G.S. Builders and Associates vs Commissioner, Trade Tax

Rajes Kumar, J.—Present revision u/s 11 of U.P. Trade Tax Act (hereinafter referred 10 as ''Act'' ) is directed against the order of Tribunal dated 22.01.2005 for the assessment year 2000-01 under U.P. Trade Tax Act

Applicant is a civil contractor. Applicant claimed that it had been awarded contract by issuing work order/letter dated 21.06.2000, which was effective from 01.04.2000, by M/s Orient Ceramics and Industries Limited, Industrial Area. Sikandarabad for the execution of the work of civil nature mentioned in Annexure-A of the work order. Applicant had executed the works as per the work order during the year under consideration and received the payment at Rs. 2,63,61,632.12p, Applicant applied under the compounding scheme introduced by the State Government vide G.O. No. Vidhi-1(3)Civil Sakarm Sanvida (2000-2001)-761/Trade Tax, Lucknow dated 10.08.2000 for the assessment year 2000-01 u/s 7-D of the Act. Under Clause (3) of the aforesaid Government Order compounding was admissible only to the extent of 5% of the goods imported from outside the State of U.P. and balance was subject to regular assessment. State Government has also issued another Government Order No. Vidhi 1(3)Civil Sakarm Sanvida (2000-2001)-848/Trade Tax, Lucknow dated 24.08 2000 in which it has been stated that in case where the contractor had furnished the tender keeping in view the compounding scheme for the assessment year 1999-2000 and had worked according to that tender in subsequent year or the work would have been done alter the acceptance of the tender then in those cases compounding scheme as prevalent for the year 1999-2000 would be applicable. It may be mentioned here that in the compounding scheme for the assessment year 1999-2000 there was no condition like Clause (3) and the compounding was applicable on the entire quantity of the material imported and there was no restriction of 5%.

Before the assessing authority when the application u/s 7-D of the Act was under consideration the applicant submitted that compounding scheme for the assessment year 1999-2000 would be made applicable, inasmuch as the work order dated 21.06.2000 effective from 1.04.2000 was issued keeping in view the compounding scheme for the assessment year 1999-2000. Assessing authority held that the applicant had not furnished any evidence or certificate by which the benefit of the circular dated 24.08.2000 would be given. However, assessing authority had observed that the work order was given on 21.10.2000 hence the benefit in respect of the payment received prior to 10.08.2000 should be given. Assessing authority observed that prior to 10.08.2000 payment received was Rs. 34,87,896.14p. and the balance payment of Rs. 1.85 crore was received after 21.08.2000 accordingly, observed that the maximum payment was made after 21.08.2000. Assessing authority further observed that the applicant had not provided any details of the goods imported prior to 10.08.2000 and subsequent to 10.08.2000 and therefore, by way of best judgment assessment, goods imported prior to 10.08.2000 had been estimated, Being aggrieved by the order, applicant filed appeal before the Joint commissioner (Appeals), who vide order dated 11.06.2003 allowed the appeal and held that on the entire work compounding scheme for the year 1999-2000 would be applicable. According to the first appellate authority since the order had been obtained prior to 40.08.2000, therefore, for the entire work order, compounding scheme for the assessment year 1999-2000 would be applicable. Commissioner of Trade Tax filed appeal before the Tribunal. Tribunal by the impugned order allowed the appeal and remanded back the matter to the assessing authority. Tribunal held that compounding has been claimed and accepted on the basis of the rate contract letter dated 21.06.2000, which can not be said to be the contract Tribunal has referred a letter dated 17.08.2000 written by M/s Orient Ceramics and Industries Limited, Industrial Area, Sikandarabad and on the basis of the said letter it has been inferred that the applicant had entered into a different civil contract for a different period and time to time work order have been issued. It has also been observed that merely because the work contract has been executed initially, the claim of the applicant can not be accepted and the first appellate authority has erred in allowing the claim Tribunal however, remanded back the matter to the assessing authority to consider the matter afresh.

Heard learned Counsel for the parties.

Learned Counsel for the applicant submitted that the Tribunal has erred in remanding back the case to the assessing authority. He submitted that the letter dated 21.06.2000 issued by M/s Orient Ceramics and Industries Limited, Industrial Area, Sikandarabad was a work order by which rate offered by the applicant in respect of the various works mentioned in annexure-A was approved. He submitted that apart from this letter, no other documents had been executed and only on the basis of the aforesaid work order, the work had been executed during the year under consideration and the payments had been received. He submitted that when the tender was furnished the compounding scheme for the assessment year 1999-2000 was prevalent and applicant had expected that in the compounding scheme the condition mentioned in Clause (3) would be imposed. He submitted that in view of the circular dated 24.08.2000 compounding scheme for the year 1999-2000 would be applicable and the first appellate . authority has rightly held so.

