Bhooramal Kedar Nath vs Commissioner, Trade Tax

Satish Chandra, J.—Both the revisions u/s 11 of the U.P. Trade Tax Act, 1948, have been preferred against the judgment and order dated November 27, 2003 passed by the Trade Tax Tribunal, Luck-now in Second Appeal Nos. 316 of 1997 and 23 of 2000, for the assessment year 1992-93. The brief facts of the case are that the revisionist is a sole proprietorship firm, which was engaged in the manufacture and sale of bricks. Earlier, the revisionist was availing of the benefit of compounding scheme and orders were passed u/s 7D of the Act but on October 6, 1992 the sole proprietor Sri Radhey Shyam Agarwal died and his legal heir Sri Sunil Kumar Agarwal had taken over the business. On September 21, 1992, June 28, 1992, June 6, 1992 and August 17, 1992, surveys were conducted at the business premises of the assessee. On the spot, no books of accounts were found though Muneem (Accountant) was available. At the time of survey, it was found that firing in the kiln was going on and stock was available. After rejecting the books of accounts, the assessing officer has estimated the turnover on estimate basis for Rs. 23,40,000 and levied the tax of Rs. 2,34,000 vide order dated March 30, 1996.

However, in first appeal, the first appellate authority vide his order dated May 26, 1997 again estimated the same and reduced the turnover to Rs. 4,48,800 and levied the tax of Rs. 44,880. Being aggrieved, the assessee has filed Second Appeal No. 23 of 2000; and at the same time, the Department has also filed Cross Appeal No. 316 of 1997 before the Tribunal, who by common judgment, dismissed the appeal filed by the assessee, against which present Trade Tax Revision No. 231 of 2004 has been filed by the assessee. In the Departmental Appeal No. 316 of 1997, the Tribunal has enhanced the addition for Rs. 39,225. Being aggrieved, the assessee has filed the present Trade Tax Revision No. 330 of 2004.

With this backdrop, Sri M.M. Dewan, learned counsel for the revisionist, submits that the assessing officer has wrongly determined the production of one lakh bricks in six days but the production of brick kiln depends on various factors such as location, nature of the soil, extent of moisture in soil, the weather conditions, etc. For this purpose, he has relied on the ratio laid down in the cases of Jai Hind Brick Works v. Commissioner of Sales Tax [1988] UPTC 520 and Awadhesh Narain Singh v. Commissioner of Sales Tax [1988] UPTC 68.

The learned counsel further submits that firing period of 86 days is not based on survey, it is purely a gas work, which cannot be sustained as per the ratio laid down by this honourable court in the cases of Chawla Brick Field v. Commissioner of Sales Tax [1987] UPTC 1377 and Om Prakash Vishnoi v. Commissioner of Sales Tax [1981] UPTC 35. Lastly, he submits that the selling rates was also taken in'' an arbitrary manner. So, the addition may kindly be set aside.

On the other hand, learned standing counsel justified the impugned order passed by the lower authorities. He mentioned that at the time of survey, no books of accounts were found.

After hearing both the parties, it appears that after the death of sole proprietor, his son has availed of the benefit of compounding scheme, where he has shown stock of finished bricks at 30,00,000 and 15,000 raw bricks. But the assessing officer in the absence of the books of accounts enhanced the closing stock for finished and raw bricks. The assessing officer has also estimated the consumption of coal, and burning period by rejecting the books of accounts. The assessing officer has made the addition on estimate basis, which was reduced by the first appellate authority on estimate basis by giving the reasoning in his order. But the Tribunal has enhanced the addition to Rs. 39,225 in the departmental appeal again by estimating the sale but without any reason. Needless to mention that both the lower authorities have given the reasoning for making/reducing the addition on estimate basis but the Tribunal has just repeated the order of the assessing officer and enhanced the addition pertaining to the sale rate of the bricks in the absence of any material, which is not sustainable in the eye of law. The Tribunal has not given any independent finding/reasoning for enhancing the addition where the first appellate authority has given reasoning to reduce the addition. In these circumstances, the order passed by the Tribunal is not sustainable. So, the impugned order passed by the Tribunal is set aside and the order of the first appellate authority is hereby sustained in both the revisions along with the reasons mentioned therein. Thus, the Trade Tax Revision No. 231 of 2004 is dismissed and the Trade Tax Revision No. 230 of 2004 is allowed. In the result, the assessee will get the relief of Rs. 39,225 (rupees thirty nine thousand two hundred twenty five only), as discussed above. No cost.