to the entries in the column, which were for ready bricks "Pakki Eente etc." Also, the fact that such column had also been scored out creates doubt.

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Accordingly, it appears, the findings recorded by the Tribunal are finding of facts reached on the basis of evidence available on record. The present revision lacks merit and is accordingly dismissed . No order as to costs.

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Order Date :- 16.11.2018 Lbm/-

M/S Ganga Brick Works Thru Partner Ganga Prasad Tewari v. the Commissioner of Trade Tax U.P. Lucknow

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M/S Ganga Brick Works Thru Partner Ganga Prasad Tewari v. the Commissioner of Trade Tax U.P. Lucknow

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