Learned Standing Counsel submitted that the assessing authority " has categorically held that the applicant had not furnished any evidence and certificate by which the benefit of the G.O. dated 24.08.2000 would be provided. He submitted that assessing authority, after holding so without any basis proceeded to allow the benefit in part. He submitted that the applicant had applied for the compounding scheme under G.O. dated 10.08.2000 knowing about Clause (3) and therefore, in the absence of any material that the tender was furnished keeping in view the compounding scheme for the assessment year 1999-2000, the compounding scheme for the assessment year 2000-01 as per the G.O. dated 10.08.2000 would be applicable in entirety and the benefit of G.O. dated 24.08.2000 can not be given.

Having heard learned Counsel for the parties, I have perused the order of Tribunal and the authorities below.

It is useful to refer Clause (3) of the G. O. dated 10.08.2000 and Clause (2) of the G.O, dated 24.08.2000.

Clause (3) of G.O. dated 10.08.2000 reads as follows:

Lek/kku jkf�k dh nj �ij fcUnq �2� ds vuqlkj vkadfyr dqy jkf�k ij 1 izfr�kr dh nj ls fu/kkZfjr dh tk;sxhA ;fn fdlh lafonkdkj }kjk lEcfU/kr Bsds dh dqy /kujkf�k dh 5 izfr�kr ls vf/kd eky izkar ckgj ls vk;kr fd;k tkrk gSA rks mrus eky ij lek/kku ;kstuk dk ykHk vuqeU; ugha gksxk vkSj fu;ekuqlkj dj fu/kkZj.k vkfn dh dk;Zokgh dh tk;sxhA

Clause (2) of G.O. dated 24.08.2000 reads as follows:

Lkacaf/kr Bsdsnkjksa }kjk o"kZ 1999&2000 rd ykxw lek/kku ;kstuk dks /;ku esa j[kdj tks Vs.Mj Hkjs x;sa gS vkSj mlh ds vuqlkj muds }kjk vxys o"kksZa esa dk;Z fd;k tk jgk gS vFkok Vs.Mj Lohd`r gksus ij fd;k tk;sxk bl izdkj ds ekeyksa esa rFkk ,slh lafonkvksa ds laca/k esa o"kZ 1999&2000 esa izpfyr lek/kku ;kstuk dk ykHk fn;k tk ldrk gSA

For the applicability of the Clause (2) of the G.O. dated 24.08.2000 applicant had to explain that the tender was furnished keeping in view the compounding scheme for the assessment year 1999-2000, Assessing authority recorded the finding that no evidence has been adduced in this regard. Despite the query being made by this Court, learned Counsel for the applicant has also not been able to show that the offer was made keeping in view the compounding scheme for the assessment year 1999-2000. The work order dated 21.06.2000 also does not reveal that the offer was accepted keeping in view the compounding scheme for the assessment year 1999-2000. Applicant had applied under the compounding scheme for the assessment year 2000-01 under the G.O. dated 10.08.2000 knowing that there was Clause (3), which provided that the benefit of imported goods would be . allowed only to the extent of 5% of the total amount of contract and the balance imported goods would be subject to tax in regular assessment. Merely because work order was dated 21.06.2000, prior the date of the G.O. dated 10.08.2000, it can not be presumed that the tender was furnished keeping in view the compounding scheme for the assessment year 1999-2000. It is on the applicant to furnish the necessary evidence and to prove its case to get the benefit of Clause (2) of the G.O. dated 24.08.2000. Thus, in my view, the exercise made by the assessing authority allowing the partial benefit for the period prior to 10.08.2000 is not justified. In my view, Tribunal is also not justified in saying that the rate contract or the work order can not be considered as agreement. A work order asking the contractor to work at a specific rate after accepting the offer, also amounts to the agreement and the compounding scheme can be availed on the basis of the said work order, in the absence of any contrary material. Thus for the reasons stated above, in my view matter requires reconsideration by the assessing authority in the light of the observations made above. The assessing authority may allow full opportunity to the applicant to adduce evidence and to make out its case within the ambit of Clause (2) of Government Order dated 24.08.2000.

In the result, revision is allowed in part. Order of the Tribunal is modified to the extent stated above.